A REVIEW OF MICHIGAN'S UNDERGROUND STORAGE

SPE MWGS SPRING WORKSHOP 4 MARCH 2015

Timothy J. Brock, PE Brock Engineering, LLC PRESENTATION OVERVIEW

• Why does Michigan need underground storage? • Where are the storage facilities? • What is stored and how much? • How is it stored? • What are the formations that are used? • How is the working gas distributed by formation? • What is the percentage of base gas to total storage? • How many wells are involved? • How does the base gas requirement differ between zones? • How much area do the fields require/BCF? • How old are the facilities?

NOTE: ALL INFORMATION IN THIS PRESENTATION HAS BEEN OBTAINED FROM PUBLIC SOURCES – USEIA, MDEQ AND MPSC

2 MICHIGAN ENERGY CONSUMPTION BY TYPE

3 MICHIGAN CONSUMPTION AND PRODUCTION, 2001-2013*

1,000,000

900,000

800,000

700,000

600,000

500,000 Gas Consumption Gas Production 400,000

300,000 Annual Gas Volumes, MMCF Gas Annual

200,000

100,000

0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

* Per USEIA 4 MICHIGAN’S UNDERGROUND HYDROCARBON STORAGE LOCATIONS

5 MICHIGAN STRATIGRAPHIC COLUMN SHOWING STORAGE FORMATIONS*

Stray Sandstone

Reed City

Salina Salts, Carbonates, Niagaran and Reef

Trenton

* Michigan DEQ Office of Oil, Gas and Minerals 6 WHAT IS STORED UNDERGROUND IN MICHIGAN?

• Natural Gas • Natural Gas Liquids • • i-Butane • n-Butane • Mixed Butanes • Mixed NGL’s

7 HOW MUCH IS STORED?

• Natural Gas* • Working Gas: 688 BCF • Base Gas: 447 BCF • Total Storage Gas: 1,135 BCF • NGL** • Total Cavern Capacity: 537 MMGAL • Number of Facilities: 5 • Number of Caverns: 40

* Per Michigan Public Service Commission ** Per Michigan DEQ Office of Oil, Gas and Minerals, not necessarily storage volume

8 HOW IS IT STORED?

• Natural gas • Depleted reservoirs – former producing reservoirs that have been converted to storage • Salt caverns – former solution mining operations for salt production and dedicated caverns constructed for gas storage • NGL’s • Salt Caverns – former solution mining operations for salt production and dedicated caverns constructed for NGL storage

9 WHAT FORMATIONS ARE USED?

• Natural Gas • Michigan Stray Sandstone (Mississippian), 14 Fields, 11 Active • Reed City Dolomite (Devonian), 1 Active Field • Salina Salts (Silurian), 2 Active Facilities, 9 Caverns • Salina Carbonates (Silurian), 2 Active Fields • Regional Niagaran (Silurian), 2 Fields, 1 Active • Niagaran Reefs (Silurian), 39 Fields, 38 Active • Trenton (Ordovician), 1 Inactive Field • NGL’s • Salina Salts (Silurian), 5 Active Facilities, 40 ActiveCaverns

10 WORKING GAS BY FORMATION, BCF*

2.17 9 30.9 33 22

146.9 A-1 Carbonate B Salt Michigan Stray Niagaran Reef Reed City Regional Niagaran Trenton

466.5

* Per Michigan Public Service Commission 11 NUMBER OF WELLS INVOLVED*

Active I/W Plugged I/W Active OBS Plugged OBS Gas Storage 2322 708 465 152 NGL Storage401800

* Per Michigan DEQ Office of Oil, Gas and Minerals

12 BASE GAS % OF TOTAL GAS STORAGE CAPACITY*

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0% Base GasPercent of Total Storage

* Per Michigan Public Service Commission 13 GAS STORAGE ACRES/BCF WORKING GAS*

10000

1000

100

10 Acres/BCF of Working Gas

1 A1 B Salt Michigan Michigan Niagaran Niagaran Reed City Regional Regional Trenton - Carbonate Stray - Stray - Reef Reef - Prop Niagaran Niagaran - Abdn Active Abdn Abdn

* Per Michigan Public Service Commission 14 STORAGE RESERVOIRS AVERAGE AGE, YEARS

70

60

50

40

30

20 Average Age in Years in Age Average 10

0

* Per Michigan Public Service Commission 15 FUTURE DEVELOPMENT

• Most likely additional natural gas storage will occur in depleted Niagaran Reefs • High deliverability • Lower base gas requirement • Less areal extent required • Large number of potential targets • Most likely additional NGL storage will occur in and around existing facilities, due to infrastructure.

16 QUESTIONS?

• Thank you for the opportunity to share this information today.

• Brock Engineering, LLC is a professional engineering consulting company. Our mission is to provide top quality engineering solutions to our clients’ needs in a timely and in a cost effective manner.

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