California could be the next oil boom state (Los Angeles, San Francisco: 2013, home)

[18Montclair]

Wow.
400 BILLION BARRELS?

California is sitting on a massive amount of shale oil and could become the next oil boom state. But only if the industry can get the stuff out of the ground without upsetting the state's powerful environmental lobby.

Running from Los Angeles to San Francisco, California's Monterey Shale is thought to contain more oil than North Dakota's Bakken and Texas's Eagle Ford -- both scenes of an oil boom that's created thousands of jobs and boosted U.S. oil production to the highest rate in over a decade.

In fact, the Monterey is thought to hold over 400 billion barrels of oil, according to the U.S. Geological Survey. That's nearly half the conventional oil in all of Saudi Arabia.

California could be next oil boom state - Jan. 14, 2013

[ryuns]

One issue will be that the cost of doing business is always going to be higher. Besides a stronger environmental lobby, air pollution controls (many of these are already high pollution areas), planning and permitting, and cap and trade all contribute to a higher cost for extracting fuels in California. This is offset to some degree by the fact that California has no oil severance tax, but I'd expect to see one eventually, as investment in extraction industries continues.

The simple math is that if it costs less to pull oil out of the ground than you can get in the market, you'll make the investment. But oil is a global commodity, and the price changes. In North Dakota, for example, the last number I heard was that it costs about $50 to get a $90 bbl of oil to market, which is a huge profit. But if the costs in California are significantly higher, and the global price of oil not guaranteed, along with dealing with very touchy law-makers and citizens in California, I don't think the case for California oil boom is clear cut.

[cre8lite]

makes you wonder if this will reduce the price of gas in california????

[TrueTimbers]

In a state with groundwater shortages the idea of fracking is utterly insane IMO...

Pollutants linked to

EPA Data Links Groundwater Contamination To Fracking - Business Insider

Fracking Does Contaminate Groundwater: Carry on Drilling Regardless - Forbes

Nearly endless reports on this...

The Hausna valley play has been shot down several times know.... Though property prices have plummeted in the valley...

Utterly insane to frack in right next to the water supply for Santa Maria, and the billion dollar ag industry that depends on uncontaminated water.... Or any other highly populated coastal area

North Dakota, who cares! The population is nothing.... Fracking in the coastal ranges is nuts, stupid and short sighted... IMHO.

No it does not lower your price of gas... Oil is traded on the free market. The global market conditions set the prices.. Of course states can create tax breaks or subsidize the prices to offset this fact..

[EdJS]

Originally Posted by cre8lite

makes you wonder if this will reduce the price of gas in california????

Probably not. Canada has plenty of oil, it doesn't need to import any for its own use (in fact it exports plenty), yet the price of oil (not considering taxes) is the same there as anywhere else.

That's because oil is world commodity, the price is set based on world-wide demand. If temporarily the price were cheaper in California than elsewhere, oil pumpers would sell out of state until the price in California caught up to the rest of the world.

Think about it: In the news, one always hears about "THE" price of oil, never the price of oil in California vs. Canada vs. Texas vs. Europe. There is only one price of oil for the whole world.

Now, there could be more subtle effects. I large new supply of oil could decrease the global price of oil, and of course that would also decrease the price in California. There are also political benefits from having a local supply of oil.

[.highnlite]

Originally Posted by cre8lite

makes you wonder if this will reduce the price of gas in california????

It pays to remember that America's number one export in terms of dollars is, refined gasoline. There is no shortage, the oil companies are making bank by shipping our gasoline overseas.

I cannot imagine a greater nightmare than turning the Coast Range into an oil dump. You folks that approve, drive high way 33 between Maricopa and Coalinga. What a mess. And that is all on ground that was ugly before the drilling started.

[DMenscha]

Originally Posted by .highnlite

drive high way 33 between Maricopa and Coalinga. What a mess. And that is all on ground that was ugly before the drilling started.

LOL, you got that right. Just heading toward Avenal from I-5 makes you wonder how any landscape could be made less pleasing to the eye.

[ryuns]

Originally Posted by TrueTimbers

In a state with groundwater shortages the idea of fracking is utterly insane IMO...

Pollutants linked to

EPA Data Links Groundwater Contamination To Fracking - Business Insider

Fracking Does Contaminate Groundwater: Carry on Drilling Regardless - Forbes

Nearly endless reports on this...

The Hausna valley play has been shot down several times know.... Though property prices have plummeted in the valley...

Utterly insane to frack in right next to the water supply for Santa Maria, and the billion dollar ag industry that depends on uncontaminated water.... Or any other highly populated coastal area

North Dakota, who cares! The population is nothing.... Fracking in the coastal ranges is nuts, stupid and short sighted... IMHO.

No it does not lower your price of gas... Oil is traded on the free market. The global market conditions set the prices.. Of course states can create tax breaks or subsidize the prices to offset this fact..

I agree in theory, but the argument about fracking may not apply to California. From the article:

"But the folds [in the rock] mean recent advancements that have made shale oil and gas profitable to extract -- horizontal drilling combined with hydraulic fracturing -- don't work as well in California. It's hard to drill horizontally if the shale is not flat.

Plus, it appears the Monterey is made up of shale rock that doesn't respond as well to hydraulic fracturing -- the controversial practice known as fracking that involves injecting water, sand and chemicals into the ground under high pressure to crack the rock and allow the oil and gas to flow.
....
Occidental (OXY, Fortune 500), which is California-based and has long held acres in the Monterey, has had some success using a technology known as deep acid injection, said IHS's Trammel.
The process involves injecting hydrofluoric or other acids deep underground, where they eat away at the shale rock and allow the oil to flow. It's cheaper than fracking, said Trammel. And while it sounds ominous, it may not be as controversial, as the volumes involved are far less and it's not done under such pressure, he said."

[DMenscha]

Hydrofluoric acid - Wikipedia, the free encyclopedia

Oh yeah, I really think that's so much better than the other stuff they put in the ground.

[Senno]

Originally Posted by .highnlite

It pays to remember that America's number one export in terms of dollars is, refined gasoline. There is no shortage, the oil companies are making bank by shipping our gasoline overseas.

I cannot imagine a greater nightmare than turning the Coast Range into an oil dump. You folks that approve, drive high way 33 between Maricopa and Coalinga. What a mess. And that is all on ground that was ugly before the drilling started.

Came home that way once from Pismo as a kid as dad wanted to see the coutryside. Kinda enjoyed the artwork on the oil wells, broke up the scenery a bit. I don't actually know if those wells are still in production or just rusting away now.

That's a lot of east side central valley farmland also to potentially be fracked on. Wondering about what the big ag farmers would think out there.