Stephen T. Holzer
February 8, 2013
Here comes the boom.
If someone told you that California could become the next Texas in terms of oil production, how would you react?
Do you envision barren tracts of land featuring nothing but the mechanical bob of pump jacks? Or do you picture thriving cities and an end to the state budget crisis?
It's these conflicting images that may very well spark the next great political wars, as the oil and gas industries face off with environmental watch groups over what's known as hydraulic fracturing, or fracking. The likely battleground is Monterey Shale – a stretch of rock formation lying between Los Angeles and San Francisco, which potentially holds 15.4 billion barrels of oil, according to the United States Energy Information Administration.
That's a lot of crude – adding about two thirds more to the national oil reserve, in fact.
For the environmentalists, drilling is bad enough.
But fracking means injecting fluid, sand and chemicals to open up cracks in the shale, which allow more natural resources to flow into oil and gas wells.
The oil and gas industries have been fracking in California for decades, but a recent boom in technology now allows companies to drill horizontally, targeting very specific areas for the injection technique. With less guesswork involved, speculators are moving in. The environmentalists are on heightened watch.
State and national green groups claim hydraulic fracturing may pose risks to ground water, air quality and seismic stability, citing problems in Pennsylvania where fracking for natural gas has caused some concern.
Earthjustice, representing four environmental plaintiffs, filed a suit in October against the California Department of Conservation Division of Oil, Gas and Geothermal Resources (DOGGR) for insufficient evaluation of fracking risks. The Center for Biological Diversity filed another complaint against DOGGR in January, claiming the Department issued permits for fracking-related oil and gas well operations without tracking, monitoring or supervising the high-risk practice.
However, a recent study by Plains Exploration & Production Co., owner of the Inglewood oil field, found that hydraulic fracturing of two test wells here in Los Angeles posed no threats to either groundwater or air quality, and did not induce seismic activity.
Expect Fracking Complications
As the environmentalists demand oversight to deal with land, water and air safety, oil and gas companies will fight back.
One of the issues they're already voicing is that of trade secret protection. The industry seems to be willing to disclose the identity and nature of the chemicals used in fracking to a certain point – but not enough to risk the years of investment they've made to perfect their new technology. It will be interesting to watch how all of this plays out in California courts over the coming year.
In the meantime though, here comes the boom: The Monterey Shale's liquid assets are already helping California's economy. Speculating oil companies are already moving in, bidding more than a thousand dollars an acre in some land auctions, according to the New York Times. Fracking advocates agree this is the very thing we need to bolster our red-ink economy.