Federal government decreases recoverable Monterey Shale oil estimates by 96%

by Brian Leubitz

Many in government were expecting there to be something of a North Dakota style oil boom in California. Perhaps we best not rely on that for all of our future revenues:

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. (LA Times)

Now, this doesn’t mean that there aren’t billions of barrels of oil under California, but it is simply too difficult to access, even using the latest technologies. Some will certainly continue to explore here, and maybe with future technologies more will be unlocked. However, for the time being, the boom won’t be coming.

I suppose my headline is a bit provocative, because there will still be fracking in the state to access some of that 600 million barrels. And we still need to learn more about the fracking process before we go gung-ho on our shale with a bunch of questionable chemicals and our increasingly precious water. But the incentive for large scale fracking operations has just been drastically diminished.