While much of the nation and the majority of Michigan's residents
suffered through the Great Depression of the 1930s, areas of oil and gas
production faired considerably better. Automobiles still consumed great
quantities of gasoline while many homes still need kerosene for
lighting. Oil still made money, and many Michiganians enjoyed the
benefits of an actively growing oilpatch. During the Depression years,
oil and natural gas were discovered in twenty-three of Michigan's Lower
Michigan produced approximately 160,384,000 barrels of crude
oil between 1929 and1941. With an average wellhead price of $1.04 per
barrel this oil pumped $166,592,000 into the Michigan economy.
Additionally, natural gas production in Michigan amounted to about 80.67
billion cubic feet at an average price of about a nickel per thousand
cubic feet (Mcf) to put another $4,306,990 into the Michigan economy.
All told, the wellhead value of Michigan oil and natural gas during the
Depression years reached about $170,898,990, or $2.274 billion in 2005
dollars. The cumulative effect of payroll, income, and property taxes
for not only the oil and gas exploration and production industry but
also oilfield supplies and service companies partially compensated for
the staggering economic losses created by the collapse in automobile
Production in the 1930s
In the 1920s Michigan demonstrated that it had substantial
reservoirs of oil and could become an oil producing state. With 65 oil
and natural gas field discoveries between 1930 and 1939 Michigan began
to realize that possibility. Norman X. Lyon, longtime editor of the Michigan Oil & Gas News
magazine rightly called the decade, "the fabulous 1930s." Little wonder
the decade was described as "fabulous" when the three most important
discoveries are recalled.
The Porter Field, 1933
The Porter Field southeast of the Mt. Pleasant Field was
discovered in 1933. It would prove to be the largest of the decade's
discoveries. As early as 1931 wells were being drilled in Midland
County's Porter Township. With only modest initial results and several
dry holes, prospects of a major find seemed dim. However in 1933 the
Otway 2 well came in as a huge gusher. Rated at 3,200 barrels a day,
suddenly everyone wanted to drill in Porter Township. The field was
dominated by Pure Oil Company (later to become Union Oil Company, now
UNOCAL) but with 55 percent of the acreage held by independents, there
was room for others to get into the action. Over 50 million barrels of
oil have come from the field, the second most productive in the state.
The Porter Field also played an important role in early
experimentation to increase oil flow. Because the porosity of oil
bearing rock can vary, oil sometimes flows very easily out of the stone
while other times the oil flows with great difficulty. Oil producers
have developed a number of techniques to "stimulate" well production by
increasing the porosity of the rock. One way to accomplish this is to
pump acid into a well. This technique is particularly successful when it
is used on limestone or similar rock that is easily dissolved by acid.
On February 11, 1932 the world's first acidizing treatment to stimulate
well production was accomplished on the Pure Oil Fox #1, Chippewa
Township, Isabella County (in the Mt. Pleasant Field) . Legend has it
that the acid was injected with a garden hose borrowed from a worker's
home. Dowell, a major firm involved in oil well stimulation, was born.
The Crystal Field, 1935
Inspired by the 1933-discovered Edmore and Day Fields to the
northwest, in the spring of 1935 J. W. Leonard, Jr. received the permit
to drill the Otto and Goldie Durbin #1 in section 11-10N-5W, Crystal
Township, Montcalm County. The hole was drilled by Leonard Drilling
Company's James Leonard (Walter's older brother.) Pure, Gulf and several
independents reportedly had acreage in the area and supposedly had
whispering interests in the Durbin well site. But everyone seemed to
want someone else to take the risk involved in drilling the first test
Four feet into the Dundee, at 3,197 feet, drilling stopped to
allow tests to be made. Estimates placed the flow at 20 to 30 barrels
of oil per day with some water. Testing went on for about a week, then
the decision was made to drill deeper. Several experienced oilmen
thought the decision was a "waste of time for a well that wasn't going
to amount to much." On the morning of March 28, 1935, they were proved
After drilling a mere six inches deeper the well roared and
cut loose with a seemingly unending gush of oil. Leonard's Durbin #1
well shot the cable tools drilling the well up the nearly 3,200 foot
shaft with such force that it smashed the oil saver and control head.
The gushing well was capped 23 hours later. The well was rated at an
open flow production rate of 3,594 barrels per day. The entire state was
producing 37,000 barrels per day, so the announcement that one well was
producing 3,500 barrel a day brought folks arunnin' and launched one of
Michigan's biggest "booms". Within a week 30 drilling locations were
planned in the area. By June, the Crystal Field production had reached
290,000 barrels of crude oil for the month. In later years saw the
Crystal development expanded to about 2,000 acres and saw 195 active
wells in the Crystal Dundee and Traverse pools. Collectively they would
produce more than 8 million barrels of crude oil.
The Crystal development was of such size that it ultimately
brought new independent refineries to the state and the first oil
pipeline to deliver Michigan production out of state (Sohio-Roosevelts
8-inch pipeline from Mt. Pleasant to Toledo, Ohio). Walter McClanahan's
Midwest Refinery was one of the Crystal-born refineries, which would
eventually be acquired by and merged with J. Walter Leonard, Jr.'s
Leonard Refinery, to become TOTAL Refinery, sold to Diamond Shamrock and
ultimately closed in the late 1990s.
The village of Bloomingdale, in Van Buren County, was
established May 23, 1870 along the Kalamazoo and South Haven Railroad.
It was originally a lumber center. After the trees had been cut it
became an agriculture community. The town's first sixty-eight years were
similar to dozens of small Michigan towns. All of that changed in
August of 1938 when a Michigan independent oil and gas exploration and
production company, Fisher-McCall, came to town to drill on the Wiggins
farm near Bloomingdale.
Allegan County, just to the north of Bloomingdale, was
drawing nationwide headlines in 1938 as drilling proliferated for
Southwestern Michigan's shallow (1,000 to 1,500 feet) Traverse
geological formation oil discoveries. In the midst of all this
publicity, Fisher-McCall received their drilling permit for the Wiggins
Estate #1 well the last week of July, 1938, with little fanfare. The
project, however, soon made banner headlines that dwarfed past newspaper
accounts. In the middle of August, the Michigan Oil & Gas News
announced, in double headlines "BARREL A MINUTE WILDCATS OPEN TWO MORE
TRAVERSE LIME FIELDS" speaking of oil field discoveries near Overisel (
Allegan County) and the Wiggins Bloomingdale discovery.
As had happened at the Crystal Field, the rush was on, but
this time in a small town rather than open land. Leases were signed,
drilling permits were obtained, drilling rig crews and sundry other oil
folk moved in and life in Bloomingdale moved at a much faster pace then
The Bloomingdale field would ultimately see 437 wells
drilled, 45 of them on 80 acres of town lots within the village limits
of Bloomingdale, and would produce more than ten million barrels of oil.
Practically any space not taken up by people and houses saw a drilling
rig put down roots as people signed leases for mineral rights in their
back yard and drillers put rigs as close as possible to each other. More
than 11 percent of all wells ever drilled in Michigan, 5,400 wells out
of a cumulative total of more than 50,000 statewide were drilled in Van
Buren County and neighboring Allegan County between 1930 and 1939.
Development was so rapid and ruthless in this field that both oilfolk
and state regulators agreed on the need for legislation to rationalize
and regularize drilling. The result was the fundamental legislation
enacted in 1939 that still serves as the basis for the regulation of
drilling activity in the state.
As with the Crystal Field, so much oil led to refineries
being built. Two refineries were built at Bloomingdale, the Erie
Refining Company and the Fort-Dalo Oil and Refining Company, both of
which reached throughput levels in the 1,300-1,500 barrel range in their
output peak. The refineries provided hundreds of thousands of gallons
of gasoline per month to Kalamazoo district companies and fuel oil to
distributors during the rationing period of World War II. They closed in
the late 1940s.
Natural Gas in the 1930s
Early in the oil industry finding natural gas was considered
at best a small side benefit to the real job of finding oil and at
worst, something of a nuisance. In the 1930s however, major finds of gas
changed industry attitudes.
The Big Rapids Pioneer newspaper, in a December 30,
1933 editorial headlined "Natural Gas Field Opened in 1933" and opened
with the statement "A meteoritic rise from a position of total obscurity
to the center of attention in Michigan's natural gas development,
reviving visions of industrial advancement long since abandoned with the
passing of the other natural resources (lumber), bids fair to claim the
lions share of attention in Mecosta County story of progress for the
year. Thrust into the spotlight by strikes of gas in Austin Township,
established as probably the most important field in the state, Big
Rapids and Mecosta County has sought to formulate plans for industrial
recovery which will establish 1933 as the beginning of a new and
prosperous era unlike any the community has hitherto experienced."
The March, 1933 discovery of natural gas in the Michigan
Stray formation at 1,380 feet by the Taggart Brothers was the basis for
the Pioneer's headline. The Taggart discovery occurred despite
conventional wisdom that there was nothing worth discovering underneath
Mecosta County. A number of unsuccessful holes had been drilled in the
search for oil. According to local accounts, many companies and
individuals had given up their Mecosta County oil and gas leases
"feeling there was no such resource in the county." The conventional
wisdom was wrong and the Taggart Brothers success led to a flurry of
drilling, with the Austin Township Michigan Stray formation reservoir
ultimately producing 6.2 billion cubic feet (Bcf) of natural gas from
127 wells across 3,970 acres. Eventually, Mecosta County would see more
than 1,000 holes drilled in the search for oil and gas, resulting in 35
oil or gas fields, which collectively have produced over 10 million
barrels of oil and more than 22 Bcf of natural gas.
The Six Lakes Field eventually became a
cornerstone of Michigan's emerging as the nation's largest natural gas
storehouse, boasting the most natural gas storage capacity of any state
in the Union. In 1941 the played out site found new lease in life as a
13 Bcf capacity gas storage field . American Natural Resources (ANR),
parent company of Michigan Consolidated Gas, was among the vanguard in
Louisiana Gulf Coast offshore drilling. The firm built a huge natural
gas pipeline to deliver gas from the Gulf Coast directly to the Six
In 1935, at Howell in Livingston County a reservoir was
discovered in the Salina-Niagaran Formation at Livingston County. The
Howell Field would produce no oil but more than 21 billion cubic feet of
natural gas before conversion to a natural gas storage field in 1962.
Industrial Cooperation: The Michigan Oil & Gas News and the Michigan Oil And Gas Association
With projects proposed and underway throughout the Michigan
"oilpatch," oilfolk needed a way to keep up with the action. Local
newspaper filled some of the information gap but local papers were, by
their nature, not interested in the broader, statewide story. Moreover
local reporters lacked real knowledge of the industry to help filter
true happenings from the promoter's hype.
John Murphy, Jim Dunnigan, Lou Aaronson and Danny Miller,
with the backing of financial associates, published the first issue of
the Michigan Oil & Gas News on June 20, 1933. Besides a
number of field stories, the front page of that first issue (in a
broadsheet newspaper format) carried a message from the owners saying
"We want to give you a service that you need; in return we expect but
moderate compensation and your enthusiastic support. An honest living
and the feeling we have served, and well, are all the rewards we seek,"
Dunnigan, Aaronson, and Miller had been college buddies at
what is today Detroit's Wayne State University. Miller's father
encouraged them to start an oil reporting paper. Murphy was a Mt.
Pleasant local whose early thoughts and training were about a career
teaching or in the priesthood. Lindy Davis joined the publication in the
mid-1930s, as did Norman X. Lyon in 1937. Lyon and Davis both came from
the local Mt. Pleasant newspaper, Davis later went to work for the Grand Rapids Press.
Lyon took the job to "fill in for awhile." "Awhile" turned out to be a
very long time. From 1937 until 1972, Lyon would alternately be Editor
of the Oil News and the Mt. Pleasant Daily Times News, the local newspaper. After retirement, he continued as a contributor to the Oil & Gas News until his 1991 death.
Early in the game Murphy decided the future of the oil and
gas industry looked good enough to expand the publication. Incorporation
and stock sales followed in order to purchase a printing plant. In due
course the printing press was purchased and installed in upstairs
quarters, a move Murphy soon regretted. The equipment shook both the
newspaper building and those near it so much they were forced to quickly
find a ground floor location. In very short order a North Frankin
Street lot was purchased and a building built.
Also involved in the early days of the publication were:
- Don Carr, covered the Bloomingdale, Salem and Grand Rapids
shallow Traverse booms from 1937-42. Later Carr edited the publication
from 1947-1957 while Lyon went over to edit the Daily Times News. For a few months in 1967, Carr again became editor when Lyon was recovering from lung cancer surgery.
- Bob Breed, a degreed geologist who joined the Oil & Gas News
as the Bloomingdale boom took off. Breed and Carr scouted Southeastern
Michigan for the publication. Later Breed scouted for Sohio and Smith
Petroleum before going into consulting.
The Franklin Street location served the Oil & Gas News for
almost forty years. Through that time Murphy was Publisher and Lyon and
Carr alternated as Editor. In 1972, both Murphy and Lyon had reached
retirement age. Now the joint owners of the publication, they were
looking to sell the paper but without much luck. There was a chance the
paper might simply cease publication.
The Michigan Oil And Gas Association was not necessarily
interested in being in the publication business but it was interested in
keeping alive the weekly communications "glue" the magazine provided.
MOGA bought the publication rights to the Oil & Gas News in
December, 1972. For a few months the publication ceased printing, but
in March 1973 Jack R. Westbrook was hired as manager and editor. The
paper resumed publication in April. Dick Bolton, fresh from CMU
following U.S. Air Force service, was hired in June of that year to
assist Westbrook and edited the publication until 1981 when Bolton left
the publication. Bolton now works for the Mt. Pleasant Morning Sun as a photographer and columnist. Ironically, in 1982 Scott Bellinger, present MOGN Editor, left the Morning Sun to join the Oil & Gas News.
In 2002 Westbrook retired to become "contributing editor" and Bellinger
replaced Westbrook as managing editor of the publication.
In the past 20 years, the publication has:
- Run educational series of articles on various aspects of
the industry for the edification of other factions of the industry, as
well as the public.
- Reported extensively and more completely than any other
publication about the evolution and continued development of the
Michigan Natural Resources Trust Fund.
- Run papers and guest articles by industry experts about innovations within the industry or impacting the industry.
In addition the Michigan Oil & Gas News has:
- Published geological charts, drilling maps, and pipeline maps of Michigan for industry and public education.
- Published two books about Michigan's petroleum exploration and production history
- Educated the public about Michigan petroleum exploration
and production history by having personnel make speeches to civic,
educational and industry groups.
The Michigan Oil And Gas Association
Prior to the founding of the present Michigan Oil And Gas
Association, a group of petroleum folk in the Muskegon area formed an
organization in 1928 to establish higher crude oil prices. E. J.
Bouwsma, a Muskegon Oil Company employee, was the group's president.
However, as the boom at Muskegon subsided and the 1928 Mt. Pleasant
Field became the industry's focus, the Muskegon-based association faded
However the problems that bedeviled Muskegon oil producers,
particularly overproduction causing slumping crude oil prices soon
became a problem in the Central Michigan Fields. To deal with these
problems producers in Central Michigan, along with those from Muskegon
and Saginaw met in Mt. Pleasant and formed the Oil and Gas Producers
Association in 1931. Newly arrived oil attorney Haswell Grant became the
group's President. That association was phased out when its leaders
decided to reorganize with a broader member base and a better dues
This broader, better financed organization was named the
Michigan Oil And Gas Association. At a November 27, 1933 meeting, the
newly formed MOGA elected Gordon Oil's Howard D. Atha President.
State Regulation and Revenue
Among the most important changes that occurred during the
Great Depression was the beginning of significant state regulation of
oil and gas exploration as well as the development of new sources of
state revenue that depended upon that regulation. In 1927 the state
legislature first passed a law specifically regulating the oil
exploration industry. The head of the state's Department of Conservation
was named "Supervisor of Wells." The supervisor had several
responsibilities regarding the sinking, drilling, deepening, and capping
of oil wells.
The same law required that drillers receive a permit from the
state before beginning any project. Permit No. 1 was issued by the
(then) Michigan Conservation Department on September 27 for a well
drilled by Logan Oil Company in Logan Township, Mason County. A total
of 16 drilling permits were issued in 1927. Since 1927, the number of
drilling permits issues has become a quick way to measure exploration
activity. Boom years were tallied when the number of permits issues
exceeded 1,000. This has occurred 14 times, with extended "streaks"
between 1939 and 1941, and 1981-1983. In 1992 a record 2,024 drilling
permits were issued. Approximately 57,000 permits have been issued to
The state sought not only to regulate oil drilling but also
turned to exploration activity as a source of badly needed revenue. Much
earlier the state had passed the Public Domain Act of 1909 that
separated surface and mineral rights to state land and reserved for the
state "mineral, coal, oil, or gas" rights to any land the state sold.
The concept of leasing state-owned mineral properties for oil and gas
exploration purposes became a serious concern after the 1925 discovery
of oil in Saginaw. In 1928 the State Conservation Commission adopted a
policy requiring those requesting a lease to make written application,
agree to pay a rental fee of fifty cents per acre per year, established
that except in extraordinary circumstances no lease would be granted for
less than a five acre parcel, and that leases would run for a five year
period. The applicant also was required to document adequate financial
support and operating experience to both complete the project and do so
in an "intelligent and efficient" manner.
The idea of granting leases at a fixed price soon gave way to
the concept of auctioning leases for oil and gas exploration. On
December 30, 1929 the first public auction of oil and gas lease rights
to state-owned minerals was conducted in Lansing. Lease auctions in the
1930s helped buoy the state through the tough financial times of the
Depression. In the now 221 auction history of state leasing, offerings
have ranged from just 46 acres to as many as 583,241 acres. The lowest
overall lease auction event average bid of 3/10 of a cent per acre was
realized in August 1932 while the highest overall auction average bid of
$316 per acre was made in August 1981. All told, the state has offered
oil and gas lease rights to a total of 13,223,215 acres of state-owned
minerals on the public auction block with some of the acreage offered
more than once as leases expired or acreage went without a bid at first
offering. Of that total offering, 8,854,039 acres (66.95 percent of
acreage offered) has been successfully leased for a total of
$165,291,662. This has resulted in an overall per acre average of
Lease auctions are just the beginning of the cash flow
stream to land and mineral owners if commercial quantities of oil and
gas are found. Lease bonuses and rentals are payment to the mineral
owner for the right to look for oil and gas on their mineral property.
If none is found, the mineral owner is left the richer for having
leased. If producible oil and gas are found, the mineral owner's revenue
stream begins for the life of that production. In the state's case, of
course, there are in addition to those revenues, funds collected in
taxes. Leasing state minerals has produced a constant revenue stream for
the state and all its citizens.
In the aftermath of the 1938 Bloomingdale discovery and
drilling frenzy, the Michigan Oil And Gas Association (under the
leadership of Alma independent petroleum producer/explorer Harold M.
McClure, Sr.), representing the oil and gas industry, and Michigan
government regulators, in the interests of energy conservation and
safety, cooperated in the crafting of rules and procedures. The most
important of these established a minimum well spacing of one well per
ten acres and introduced mandatory production proration, limiting the
daily output of wells to preserve the natural dynamics of the reservoir
and prolong the effective productive life of the reservoir.
The Michigan legislature incorporated these rules and
regulations into law through Michigan Act 61 ( Michigan's "Oil and Gas
Law") of 1939. The law was considered classic oil regulation. Act 61 was
upgraded and incorporated into by the Natural Resources and
Environmental Protection Act (Act No. 451 of the Public Acts of 1994),
which continues to serve as primary regulatory instrument for the
Michigan oil and gas exploration and production industry.