Monday, January 6, 2014

'Fracking' the Monterey Shale -- boon or boondoggle?

Extracting oil and gas from the California formation could bring the state economic prosperity — or it could be an environmental disaster.

 

"Eureka!" reads the California motto, originated in the 19th century Gold Rush. Now some believe the state is on the cusp of a 21st century bonanza, only this time it will be oil that fuels a Golden State boom.

Modern prospectors are eyeing the Monterey Shale formation, a 1,750-square-mile resource-rich swath of land in the San Joaquin Valley. Lying deep beneath the valley's surface is a trove of shale oil — some 15.42 billion barrels' worth, according to an estimate by the U.S. Energy Information Administration.

If that proves true, the Monterey formation holds the equivalent of 64% of America's total shale oil reserves. A recent study by USC predicts that a Monterey Shale boom could add $4.5 billion in tax revenue to state coffers and 2.8 million California jobs by 2020, and would turn the state into the nation's leading oil producer.

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