An Opportunity Worth Exploring, Not Ignoring
By now, most Californians probably know that the combination of advanced drilling technologies and hydraulic fracturing in deep shale formations has created a surge in domestic energy production, significant job creation and tax revenues, and money saving through lower utility bills. The rising trend towards homegrown energy of all kinds was even a key feature of President Barack Obama’s State of the Union Address:
“After years of talking about it, we are finally poised to control our own energy future. We produce more oil at home than we have in 15 years. We have doubled the distance our cars will go on a gallon of gas, and the amount of renewable energy we generate from sources like wind and solar – with tens of thousands of good, American jobs to show for it. We produce more natural gas than ever before – and nearly everyone’s energy bill is lower because of it. And over the last four years, our emissions of the dangerous carbon pollution that threatens our planet have actually fallen.”
It turns out the news on domestic oil production is even better than that. The U.S. Energy Information Administration reports that domestic oil production is higher today than it’s been in 20 years, which in turn has allowed the nation to cut imports from OPEC countries like Saudi Arabia and Venezuela, by more than 35 percent.
In California, the potential development of the Monterey Shale may hold the key to reversing the decline in our state’s oil production, maintaining our status as a top energy-producing state, reducing our reliance on OPEC oil, and spurring the job creation, economic growth and higher revenues that other states have experienced. We should emphasize the word “potential,” of course, because we still don’t know how much of the estimated 15 billion barrels of recoverable oil in the Monterey can actually be developed. Still, the potential is promising enough to make this an opportunity well worth exploring.
Unfortunately, a small but vocal band of fringe activist groups wants to deny California the chance to pursue this opportunity for purely ideological reasons. Rather than join the oil and gas industry, state regulators and California’s elected officials at the table for a rational discussion about the environmental safeguards that should apply to Monterey Shale exploration and development, groups like Food & Water Watch and the Center for Biological Diversity are simply shouting their political beliefs – which amount to the elimination of all domestic oil and gas development – from the rooftops.
Unfortunately for the activists, however, major news outlets are telling the state, nation and the rest of the world about the economic potential of the Monterey Shale, so people will know what these groups are trying to deny the people of California.
According to a recent op-ed in the Wall Street Journal:
“In the heyday of the 1960s, when the state’s education system was first in the nation, California’s oil production ranked second nationally, at about 400 million barrels annually. Now with production down 50%, California has dropped to No. 4 in oil production, behind Texas, North Dakota and Alaska. North Dakota’s embrace of the shale-oil revolution vaulted it to No. 2 and has led to low unemployment, no deficit, and university funding on the rise.
The fracking and smart-drilling revolution that has unlocked ‘tight’ oil and reversed America’s 40-year production decline, emerges from the same constellation of information and materials technologies that yielded the iPad and MRI. Bill Gates recently observed that the “one thing that is different today [in energy] is software, which changes the game.” Those few words contain more wisdom than most energy tomes. …
A savvy politician might also point out the promise of Silicon Valley developing still more advanced hydrocarbon tech. One can foresee a growing array of software, sensor, materials and big-data startups that underpin the smart controls and data processing central to modern oil production.
For California, it could be back-to-the-future, a well-funded future, courtesy of technology again unleashing wealth from natural resources. That would be quite a future to behold, and quite a legacy for Gov. Brown.”
From the news section of the New York Times:
“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.”
And Investor’s Business Daily recently editorialized under the headline “Could Monterey Shale Save California?”:
“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.
Until recently, the complex geology of the formation has made exploration and extraction prohibitively expensive.
But as with oil from the Bakken shale in North Dakota and natural gas extracted from the Marcellus formation in the Northeast, technological advances have unleashed a bounty of riches, pushing proven reserves upward and smashing the myth of peak oil.”
As I mentioned before, we still don’t know how much oil can be developed from the Monterey Shale. But the potential is too big to ignore, as all but the most extreme activists understand. But ignoring this potential and denying our state the opportunity to grow the economy, create jobs and generate more revenues to pay for essential services is exactly what the activists are demanding when they say California should impose a moratorium or outright ban on hydraulic fracturing. That’s not a rational position, it’s an ideological one, and it carries a huge price tag for California that the activists are hoping nobody will notice.