Statewide Oil and Gas Management - 000-0701-26
Description
The Geologic Resources Management Division (GRMD), within the Department of Environment, Great Lakes, and Energy (EGLE), regulates the locating, drilling, operating, inspecting, and plugging of wells used for production of oil and gas. The mission of GRMD is to foster the best use and understanding of Michigan’s geologic resources for social and economic benefits while protecting associated resource values, property rights, the environment, and public health and safety. As of June 18, 2026, GRMD oversaw 13,500 oil and gas wells.
The State of Michigan collects severance taxes, privilege fees, and royalties monthly derived from the production of oil and gas. The Department of Treasury collects severance taxes and privilege fees while the Department of Natural Resources (DNR) processes the royalties from oil and gas leases on State land. In fiscal year 2025, $20.7 million was collected in severance taxes, $3.5 million was collected in privilege fees, and $12.7 million was collected in royalties.
Audit Objectives
- To assess the effectiveness of EGLE’s GRMD efforts to ensure compliance with select State laws governing oil and gas well production.
- To assess the sufficiency of DNR’s, EGLE’s, and Treasury’s efforts to ensure the accuracy and completeness of oil and gas well production revenue.
Timing
Estimated Release Date: Late 2026
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