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Energy in Communities: Lansing, Michigan

In Lansing, Michigan, Energy Helps Write New Growth Narrative

It’s 8 a.m. at Blue Owl Coffee in East Lansing, Michigan, the twin city to Lansing, the state capital. Blue Owl sits just a few blocks from Michigan State University and prides itself on serving “community driven coffee.” Locals, college students and faculty alike know Blue Owl’s baristas by name. Like many other locally owned businesses throughout the area, Blue Owl is hiring. 

API President and CEO Mike Sommers at Board of Water & Light (BWL)

API President and CEO Mike Sommers (right) and Dick Peffley,
Lansing Board of Water & Light general manager and CEO – Lansing, Michigan

That’s a small clue to a big story. People here can remember when things were much different: double-digit unemployment and folks talking about the entire state approaching an economic abyss. “There was a bumper sticker on cars all over town that read, ‘Will the last person leaving Michigan please turn off the lights?’” recalls Rich Studley, president and CEO of the Michigan Chamber of Commerce. “The city was at risk of losing General Motors, which at the time, was one of our last major manufacturers.”

"Energy infrastructure enables our plants and skilled workers to build some of America’s best cars.”
– Rich Studley, President and CEO, Michigan Chamber of Commerce

Those unhappy days are a memory. The unemployment rate in the Lansing-East Lansing area is about 3.6% today . Jobs have increased over the past year and local officials are optimistic the area is positioned for growth in the years to come. GM stayed; Lansing is home to the automaker’s two newest manufacturing plants. Playing a significant role here and in other parts of the country: abundant domestic natural gas and oil, helping grow the local economy and empowering people, businesses and manufacturing.

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Studley says the area’s energy infrastructure was a significant factor in GM’s decision to stay and has supported growth. “Manufacturers need access to safe, reliable and abundant energy,” he says, “and we’re proud that Lansing has the energy infrastructure that enables plants and skilled workers to build some of America’s best cars.”  

Of course, natural gas and oil also mean fuels for consumers and consumer-serving sectors. In December 2017, the Lansing Board of Water & Light (BWL), the municipal utility, announced it would replace the last of its coal-fired generation facilities with a $500 million natural gas-fueled power plant. BWL broke ground in mid-2019. The station is expected to be completed by 2021 and will be capable of generating 250 megawatts of electricity. 

BWL General Manager Dick Peffley says the plan is vitally important for the future of the Greater Lansing region. “Natural gas enables BWL to provide clean, affordable and reliable electricity to our customers while reducing our carbon footprint,” Peffley says. “As we work to integrate wind and solar, natural gas will also serve as an important backup for our growing renewable power systems.” 

Overall, Michigan’s natural gas-fueled generation has increased 130% over the past 10 years. Carbon dioxide emissions from electric power generation declined more than 25% between 2007 and 2017, mirroring the national trend of energy-related CO2 emissions reaching their lowest levels in a generation. Total statewide CO2 emissions declined 16% over that period.

Peffley says BWL’s upgrades are benefiting consumers while also helping to drive economic development, along with road and other infrastructure improvements. “When we built our natural gas plant downtown, 90% of the buildings along Washington Avenue in Lansing were vacant,” he says. “We’re a much different city today. The street is lined with several new restaurants, coffee shops and more.”

In Michigan’s 8th Congressional District, where Lansing is located, the natural gas, oil and petrochemicals industry:

$222 Million

Directly adds $222 million in labor income – wages, salaries and benefits that go to the district’s workforce

More than $1 Billion

Industry supports more than $1 billion in labor income across other sectors

More than $1.7 Billion

Industry also adds more than $1.7 billion each year to the district’s overall economy – nearly 5% of the total

Indeed, Blue Owl Coffee’s Lansing shop sits just steps away from the BWL headquarters and the REO Cogeneration Plant, the utility’s first natural gas-fueled power plant. Other locally owned businesses have benefited, too.

In 2004, Jennifer Van Dyke was teaching sculpture and design courses at Virginia Commonwealth University in Richmond, when she got a call from her father. Swan Electric, their family-owned electrical construction firm, had been chosen for a large GM project in Lansing, and he needed her help.   

Today, Van Dyke and her brother, David, are third-generation co-owners of the business that does natural gas and oil-related work across the state. “Whether we’re working with oil and natural gas companies, utilities or large industrial manufacturers, most of our work is tied to energy in some way, and we’re proud to provide jobs within our communities,” she says.  

Swan Electric has supported BWL on projects over the years. This includes the construction of a new 130-megawatt electrical Central Substation in 2018, located just south of Lansing’s downtown. 

For companies like Swan Electric, BWL and Blue Owl Coffee, natural gas is powering their success and that of Lansing as a whole. Across Michigan, the natural gas and oil industry contributed $14.6 billion to the state’s economy while supporting more than 159,000 jobs, or nearly 3% of the state’s total employment in 2015. Yet, natural gas and oil’s part is larger than the jobs they create or the vendors who support their operations. For growth all across the economic spectrum, it takes energy.

“American oil and natural gas play an important role in our economy,” Van Dyke says. “Lower energy costs attract industrial manufacturers to Greater Lansing, and that leads to more work for tier-two suppliers like Swan Electric and businesses of all kinds.” 

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