The Energy Information Administration (EIA) has cut its estimate of recoverable oil in California's Monterey Shale to 600 million bbl, a 96% decrease from previous estimates, an agency spokesman told NGI's Shale Daily Wednesday.
The revised number comes nearly three years after EIA had estimated Lower 48 technically recoverable shale oil resources at 23.9 billion bbl, including 15.4 billion bbl in the Monterey/Santos play, then believed to be the nation's largest shale oil formation (see Shale Daily, July 11, 2011). A year later, in its Annual Energy Outlook 2013 (AEO2013), the agency estimated technically recoverable oil in the Monterey at 13.7 billion bbl (see Shale Daily, July 24, 2012).
But changes to technically recoverable resources (TRR) estimates "do not necessarily have significant implications for projected oil and natural gas production, which are heavily influenced by economic considerations that do not enter into the estimation of TRR," an EIA spokesman told NGI.
"Importantly, projected oil production from the Monterey play is not a material part of the U.S. oil production outlook in either AEO2013 or AEO2014, and was largely unaffected by the change in TRR estimates between the 2013 and 2014 editions of the AEO," Jonathan Cogan said. "EIA estimates U.S. total crude oil production averaged 8.3 million b/d in April 2014.
“In the Annual Energy Outlook 2014 (AEO2014) Reference case, production of economically recoverable oil from the Monterey averaged 57,000 b/d between 2010 and 2040, and in the AEO2013 the same production averaged 14,000 b/d. Clearly, there is not a proportional relationship between TRR and production estimates -- economics matters, and the Monterey play faced significant economic challenges regardless of the TRR estimate."
Estimates of TRR "are highly uncertain," Cogan said.
Key factors driving the lower estimate included new geology information from a U.S. Geological Survey review of the Monterey "and a lack of production growth relative to other shale plays like the Bakken and Eagle Ford."
The TRR estimates and other assumptions in AEO2014 are due to be released by EIA in June.