Cost of Michigan's petroleum imports

According to the Michigan Public Service Commission, our state’s total energy expenditure for petroleum was $15.4 billion. [1]

To determine the percentage of gasoline that is typically imported into Michigan, we look at the 2008 U.S. Energy Information Administration (EIA) data, subtracting in-state production (6,223,000 barrels petroleum), for which we assume that the dollars stay here in Michigan, from Michigan’s total consumption (172,886,000 barrels petroleum). We take this amount imported (166,663,000 barrels) and divide it by the total consumed (and then multiply by 100%) to determine what percent of the total consumed is imported. Based on 2008 data, we conclude that 96.4 percent of the petroleum consumed in Michigan was not produced here. Looking at the most recent EIA data available (2009), 96.4 percent of Michigan’s total 2009 petroleum expenditure ($15.4 billion) is $14.8 billion.

In 2009, prices were about 30% lower than in 2008 and consumption was lower. One factor to consider for the 2009 calculations listed above is that gasoline was approximately $2.37 per gallon in 2009, but is expected to average $3.89 per gallon in 2011. As illustrated in this chart from GasBuddy.com, gasoline costs dipped in 2009 and 2010, but are now returning to 2008 levels.

We witnessed this firsthand on May 4, 2011 when Regular-Unleaded gasoline hit its highest recorded average price in Michigan of $4.26 per gallon.[2]

As a result of these higher gasoline prices, the Michigan Public Service Commission expects, "the average U.S. household is expected to pay about $787.50 more for vehicle fueling costs than in 2010."[3]

Considering the increase in price, relative stability of our in-state production, and an expected increase in consumption[4], we estimate that Michigan dollars exported for petroleum will significantly increase in 2011.