Updates
December 24, 2012: priceless --
the BLM auction for tracts in Monterey County brought ... drum roll ... $10/acre.
California needs a crude awakening -- Tom Gray, senior editor at
Investor's Business Daily, writes on California economy and politics.
Later, 9:09 pm: what one hand giveth, the other taketh away. In this case, the BLM offers to lease 18,000 acres of the Monterey Shale (inland, of course), but
the president will remove a large off-shore tract from oil exploration forever. And that's fine. Life goes on. "We" don't want too much competition for the Bakken. A huge "thank you" to a reader for sending the link: there must be a lot of ads or something at the link; it took quite awhile for the link to download -- though my wi-fi connection is somewhat slow tonight.
Original Post
Link to this story, a
Bloomberg story, sent by a reader.
California, even as it seeks to be the greenest U.S. state, stands a good chance
of emerging as the nation’s top oil producer in the next decade, helping
America toward what once seemed an unlikely goal of energy
independence.
The catalyst is the U.S. Bureau of Land
Management’s sale last week of 15 leases covering about 18,000 acres of
the Monterey Shale, a geologic formation whose sweet spots stretch from
east of San Francisco more than 200 miles south to Monterey County. The
auction was dominated by Los Angeles-based Occidental Petroleum Corp.
and smaller companies betting on a coming boom. Yesterday California
regulators issued a draft of new rules to sharpen their oversight of the
surge in fracking.
While shale developments have been most associated with natural gas, the
ribbed-shaped Monterey could hold 15.4 billion barrels of oil,
according to the federal Energy Information Administration. That amounts
to 64 percent of all estimated U.S. shale oil reserves and double the
combined reserves of North Dakota’s Bakken Shale and Texas’ Eagle Ford
Shale, where energy companies are spending billions to ramp up output.
With regard to fracking:
In August, the Center for Biological Diversity notified the Bureau of
Land Management by letter, as required by federal law, that it intends
to sue under the federal Endangered Species act to stop further lease
sales unless BLM agrees to consult with federal wildlife managers on
potential fracking impacts.
But the BLM disagrees:
BLM, in a letter to the Center in October, said consultation isn’t
necessary because fracking has been “occurring under existing
regulations on public lands in California for decades” and impacts to
endangered species “are lower in California than in other areas of the
country.”
A form of fracking has been used in California for 60
years with no allegations of fouled water or environmental harm, said
Tupper Hull, spokesman for the Western States Petroleum Association, an
industry trade group.
A few comments:
- with regard to "reserves," industry estimates for the Bakken suggest 24 billion barrels, significantly more than the reserves of the Monterey as stated above; so we shall see
- if anyone has followed the Bakken and OXY USA for any length of time, it is clear that some operators have not cracked the code on completing/fracking a well
- there is a link to the Monterey at the sidebar on the right which includes a more sobering view of the Monterey
- Chevron's recent decision to move 800 of its employees from its headquarters in northern California to Houston, after its recent refinery fire
- the tea leaves regarding fracking are shifting
- note again how gracious the BLM was in opening the Monterey shale to leasing: 18,000 acres. We've seen a lot of this in this administration: a big announcement but as others have said, "all hat, no cattle." For newbies: compare with CLR's one million net acres in the Bakken, and CLR is just one operator. Even KOG, one of the smaller operators in the Bakken, has >150,000 net acres in the Bakken
