The amount of oil that could be extracted from the country’s largest shale oil formation has been overstated by 96 percent, federal energy officials admitted Tuesday, dealing a major blow to industry projections about a new oil-boom future.
In a new estimate to be released publicly next month, the U.S. Energy Information Administration is expected to say that only 600 million barrels of oil can be extracted from California’s Monterey Shale deposits — an amount of oil that would only be enough to meet U.S. oil consumption for 32 days. That number is far below the agency’s previous estimates, which said the shale likely held 13.7 billion barrels of recoverable oil, or enough to meet U.S. oil consumption needs for more than two years.
The EIA did not return ThinkProgress’ request for comment on the error in time for publication. But according to an L.A. Times report, the incorrect 13.7 billion barrel estimate of recoverable oil was issued in 2011 by an independent contractor for the government, which “broadly assumed” that oil from the Monterey Shale formation was as easily recoverable as the other prominent shale oil reserves in the country. Those reserves are the Bakken shale in North Dakota and Eagle Ford shale in Texas, which are estimated to hold approximately 3.6 billion barrels and 3.4 billion barrels of oil, respectively.
While the Bakken and Eagle Ford shale deposits are “relatively even and layered like a cake,” the L.A. Times said, the 1,750-square-mile Monterey Shale has been “folded and shattered” by earthquakes — meaning the oil is lodged too deep to recover with currently available technology.
For some, the EIA’s new estimate confirms what they’ve been saying for years. Shale oil is notoriously hard to extract because it lies within shale rock formations underground, so drillers have been forced to use more controversial, unconventional methods to get it out of the ground.
The most widely used of those methods has been hydraulic fracturing, or “fracking,” a process by which drillers inject high-pressure streams of water, chemicals, and sand into underground rock formations, “fracturing” the rock to release oil and gas. Ironically, that process has also been shown to cause earthquakes, the very problem which makes the Monterey Shale’s oil even more difficult to get at.
For years, the process of fracking and other experimental techniques has been touted as a way to develop the Monterey Shale, which the oil industry had estimated would bring as many as 2.8 million new jobs to California and boost tax revenue by $24.6 billion annually.
But the idea of more fracking hasn’t been sitting well with many Californians. In fact, on Tuesday, the Santa Cruz city council voted 5-0 to prohibit fracking and oil and gas development, becoming the first county in the state to do so. Fracking has also been banned in the city of Los Angeles.
Still, there is no sign that the oil industry will abandon the Monterey Shale, given that oil still lies deep within the ground. Indeed, a spokesman for the Western States Petroleum Association told the L.A. Times that he was confident new technology would be developed to turn things around.
“We have a lot of confidence in the intelligence and skill of our engineers and geologists to find ways to adapt,” he said. “As the technologies change, the production rates could also change dramatically.”
Others, though, say that the new numbers only reinforce the idea that California should be transitioning to more reliable and climate-friendly energy sources that won’t bring false hope to the state’s economy.
“With these new numbers from the EIA, it is clear that the Monterey Shale will not be the panacea that will fuel our cars, jobs or the California economy,” said Seth B. Shonkoff, executive director of Physicians, Scientists & Engineers for Healthy Energy. “It is critical that California turn its attention towards energy sources that will meet our energy demands for the near- and long-term, facilitate the meeting of our climate targets and create real jobs in this State.”