How does a country cope when nearly 13 billion barrels of oil reserves vanish overnight? A soon to be released government forecast says that California's Monterey Shale deposit will yield only 4 percent of what was originally hoped. The downgrade immediately raised questions about the sustainability of the still nascent U.S. energy boom, which has sent domestic oil and gas production to its highest level in nearly 40 years. Because the Bakken and Eagle Ford shale plays currently generate nearly 70 percent of U.S. unconventional oil and gas, experts say the downgrade to Monterey does little to alter the near-term trajectory of the energy renaissance. However, they added it does bring into focus two major red flags: A well depletion factor that ramps up the urgency of finding new shale plays, and the need to upgrade new technology for that same purpose. Early estimates on recoverable Monterey shale oil by the Energy Information Administration—the data arm of the U.S. Department of Energy—which in 2011 topped 15 billion barrels, were "vastly overstated," said Dave Hughes, a Canadian geologist who has studied California's shale play extensively, in an interview. Read MoreWall Street, Big Oil and your pain at the gas pump

Geologists were more surprised by the timing of the EIA's writedown than its actual findings, expected to be made official next month. California's shale deposit had been considered the U.S.'s most prolific energy reserve: the agency's prior estimate of 13.7 billion barrels comprised about two-thirds of America's shale bounty. However, analysts say its terrain, as well as California's strict environmental regulation, always meant full scale drilling would be an uphill climb. Oil giant Chevron, at a 2013 shareholder meeting, bemoaned the lack of profit derived from its Monterey operations. Meanwhile, Venoco—once one of the biggest drillers in the shale formation—exited most of its Monterey acreage years ago in order to reduce debt and go private, a spokesman for the company told CNBC in an email. "The Monterey's geology is not an analog for the Bakken or Eagle Ford," said Hughes. "Those produce 69 percent of all U.S. [shale] oil. The great enthusiasm for [shale drilling] comes largely from those regions, which are doing famously," he said, adding that the EIA was "correcting to reality." Yet the practical impact of the EIA's downgrade puts a spotlight on an element of the shale boom that often goes unremarked by fracking advocates. Shale wells are prone to rapid depletion rates—spots in North Dakota's Bakken lose 85 percent of their capacity within a few years.

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"At some point we're going to hit a wall," Hughes said. "Monterey was a huge field wiped out with a stroke of a pen: That's like two Bakkens off the table in one fell swoop." If the U.S. boom is to be sustained beyond 2020, new shale plays will need to be discovered within the next few years, he added. "You're going to have a whole slew of poorly producing wells in a decade or so," Hughes said. "The good news is that supply grows short term, but the bad news is that we may have a very serious supply issue 10-15 years out."

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