On Tuesday, the U.S. Energy Information Agency slashed the estimates of recoverable oil in California’s Monterey Shale by 96%. This came as a blow to California, previously expected to become the nation’s “black goldmine” of energy resources.
The original assessment of 13.7 billion barrels once thought recoverable from the layers of subterranean rock spread across much of Central California has now been cut to just 600 million barrels of recoverable crude; reserves comparable to those of Bolivia.
EIA analyst John Staub said: “From the information we’ve been able to gather, we’ve not seen evidence that oil extraction in this area is very productive using techniques like fracking…Our oil production estimates combined with a dearth of knowledge about geological differences among the oil fields led to erroneous predictions and estimates.”
There has been a lot of enthusiasm around the possibilities of Monterey Shale, with estimates of 3 million jobs to be created, as well as debates about fracking and its impact on the environment and human habitation. These debates have now become moot.
The problem with Monterey Shale seems to lie in its difficult geology. Unlike shale deposits in North Dakota and Texas, which are relatively even and layered like a cake, Monterey Shale has been folded and shattered by seismic activity, with the oil found at a deeper strata.
Despite the bad news, some oil industry experts refuse to be discouraged. “We have a lot of confidence in the intelligence and skill of our engineers and geologists to find ways to adapt,” said Tupper Hull, spokesman for the Western States Petroleum Assn. “As the technologies change, the production rates could also change dramatically.”
Rock Zierman, chief executive of the trade group California Independent Petroleum Assn., which represents many independent exploration companies, also sounded hopeful.”The smart money is still investing in California oil and gas,” Zierman said. “The oil is there,” Zierman said. “But this is a tough business.”
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