This Rocks: California Oil Shale No Bonanza May 22, 2014

Oil companies have been salivating at the possibility of turning central California into a sewer of toxic air, poisoned water, dried up wells, squalid boomtowns, overcrowded man camps, bursting jails and sex slavery. It’s their vision of the future for most of America.

Looks like maybe not. At least, not yet.

LATimes:

Federal energy authorities have slashed by 96% the estimated amount of recoverable oil buried in California’s vast Monterey Shale deposits, deflating its potential as a national “black gold mine” of petroleum. Just 600 million barrels of oil can be extracted with existing technology, far below the 13.7 billion barrels once thought recoverable from the jumbled layers of subterranean rock spread across much of Central California, the U.S. Energy Information Administration said. The new estimate, expected to be released publicly next month, is a blow to the nation’s oil future and to projections that an oil boom would bring as many as 2.8 million new jobs to California and boost tax revenue by $24.6 billion annually.

– Federal energy authorities have slashed by 96% the estimated amount of recoverable oil buried in California’s vast Monterey Shale deposits, deflating its potential as a national “black gold mine” of petroleum. Just 600 million barrels of oil can be extracted with existing technology, far below the 13.7 billion barrels once thought recoverable from the jumbled layers of subterranean rock spread across much of Central California, the U.S. Energy Information Administration said. The new estimate, expected to be released publicly next month, is a blow to the nation’s oil future and to projections that an oil boom would bring as many as 2.8 million new jobs to California and boost tax revenue by $24.6 billion annually.

Post Carbon Institute:

The downgrade has major implications for California’s energy and economic future, as well as the debate over hydraulic fracturing (“fracking”) and other forms of well stimulation-enabled oil development. The perception of an impending oil boom has dominated energy policy discussions in California since the release of a 2011 report by the EIA which had estimated up to 15.4 billion barrels of recoverable tight oil—64% of the nation’s total—in the state’s Monterey shale formation. The estimate was widely cited by drilling proponents, and economic forecasts based on it projected millions of new jobs and billions in new tax revenue. “The oil had always been a statistical fantasy,” said geoscientist J. David Hughes, author of Drilling California: A Reality Check on the Monterey Shale, an influential report critical of the EIA’s original Monterey estimates. “Left out of all the hoopla was the fact that the EIA’s estimate was little more than a back-of-the-envelope

San Jose Mercury News:

The news, which cut the forecast by 96 percent, weakened hopes for an oil boom that would bring millions of jobs and billions of dollars in new tax revenue to the Golden State, home to about two-thirds of the country’s shale oil reserves. But foes of hydraulic fracturing — which uses pressurized liquid to break rock formations to mine gas or oil — were over the moon. They argued that the new estimate by U.S. Energy Information Administration scientists makes fracking in California politically unfeasible considering the potential environmental and seismic damage. “The myth of vast supplies of domestic oil resources and billions in potential revenue from drilling in California by the oil industry has been busted,” said San Francisco billionaire Tom Steyer, the former hedge fund manager who founded the nonprofit NextGen Climate to fight global warming. The earlier estimates of the oil available in the Monterey Shale — a 1,750-square-mile formation extending from Sacramento to Los Angeles — had sparked a wave of California speculation not seen since the Gold Rush. Oil companies scurried to position themselves, and many politicians rushed to tally up the economic benefits — causing a serious rift between environmentalists and Gov. Jerry Brown, who sees himself as a champion against climate change. But now the federal agency that keeps track of the nation’s energy reserves estimates that current fracking methods could extract only 600 million barrels of oil from the formation — a far cry from the 13.7 billion barrels once thought to be recoverable. The new estimate was first reported by the Los Angeles Times. The oil industry, however, was hardly ready to hoist a white flag. Tupper Hull, vice president of the Western States Petroleum Association, an oil industry trade group, said, “We’ve always been quite clear that there are challenges to producing oil out of the Monterey” Shale that set it apart from shale formations already tapped in North Dakota, Texas and elsewhere. “I have every confidence that the oil companies possess the experience and the ability to innovate. If anyone can figure it out, they can figure it out.”