Natural gas. A better energy future for Michigan. Michigan Oil & Gas Producers Education Foundation 1

Overview  Why natural gas  Job and economic impact for Michigan  Hydraulic fracturing  Discussion 2

Why Natural Gas? Abundant, Clean and Affordable Michigan’s Own Jobs and Economic Recovery Electricity Generation Jobs and Economic Recovery 3

How We Use Natural Gas 4 Did you know…80% of Michigan homeowners use natural gas to heat their homes

Michigan Jobs $2.6 BILLION Total Labor Income $2.6 BILLION Total Labor Income $5.7 BILLION Value-Added Economic Output $5.7 BILLION Value-Added Economic Output 5 Natural Gas and Oil Production Employment in Michigan Source: MOGA, ANGA, API

Energizing Michigan’s economy  $100 million+ in 2012 in state royalty, fee, and tax revenues  More than $150 million in income to 8,000 private Michigan landowners annually  $1.25 billion to state lands, parks, outdoor recreation since1927  $1.8 billion annual MI labor impact  $3 billion overall to Michigan’s economy 6 Source: MOGA, API (Pricewaterhousecoopers, 2011)

Hydraulic fracturing What it is. What it is not. 7

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Michigan’s approach  Proven  Nearly 60 years of experience  12,000 wells in Michigan  Safe  Water resources protected  No incidences of harm  Regulated  State and federal compliance  Role model 9

What is shale gas?  Locked in deep, dense rock formations called shale  Vital to our energy needs, self reliance, maintaining affordability  Marcellus, Antrim, Collingwood, Utica, Bakken 10

11 Main area of shale gas production

Typical Vertical Well 12

Fracturing at Work 13

Groundwater Protection 14

Horizontal Drilling: A Better Way for Deep Shale Gas Development  Smaller surface impact  Fewer wells, more clean energy  Less waste  Fewer air emissions  Necessary to produce the energy we need, affordably, responsibly, safely 15

Typical Horizontal Well 16

Water Use Michigan vertical well: approx. 50,000 gallons  Restaurant aquarium Michigan horizontal well: up to 5 million gallons  Irrigating 8 acres of corn in season 17

Industry and Regulatory Oversight  MI DEQ Supervisor or Wells Instruction  US EPA  Model Regulatory Framework  Groundwater Protection Council  Interstate Oil and Gas Compact Commission 18

Michigan Disclosure Requirements  Regular and ongoing monitoring, reporting  Disclosure and record-keeping on larger-volume hydraulic fracturing activities  DEQ website, frack job site, local emergency responders  Includes chemicals  Michigan DEQ on site for well construction, fracturing, waste fluid disposal For national regulations, visit 19

Thank you!