Monterey Shale could save California economy if state can overcome environmentalists block
At end of 2012 North Dakota was announced as the state with the best financial status and California the worst. With some irony, the oil production is key to both states.
The former Golden State is floating in debt, even as it sits on two-thirds of America’s shale oil reserves locked in a formation four times the size of the one that sparked North Dakota’s economic boom.
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North Dakota is now the largest oil producer in the country after Texas with a monthly oil output of about 20 million barrels. North Dakota’s oil boom accounts for 11% of U.S. oil production, and it is the impetus behind the state’s $3.8 billion surplus and an unemployment rate of just 3.2%, the lowest in the nation.
California is not running a surplus, but it is sitting on a lot more oil than is contained in the Bakken shale formation North Dakota straddles. Covering 1,750 square miles from southern to central California, the Monterey shale formation has untapped deposits estimated at 15.4 billion barrels, according to the United States Energy Information Administration.
Gabriel Garcia, an assistant field manager at the federal Bureau of Land Management said that, “everyone has known that there is shale oil not just in the Monterey Shale but also in North Dakota and Wyoming and all over the country. Back in the ‘70s, there were discussions that there’s all this oil and all we’ve got to do is get it. Now 40 years later, the technologies have become available to actually get it in a cost-effective way.”
Unlike fields such as Midwat-Sunset where the oil deposits are located less than 2,000 feet below the surface, the shale oil in the Monterey Shale formation is between 6,000 and 15,000 feet down.
Oil companies are rushing into the area and setting up offices in Bakersfield, all keen of the possibility of tapping into Monterey’s vast oil riches. Garcia noted that they have noticed far more interest in land leases over the past few years, which has seen prices soar.
“Some of that has to do with speculation on new technologies, and some of that has to do with the high price of oil.”
