The U.S. Energy Information Administration has cut Monterey Shale oil and gas estimates by 96%. Environmentalists are happy as this means there will probably be very little fracking in California. However, projected billions in revenue and millions of new jobs will never happen.
The federal agency that keeps track of the nation’s energy reserves estimates that current fracking methods could extract only 600 million barrels of oil from the formation — a far cry from the 13.7 billion barrels once thought to be recoverable.
The original hugely wrong estimate was based on the assumption that Monterey Shale oil would be as easy to recover as in shale formations elsewhere. The problem is the Monterey Shale has been folded and shattered by earthquakes and is quite unlike the cake layers in other shale formations. Thus, it is much more difficult to get out.
Oil companies are working on ways to extract from the Monterey Shale and admit it is a technological challenge.