Shale Daily / NGI All News Access

California Fracking Draws Boost from Governor, Study

As a formal set of proposed rules on hydraulic fracturing (fracking) moves through preliminary public review in California, Gov. Jerry Brown last Wednesday expressed confidence that his state's oil and gas regulators would apply "science and common sense" to frack regulations.

A day after Brown made his remarks at a joint appearance with outgoing U.S. Interior Secretary Ken Salazar, a study released by the University of Southern California (USC) and a Los Angeles-based think tank projected nearly three million new jobs from development of California's 1,750-square-mile Monterey Shale formation. The study was partially funded by the Western States Petroleum Association.

In a joint appearance with Salazar to hype renewable energy development on federal lands, Brown went off script in answering a question on fracking from news media in attendance. Brown left no doubt he strongly favors addressing global climate change issues, but he also praised California's wealth of fossil fuel resources.

"I support our Division of Oil, Gas [and Geothermal Resources]. They have the expertise and I look to them to navigate the issues [on fracking] as we move forward," Brown said. "The fossil fuel deposits in California are incredible, the potential is extraordinary, but between now and development requires a lot of questions to be answered, and I feel confident the people are in place in my administration to handle the issues as they come up. The [issues] will be decided based on science, common sense and on the process in place. This is one of the great opportunities we have in the state."

In the meantime, the new study concludes that oil development in the Monterey Shale formation could play a major role in the state's future well-being, fostering up to 500,000 new jobs by 2015 and up to 2.8 million jobs by 2020. "The Monterey Shale and California's Economic Future" was cosponsored by the USC Viterbi School of Engineering, Global Energy Network and the Price School of Public Policy, along with the Communications Institute.

In a footnoted qualifier, however, the report's editors said available data for the study were "limited," and thus the current report represents only a preliminary overview of the economic impact that development of the Monterey Shale could have on California.

The report said that within California's borders is a resource, "largely untapped," that could not only satisfy the state's energy needs for decades, but "also could help to ignite an economic revival that, almost single-handedly, could return the state's economy to vigor and health."

The researchers stressed that they were not making any policy or regulatory recommendations regarding the development of the Monterey Shale. Instead, they study was answering in the affirmative that the shale formation carried important potential economic benefits.

"For the most part, oil locked within the Monterey Shale can be efficiently developed only with advanced oil extraction technologies, including fracking and horizontal drilling," according to the report. While the technologies may be new to many people, they have been well proven in "numerous fields" to be effective in energy production, the researchers said, though they acknowledged that some of the technologies, such as fracking, may carry environmental risks that need to be addressed.

Even in a state where crude oil production has fallen by 47% in a recent 25-year span (1985-2010), the report concluded that one of California's "bright spots" is increased energy production. The state has taken advantage of "both technology and its natural resources" to be 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," according to the report.

Comments powered by Disqus