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Vast oil trove trapped in Monterey Shale formation

San Joaquin Valley's Monterey Shale formation may hold 15 billion barrels of oil, but no one has found an affordable way to extract it.

April 06, 2014|By Julie Cart

"This is prime farmland and they have drilled between 200 and 300 wells in the last 10 years in the Monterey Shale," Frantz said. "Every one took out an acre or two of farmland. Every one has used hundreds of thousands of gallons of water. Each one has contributed to our air pollution. Each one has had spills on the ground of different chemicals and crude oil. Each one is emitting methane as we speak.

"If this thing happens and there are thousands and thousands of wells — that's scary because an accident is bound to happen," he said.

All the predictions — both enthusiastic and dire — are predicated on cracking into the stubborn Monterey formation.

David Hughes, a geoscientist at the Santa Rosa-based Post Carbon Institute, studied both the USC report and the federal data and then published his own assessment, which casts a skeptical eye on the rosy assumptions. His conclusion: "It's not going to happen."

Reviewing industry-generated data, Hughes said test wells in the Monterey so far have been expensive and unproductive.

"California oil production peaked in the early '80s," Hughes said. "It's now down to half that. If the Monterey Shale can just maintain California's production level — I would think that's about all it could do."

The uncertainty has kept some of the industry's heavy hitters on the sidelines. And although the big companies are loath to reveal their strategies, Chevron's chief executive has said, "The jury's out on Monterey Shale."

Gabe Garcia, manager of the Bakersfield office of the BLM, which permits drilling on federal land, said no one has yet found enough accessible crude to make extraction profitable. "We've got areas where they've drilled several wells and they are still trying to prove economics to us," Garcia said.

Any technology that succeeds will probably include either hydraulic fracturing — fracking — or acidizing. Fracking is a controversial but long-used technique that sends a high-pressure mixture of water, chemicals and sand into a well bore to explode the "tight" rock formation and free the oil. Acidizing entails shooting a potent mix of highly corrosive chemicals into the formation to dissolve the rock.

Both practices are under review by the state of California and the BLM and are, at the moment, unregulated.

Another aspect of fracking presents a unique challenge in California. The process of reinjecting drilling fluids into the ground is thought by some to stimulate minor seismic activity around drilling pads, dubbed "frackquakes."

Fracking operations in Arkansas, Oklahoma and Pennsylvania have measured this phenomenon, but industry officials vigorously dispute the theory.

The San Andreas fault traces the western outline of the Monterey formation.

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