Estimated US Shale Oil Reserves Slashed by 96%!

A few years ago everybody figured the US was in deep doo-doo because we were running out of oil. Then somebody figured out how to get the oil out of shale, and all of a sudden everything turned around and we became one of the world's biggest oil producing countries.

Yep, with vast amounts of shale just ready for the oil to be squished and sucked out of it, the US quickly rose almost to the top of the 21st Century oil world. And the biggest reserve of shale oil we have, with about two-thirds of the nation's shale oil reserves, is the Monterey Shale formation in California. What an enormous bonanza! It would reduce the nation's need for foreign oil imports to practically zero through the use of the latest in extraction techniques, including acid treatments, horizontal drilling and fracking. The estimates were based on the amount of recoverable oil everybody expected, and those estimates were made back in 2011 by an independent firm under contract with the government, that broadly assumed the deposits in the Monterey Shale formation were as easily recoverable, just like those that had been found in shale formations elsewhere.

Well, now we have a little problem. There's a new analysis just out from the Energy Information Administration based, in part, on a review of the output from wells where the new techniques were used. "From the information we've been able to gather, we've not seen evidence that oil extraction in this area is very productive using techniques like fracking," said John Staub, a petroleum exploration and production analyst who led the energy agency's research. "Our oil production estimates combined with a dearth of knowledge about geological differences among the oil fields led to erroneous predictions and estimates," Staub said. 

So, federal energy authorities have slashed by 96% the estimated amount of recoverable oil from the Monterey Shale deposits. Yep, that 96% figure is correct, deflating Monterey's potential as a national "black gold mine" of petroleum down to about 600 million barrels of oil that can be extracted with existing technology. That is way below the 13.7 billion barrels once thought recoverable from the jumbled layers of subterranean rock spread across much of Central California. 

The new estimate, expected to be released publicly next month, is a blow to the nation's oil future and to projections that an oil boom would bring as many as 2.8 million new jobs to California and boost tax revenue by $24.6 billion annually. Oh well, I guess we're back in deep doo-doo again.