Study: Fracking May Boost California's Economy, Adding 2.8M Jobs
Development of California's Monterey shale formation can play the major role in the state's future economic well-being, noted a recent study, "Powering California: The Monterey Shale and California's Economic Future", released by the University of Southern California (USC) and Los Angeles-based think tank Communications Institute.
California's Monterey shale is estimated to hold 15 billion barrels of oil and development of the 1,750-square mile formation in central California could generate half a million new jobs by 2015 and 2.5 million jobs by 2020.
"This report provides an indication that there is one potential bright spot in California's economic future: the increased production of energy," the report stated. "California has long served as the incubator for emerging energy sources and technologies, as the state has taken advantage of both technology and its natural resources to become a leader in the generation of renewable energy. Now, these same technological and resource advantages can allow the state to return to leadership in the production of oil."
The Monterey/Santos play, a prolific source rock for many of California's large oil fields, is considered by far the largest shale oil formation in the United States, roughly two-thirds of total oil shale potential. By those numbers, the Monterey reserves trump the Bakken and Eagle Ford fields.
This new onshore oil play can easily pump up the nation's oil output by 25 percent in just a few years and help the state's local energy picture. California has more recoverable reserves in shale than nearby big oil-producing countries, according to a July 2012 report issued by the U.S. Energy Information Administration (EIA).
To tap this prolific shale play, horizontal drilling and hydraulic fracturing would most likely be used, which has riled environmentalists to oppose this widely-used drilling technique. And much pressure has been placed on California's Governor Jerry Brown, a Democrat, but the opposite has occurred.
"We want to get the greenhouse gas emissions down, but we also want to keep our economy going," he said at a March 13 press conference, Reuters reported. "That's the balance that's required. The fossil fuel deposits in California are incredible, the potential is extraordinary. But between now and development lies a lot of questions that need to be answered."
The study forecasts that the state could greatly benefit, about $4.5 billion in oil-related tax revenue in 2015 and $24.6 billion by 2020. California boasts perhaps the largest deep-shale reserves in the world – reserves that, unlike elsewhere, hold the promise for an unprecedented volume of advanced crude oil production, the study noted. California's well-known offshore reserves contain more than 10 billion barrels of oil and nearly 12 trillion cubic feet of natural gas but the onshore play is projected to hold even more oil – more than 15 billion barrels, according to the EIA.
"Gov. Brown is trying to do what he feels is best for California and he realizes that much of the negative publicity was not based on an understanding of the facts," stated Don Clarke, a Los Angeles consulting geologist, in an interview with Rigzone. "We must protect the environment and any Monterey development can only be done with proper consideration to the environment and especially the groundwater."
Development of the oil-shale deposits may boost the state's economic activity by as much as 14.3 percent, the study said. And with that, increasing the state's per-capita gross domestic product (GDP).
"California, whose Monterey Formation alone is estimated to be four times larger than North Dakota's Bakken reserve, has chosen… to sharply limit its fossil-fuel industry. As a result, it has generated barely one-tenth the new fossil-fuel jobs in archrival Texas. Not surprisingly, California … lagged behind in GDP and income growth, while the energy states have for the most part enjoyed the strongest gains," author Joel Kotkin said Dec. 7 in the Daily Beast.
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