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Republicans: California Regulations Block State Shale Oil Boom

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Reuters

WASHINGTON, April 4 (Reuters) - Republican lawmakers said on Friday over regulation has prevented a shale oil boom in California and if eased, could boost production in the state and reduce its dependence on foreign energy.

With more than an estimated 15 billion barrels of oil, according to the U.S. Energy Information Administration, California's Monterey shale formation is twice as large as North Dakota's Bakken formation. That state has risen to become the second-largest U.S. oil producer in recent years, behind Texas.

California had the third-largest U.S. oil output in 2013, narrowly ahead of Alaska, but could produce far more if the state aggressively moved to develop its energy resources, lawmakers said at a House Natural Resources committee hearing.

"The challenge now is not our ability to find it, it's the ability of government allowing us to be able to produce it in a sound way," said Republican Kevin McCarthy, who represents California's oil-producing Kern county.

Mostly cut off from the rest of the country's oil production, California relies on countries such as Iraq and Saudi Arabia to meet more than half of its crude oil needs.

State regulators are working to update oversight of hydraulic fracturing, or fracking, the drilling technique that has helped to spur the U.S. shale oil and gas boom.

Uncertainty surrounding future energy policies and lengthy permitting processes have pushed energy companies away from California, Jean Fuller, a California state senator, told lawmakers.

Critics of fracking, have blamed the practice for water contamination and have raised concerns that increased drilling has polluted the air.

Fracking involves injecting water, sand and chemicals underground at high pressures to extract oil and gas.

California Democrats at the hearing pushed back against claims that the state's stringent environmental rules have harmed the state.

"In California we try to balance ... extraction of resources with the health of our communities and our ecosystems, and we are not going to change that model," said Democrat Alan Lowenthal, whose district includes parts of Los Angeles and Orange counties.

While companies may find the state's regulations burdensome, there is no law blocking them from developing the Monterey shale formation, Lowenthal said.

California Governor Jerry Brown, a Democrat, has said he supports more leasing for shale development if it can be done in a safe manner.

(Reporting by Ayesha Rascoe, editing by Ros Krasny and Sofina Mirza-Reid)

Copyright 2014 Thomson Reuters. Click for Restrictions.

WHAT DO YOU THINK?

Post a Comment Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
Deborah Dirk-Halley | Apr. 4, 2014
Unless the state of California State Legislatures and the Environmental Groups allow the exploration of Shale Oil safely, the result will be a sound NO! The state of California would rather depend on Corporations and Businesses to support the tax load for the rest of the population that would put California a third world state that would eventually rely on the Federal Government to bail out the states money problems.



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