Peak Oil? Not a Bakken Story, But It Is An Oil Story

Forget the politics of this story. Just look at the numbers.

This city in southern California (within the Los Angeles metropolitan area) wants to drill for oil under 1,280 acres of land.

1,280 acres of land? That's two sections. That's one (1) spacing unit in the Parshall. Or one (1) spacing unit in the Sanish.

From this one spacing unit, the city of Whittier, California, estimates it could get anywhere from $7 million to $70 million per year in oil royalties.

How many wells are we talking about in this one spacing unit?

The Matrix project would include as many as 52 wells, pipelines and truck-loading facilities on land that had been set aside for sensitive species. Most drilling and pumping equipment would be placed in soundproof underground vaults, some of them less than 1,000 feet from homes and an elementary school for children with special needs.

"Our goal," said Matrix Vice President Mike McCaskey, "is to return the field to its level of production in 1991 — about 1,000 barrels a day — which could be achieved with a handful of wells. But if we are wildly successful, and the price of oil stays higher, we could see numbers as high as $70 million per year for the city."

At $1,000/day, at $70/barrel, we're talking about $25 million at the wellhead per year. 

52 wells in one spacing unit. 52 wells on one 1280-acre tract of land in the middle of Los Angeles County. "A handful of wells." His hands must be bigger than Allstate's.

Did I misread the article?

With regard to "...and an elementary school for children with special needs": in my role as a substitute public school teacher, I can tell you that special needs students and their parents have more to worry about than oil wells.