The NY Times provides tantalizing but woefully incomplete coverage of the prospects for a new oil boom in California.
Comprising two-thirds of the United States’s total estimated shale oil reserves and covering 1,750 square miles from Southern to Central California, the Monterey Shale could turn California into the nation’s top oil-producing state and yield the kind of riches that far smaller shale oil deposits have showered on North Dakota and Texas.
For decades, oilmen have been unable to extricate the Monterey Shale’s crude because of its complex geological formation, which makes extraction quite expensive. But as the oil industry’s technological advances succeed in unlocking oil from increasingly difficult locations, there is heady talk that California could be in store for a new oil boom.
A casual reader might infer that the new developments include the fracking and horiziontal drilling techniques that have revolutionized oil production in North Dakota and Texas. However, CNN explains that the problem is more complicated than simply moving established technology westward:
As a result of the San Andres fault, California's geologic layers are folded like an accordion rather than simply stacked on top of each other like they are in other Shale states. The folds have naturally cracked the shale rock, and much of California's current "conventional" oil production -- the third largest in the nation -- is thought to come from the Monterey.
But the folds mean recent advancements that have made shale oil and gas profitable to extract -- horizontal drilling combined with hydraulic fracturing -- don't work as well in California. It's hard to drill horizontally if the shale is not flat.
Plus, it appears the Monterey is made up of shale rock that doesn't respond as well to hydraulic fracturing -- the controversial practice known as fracking that involves injecting water, sand and chemicals into the ground under high pressure to crack the rock and allow the oil and gas to flow.
OK. The Times also present the environmental issue as a simple scuffle of Greens versus Frackers. Here is a Geoffrey Styles, energy consultant delivering some nuance:
However it is eventually unlocked, the Monterey shale offers significant
benefits to California. Start with the fact that the state's oil
production has been in steady decline
since the mid-1980s. Together with the depletion of Alaska's North
Slope field, that has meant that the US West Coast, which was once a net
exporter of oil, now imports increasing quantities of oil--half of it from OPEC--to meet local demand. That trend has continued even as the import dependence of the rest of the country has fallen substantially
due to higher production and receding demand. The Monterey could slash
California's imports, while adding billions of dollars a year to the
local economy and to the shaky state budget, along with lots of good
It could even provide environmental benefits. Restoring oil self-sufficiency would reduce the risk of spills from the tankers bringing in imports, while refilling existing infrastructure. And if the Monterey yields oil similar in quality to the light, sweet crude now being produced from the Bakken and Eagle Ford shales, it could actually cut both greenhouse gas emissions and local pollution by reducing the refining intensity required to turn the state's current diet of heavier crudes into ultra-low sulfur gasoline and diesel fuel.
However, Mr. Styles' heart is not yet racing:
I suspect from my research in the last few weeks that anyone betting on an imminent explosion of oil output from the Monterey shale is likely to be disappointed. The process seems likely to be slower than elsewhere, though with a bigger potential payoff. But that doesn't make it irrelevant to a state that has set its sights on being at the forefront of the transformation to cleaner energy sources. California still consumes 1.8 million barrels per day of petroleum products, and it will burn many more billions of barrels on its way to its chosen future of electric vehicles running on wind and solar power, and trucks and buses burning compressed or liquefied natural gas. Developing the Monterey shale won't solve all of California's energy challenges and might create a few new ones, yet it could prove another timely contribution from a local oil industry that has been a major driver of the state's economy for well over a century.
Maybe not a gamechanger then, but helpful.