A Look at Michigan Energy Consumption and Production

Michigan is consistently one of the top energy consumers in the United States because of it’s population (8th largest in the country), climate, and industry-based economy.

According to the Energy Information Administration, natural gas is the most consumed energy source in Michigan, with 758.7 trillion btus of natural gas consumed in 2010 (or nearly 30 percent of all energy consumption). Coal contributed more than 25 percent to the  state’s overall energy consumption, which can be attributed to the high level of industry and manufacturing, especially within Michigan’s southwest region. The use of electric energy and biomass increased the most from previous years.

Energy use in the residential, commercial, and transportation sectors in Michigan have changed consistently and evenly over the last 50 years. The industrial sector, meanwhile, has leveled off. As Michigan continues to move away from an industry-based economy, the industrial sector of energy use is predicted to continue decreasing in the coming years while the others – especially transportation – continue to increase. Transportation is above the other sectors and has risen at the fastest rate, with just more than 27 quadrillion btus consumed in 2008. This translates to about 4.6 billion gallons of gasoline and $13 billion spent. The total amount spent on energy in Michigan in 2009 was $31.3 billion, down from the $37 billion spent in 2007 (this decrease is shown in the chart above). Currently, Michigan is ranked eighth in commercial, residential and industrial energy consumption and tenth in transportation energy consumption. 

The amount of energy that Michigan produces is quite low compared to the amount it uses. Michigan continues to rely heavily on coal for the majority of its energy; however, because Michigan does not have any coal reserves, it must import from other states. Considering that nearly 67 percent of Michigan’s energy comes from, that’s a lot to make up for.  In 2010, the state produced over 150 trillion btus of natural gas, which made up about 8 percent of energy. Michigan’s three nuclear power plants also created about 21 percent of the state’s energy, while crude oil, biofuels, and other renewable energy sources made up the rest.

House flipping causing rise in Lansing housing market

Every day, Eric Schertzing drives past a newly renovated house located in a residential area of Lansing. Just months prior that house was a foreclosed property, sold by Schertzing, chairman of the Ingham County Land Bank, for just $20,000. The buyer renovated the house and resold it for $80,000 — one of the highest prices for a house in Lansing, in a neighborhood lined with homes that wouldn’t sell for half that amount.

“The effects of this home on the neighborhood and the local market are enormous,”

Schertzing said. “The property values of the surrounding homes all rose, and it is assumed that the tenant has more disposable income, which can help bring up the economic status of the neighborhood.”

Home reselling, also known as house flipping, is returning in good form across the nation, according to an online webinar published by RealtyTrac in September. It said about 100,000 flips were made nationwide in the first half of 2012, a 25 percent increase from one year earlier.

Michigan was eighth on the list of states with the most flips.

One explanation is that Michigan interest rates are at an historic low, according to Mike Bowler, an associate broker with Coldwell Banker Hubbell Briarwood real estate company in Lansing. He said the average sale price for a house in Lansing is $50,800, a 7 percent increase from last year.

According to Schertzing, the Land Bank was a driving force of that increase.

The initiative of the Land Bank, an organization that has sold more than 200 homes in the Lansing area since 2005, is to improve the aesthetics and economics of the local market.

The Land Bank reports selling 138 properties at auction this year for a total of $1.85 million. In comparison, it sold just eight properties in 2008, with $2,100 in sales.

A graph showing the increase in auction sales by the Land Bank over the last five years.

None of those eight properties sold for more than $500. This year, very few foreclosed properties sold at auction for less than $3,000. Several sold for much more.

Schertzing and his team use funding from the American Recovery and Reinvestment Act of 2009 to raise the value of cheap houses and, as Schertzing said, “set the top of the Lansing market.”

“The goal right now is to attain a stable, functional community,” Schertzing said. “By flipping homes in the better neighborhoods of Lansing, we will create a solid foundation to build upon and see changes begin to occur from block to block.”

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