LANSING, Mich. — Michigan is putting $7.5 million behind a bold question: is the state sitting on a vast, untapped source of clean energy buried deep in its bedrock?

The Michigan Infrastructure Office announced the investment Thursday, Aug. 20, through the Make It in Michigan Competitiveness Fund. The money will support research, mapping, and the drilling of test wells to determine whether geologic hydrogen, a naturally occurring form of the gas, is present in meaningful quantities beneath the state.

Geologic hydrogen forms underground over millions of years and, when burned, produces only water. It emits no greenhouse gases or harmful pollutants, unlike fossil fuels. If found in commercial quantities, the resource could help decarbonize some of Michigan's highest-emitting industries, including trucking, steel, and cement manufacturing.

A seed to pull down federal dollars

The investment delivers on Executive Directive 2026-1, which Governor Gretchen Whitmer signed in January. The directive established the Michigan Geologic Hydrogen Exploration and Preparedness Initiative and directed state government to prepare for the responsible exploration of the emerging energy source.

State officials are framing the $7.5 million not as a full-scale development budget but as seed funding designed to unlock federal money.

"This money we view primarily as setting the state up with a bit of seed funding to really pull down (federal funds) and make sure we're the national leader when it comes to validating this resource using those federal resources," said Kevin Mehren, director of the Michigan Infrastructure Office.

A 2025 study from the U.S. Geological Survey mapped regions of the country with the most favorable conditions for buried hydrogen and placed Michigan on the higher end of the rankings. The study prompted the governor's January directive.

Why Michigan?

Michigan's geology appears to give it a natural advantage. The state sits atop the Midcontinent Rift, a geological feature where the North American continent began to split apart more than a billion years ago. That formation created the Michigan Basin, which left younger rock in the center of the state and deeper, older material closer to the basin's edges. Those older formations, located near urban areas such as Detroit and Traverse City, are where hydrogen may have formed.

Officials said the most promising areas include the iron range in the Upper Peninsula, the northwestern Lower Peninsula, and Southeast Michigan.

Existing oil and natural gas drilling infrastructure in northern Michigan could also be put to use in the search. Wells for gas drilling already dot the region, and the equipment could be repurposed to search for hydrogen.

"We haven't typically been looking for hydrogen in the past when we've drilled these wells," said Brian Ellis, an associate professor at the University of Michigan and co-director of MI Hydrogen, the school's hydrogen research program. "So there's opportunity to potentially data-mine information that we already have and see if there's hydrogen."

A cautious optimism

State agencies have been clear that the opportunity remains uncertain. A Michigan Infrastructure Office report produced this year in response to the governor's initiative calls the resource "a potentially significant but highly uncertain opportunity."

Michigan has only two recorded hydrogen discoveries, near Ann Arbor and Belleville, despite roughly 60,000 boreholes drilled for oil and gas exploration. The new funding is expected to help close that knowledge gap.

The report projects that the statewide economic value of the resource would likely be in the tens of millions of dollars per year in an early market, with the potential to reach the hundreds of millions by 2050 if commercially successful development follows.

Regulatory hurdles remain

Developing the resource would require changes to state law and regulation. The Michigan Department of Natural Resources, which manages 4.5 million acres, would need new authority to allow leasing of subsurface rights on state-owned land for hydrogen exploration.

Environmental officials said the state would need hydrogen-specific regulations, and the Michigan Public Service Commission would need authority over the siting of hydrogen-specific pipelines if any were to be built.

Despite these hurdles, Mehren said the resource could prove to be a uniquely bipartisan issue.

"You are ostensibly drilling, 'drill, baby, drill' is the catchphrase they use, for zero-emission energy," Mehren said. "It's a domestic resource, but you are providing a new clean resource that could be an economic driver, decarbonize industry, and help fight climate change."

What's next

The initial funding will support research in areas where scientists believe large stores of natural hydrogen may exist, particularly around Michigan's Lower Peninsula. State officials said the work could unfold in partnership with the U.S. Department of Energy, national laboratories, the private sector, and universities. The funding will also advance mapping using decades of state geological records and support public engagement and educational resources.