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Governor: NatGas Can Drive Michigan Economy

Natural gas figures prominently in Michigan Gov. Rick Snyder's 19-page energy and environment message to Michiganders and their lawmakers, which was released last week. It includes many ideas for natural gas, oil, power generation and energy efficiency, but before much can happen, guidance from the federal government is needed, he said.

In the document, Snyder said Michigan's leadership in energy is not talked about enough. For instance, Michigan utility "MichCon literally invented the natural gas storage industry, and our state remains the indisputable national leader," he said. "That's a key advantage that Michigan needs to promote and grow.

"Michigan produces natural gas. It has a lot of places where natural gas can be stored. And it has pipelines built to help move that natural gas. That's a great advantage and an opportunity for the state of Michigan to do a little of its own economic gardening."

Snyder has asked the Michigan Department of Natural Resources and the Public Service Commission to collaborate on investigations with the private sector on developing a "strategic natural gas reserve" for the state.

"It's a simple concept; the state of Michigan owns many natural gas deposits. When a private company brings those into production, the state can either take its share in money or in natural gas. Until now, we have chosen to take the money. But if the state owns gas, and the state owns storage, it could make sense for us to store that gas and sell it later, when we could get a better price. We will look for private companies to partner with us in developing storage.

"By waiting to sell that gas on the private market to a Michigan company, we could create good news for both ratepayers and taxpayers since long-term contracts can help keep winter heating prices down while ensuring Michigan gets a better return on its resources."

The governor also enthused about enhanced oil recovery through carbon dioxide injection. "For years, experts thought some of our old oil wells had reached the end of their lives, unable to produce any more. But it turns out that if you can get enough pure carbon dioxide into those wells, these wells can be productive again, and the carbon dioxide stays below the ground," he said. "A multi-generational family company in Michigan has successfully brought this new, exciting technology to our state.

"We need to do more to make sure this industry, which is a great example of economic gardening, can grow in Michigan. To do that, I am asking the Legislature to enact a law that will grant carbon dioxide pipelines the same legal standing as other pipelines in Michigan to make sure our state laws are ready for this new industry."

On the power transmission front, Snyder praised the infrastructure in the Lower Peninsula and called for development in the Upper Peninsula. "There, we have nearly 12 'yellow alerts' a year -- meaning that all it takes is for one more thing to go wrong and everybody's power could be out for days."

Snyder alluded to Obama administration support for natural gas development and said the president and his administration need to follow through. "We need timelines that will let us look seriously at transitioning existing plants to this fuel, a commitment to pipeline infrastructure and a stable, environmentally protective set of regulations that allow companies to create a business plan built around new natural gas supplies," he said. "Michigan has done what it can in leading the way on this issue...

"Until we see more of what the nation's energy policy will be, and what the effects are on Michigan, it would be a mistake to again change our energy framework...This coming year, I will invite the Legislature and Michigan citizens to tell me what information we will need to fairly evaluate our energy policies...Then, by 2015, we will all be able to implement new decisions about our energy framework that will enhance Michigan's adaptability, reliability, affordability and environment.

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