Why hope for CA oil boom is fading fast

Fracking-ban1-300x248It took some time, but a 2011 report by the Federal Energy Information Administration that estimated that California’s Monterey shale underground land mass formation had 15.4 billion barrels of accessible oil and a follow-up study that put the figure at 13.7 billion barrels of oil — about twice as much as the rest of the nation combined — got plenty of folks’ attention. Advances in hydraulic fracturing, known as fracking, made extracting the oil cost-effective.

Excitement about a possible oil bonanza was stoked by a 2012 City Journal analysis. That continued to build in early 2013 after word spread that oil companies were already buying land above the 1,750-square-mile shale formation, which extends across much of central California to the Santa Barbara-San Luis Obispo coast. Then came a 2013 USC study that estimated development of the Monterey shale could boost the state’s economic activity by 14.3 percent and had the potential to generate nearly $25 billion in new state tax revenue by 2020.

In January 2014, Gov. Jerry Brown made headlines when he said he was open to allowing fracking in California, getting blasted by environmentalists as a result. Fracking, which involves the use of underground water cannons to eradicate rock formations and allow access to previously unreachable oil and natural gas reserves, has been targeted by green groups on safety and health grounds for a decade.

But it’s been all downhill ever since for those enthusiastic about oil exploration in the Golden State. It’s not just that low oil prices have left energy companies facing a “world of hurt,” in the words of the Houston Chronicle, and without the resources to pursue large new drilling programs in California or elsewhere. It’s specific, daunting developments.

Last week, Los Angeles-based U.S. District Judge Michael Fitzgerald halted plans to allow fracking of the Monterey shale on public lands in central California and rebuked the U.S. Bureau of Land Management for failing to do a full review of the environmental effects of the extraction technique.

In July 2015, state officials released final rules on fracking that were billed as the toughest in the nation. They were seen as much more onerous than the tough-but-manageable draft rules released in fall 2013 to the applause of energy companies.

And in May 2014, the federal Energy Information Administration — the same agency that triggered the interest in the Monterey shale in the first place — cut its estimate of how much oil could be recovered from the underground rock formation by 96 percent, to 600 million barrels.

Obama administration still backs fracking in state

sally.jewellWho remains enthusiastic about oil exploration in California? U.S. Interior Secretary Sally Jewell, who last year criticized local governments in the Golden State for adopting fracking bans.

“There is a lot of misinformation about fracking,” Jewell told KQED in an interview. “I think that localized efforts or statewide efforts in many cases don’t understand the science behind it and I think there needs to be more science.”

That may surprise some, given the Obama administration’s aggressive pursuit of a global climate-change strategy that is based on much less use of fossil fuels. But President Obama campaigned for re-election in 2012 on an “all of the above” strategy for energy production and has continued with the approach in his second term.

Jewell endorsed the fracking plan for California public land that was blocked last week by the Los Angeles federal judge. The Bureau of Land Management, the agency the judge criticized, is part of the Interior Department.

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  1. Ron
    Ron 12 September, 2016, 07:00

    Further restrictions on recovering crude oil from the California’s Monterey shale is NOT a hit on big oil, it’s a hit on the California and World economies based on basic Economics 101.

    With California being an energy island with the Sierra Mountains on one side and the Pacific Ocean on the other side, there are no pipelines “into” the state from the rest of the country. In 1980 California’s instate production and imports from Alaska provided 94% of California’s needs, now it’s less than 50% of our needs, with more than 50% imported from foreign countries. Alaska imports have been declining, as well as in-state production. Crude by rail to the California energy island are not getting public support. America has more recoverable oil and natural gas supplies than Saudi Arabia, Iran, Russia, China, and all of the OPEC nations COMBINED.

    Today, according to the Energy Information Agency (EIA) the United States is the largest producer of crude oil in the world. 49 States can be energy independent of foreign crude oil EXCEPT for California which will rely more and more on foreign crude oil. California continues to increase their imports of crude, already at more than 50% of our needs which is about 1,000,000 barrels per day, as the California “energy island” has no access to the growth in domestic oil production, other than crude by rail.

    By shutting down the oil industry, they would be depriving the airports of the 10,000,000 gallons of jet fuel required every day to keep them running smoothly, resulting in an international economic crisis. In addition, the 97% of our 32 million vehicles that run on conventional transportation fuels would be deprived of the 40,000,000 gallons of fuel being consumed every day, also resulting in a world economic crisis. All the above manufactured fuels are now manufactured in-state by the few manufacturers that are left in California.

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  2. Sean
    Sean 12 September, 2016, 13:57

    California has the highest poverty rate in the nation when taking account for the high cost of living in the state. High paying jobs in oil extraction would be a Godsend for many blue collar workers and the lower cost of locally sourced oil would benefit all. Obviously setting an example in the name of climate change, however pointless, has much higher priority for California politicians.

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  3. Spurwing Plover
    Spurwing Plover 13 September, 2016, 13:23

    All these anti fracking,anti drilling Keep it in the Ground idiots need to spend a whole winter in a deep dank drafty cave with no heat no electricity no running water and let them see how they would force us all to live if these fool had their way

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Chris Reed

Chris Reed

Chris Reed is a regular contributor to Cal Watchdog. Reed is an editorial writer for U-T San Diego. Before joining the U-T in July 2005, he was the opinion-page columns editor and wrote the featured weekly Unspin column for The Orange County Register. Reed was on the national board of the Association of Opinion Page Editors from 2003-2005. From 2000 to 2005, Reed made more than 100 appearances as a featured news analyst on Los Angeles-area National Public Radio affiliate KPCC-FM. From 1990 to 1998, Reed was an editor, metro columnist and film critic at the Inland Valley Daily Bulletin in Ontario. Reed has a political science degree from the University of Hawaii (Hilo campus), where he edited the student newspaper, the Vulcan News, his senior year. He is on Twitter: @chrisreed99.

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