Register

Peak Oil is You


Donate Bitcoins ;-) or Paypal :-)


Page added on April 4, 2019

Bookmark and Share

California’s Oil Industry Collapses Despite Shale Boom

Production

Not that long ago, California was the second most vital U.S. oil producing state. Since peaking in 1985, however, output has plunged almost 60 percent to 460,000 barrels per day (bpd).  This collapse is made even more discouraging by the fact that total U.S. crude oil production has been soaring to record heights, up 140 percent to 12.1 million bpd over the past decade. Indeed, the shale revolution that has transformed the U.S. oil and gas industry has completely passed California by. Since 2008, while U.S. crude oil reserves have more than doubled to 45 billion barrels, California’s reserves have declined 25 percent to 2.2 billion barrels in the shale-era.

The most troubling part for California is that the state still uses a lot of oil. California each day devours around 40 million gallons of gasoline, uses 8 million gallons of diesel fuel, and accounts for 20 percent of all U.S. jet fuel consumption. Although the state is surely a global leader on renewables, wind and solar are strictly sources of electricity and do not really displace the need for petroleum, a designed transportation fuel. For every passenger vehicle in California today that runs on electricity there are about 70 that run on oil. Even reaching the ambitious goal of 5 million plug-ins by 2030 would mean less than 15 percent of the state’s cars running on electricity.

The inevitable result of plummeting production amid high consumption is that California is forced to import 70 percent of the oil that it needs. With the collapse of Alaska’s production, foreign sources now supply almost 60 percent of California’s crude oil, compared to just 15 percent 20 years ago. Additionally, a Low Carbon Fuel Standard (LCFS) has not just hampered the prospects of using locally sourced oil but also the heavier crude that comes from ally Canada. In contrast, California’s LCFS has supported the lighter, “cleaner” oil that comes from OPEC. Saudi Arabia, for instance, now supplies 37 percent of California’s oil imports, with Ecuador at 14 percent.

Such a turn to distant international suppliers is actually a quiet environmental problem going ignored. These shipments arrive on crude supertankers, giant ships that not just burn loads of oil themselves but are also at greater risk for spills. Unfortunately, California’s leaders have generally stood against building the pipelines necessary to receive high-quality, lower cost shale oil from other U.S. states.

For its own part, California does have the Monterey shale formation in the central and southern part of the state. The play could hold at least 20 billion barrels of recoverable oil and untold amounts of natural gas. Current Governor Gavin Newsom, however, is not supportive of development like his predecessor Jerry Brown was.

Although there are geological issues in the Monterey that make it a difficult play to exploit, many of those differences could be overcome with capital and by deploying the constantly evolving technology that the U.S. shale industry enjoys. The real problem is that California’s regulatory and tax policies discourage new oil production in the state. Namely, hydraulic fracturing for shale in California is burdened with the same restrictive rules that its offshore industry has. In fact, some municipalities and counties have passed outright bans on fracking, and many oil companies have left the state because drilling permits are too difficult to obtain.

California would be well advised to realize how North Dakota has leveraged shale from its Bakken play into an economic boon (see Figure). One study from the Price School of Public Policy at the University of Southern California, for instance, found that the Monterey could add millions of jobs and tens of billions dollars in tax revenues alone.

INSERT TITLE HERE
Source: EIA

But overall, missing out on the shale revolution for California might be worse on the natural gas side. Gas is still the main source of power in the state, even accounting for over half of generation in recent years. California’s need to import 95 percent of its gas supply is a growing problem because other U.S. states, particularly Western neighbors, are increasingly moving toward more gas to meet rising demand while also lowering greenhouse gas emissions.

RIGZONE



73 Comments on "California’s Oil Industry Collapses Despite Shale Boom"

  1. I AM THE MOB on Fri, 5th Apr 2019 9:00 am 

    Davy is getting owned..Like he deserves..Stupid trust fund baby..

  2. Davy on Fri, 5th Apr 2019 9:10 am 

    More like you are increasing irrelevant. Your message has failed MOB. All you have left is name calling and bogus fake news posts. Hang it up.

  3. Davy on Fri, 5th Apr 2019 9:13 am 

    LMFAO, MOB, PEAKOILBUDSPUD IS JUANPEE. BTW, HE THINKS YOU ARE AN IDIOT. THAT IS DOCUMENTED HERE ON THE BOARD. LOL AGAIN

  4. Davy on Fri, 5th Apr 2019 10:15 am 

    WHY DOES EVEYBODY HATE ME?!!!!!!
    I WANT MY MOMMY!!!!!!

  5. Davy on Fri, 5th Apr 2019 10:32 am 

    Obviously JuanP and not Davy

    Davy on Fri, 5th Apr 2019 10:15 am

  6. Davy Wants His Mommy on Fri, 5th Apr 2019 11:15 am 

    Obviously not JuanP.

    Davy on Fri, 5th Apr 2019 10:15 am

  7. Peak Oil Ombudsman on Fri, 5th Apr 2019 1:22 pm 

    Well, looks like the board moderators will have to stop the show again because Davy cannot play by the rules.

    He is given opportunity after opportunity to redeem himself, yet his darkside always wins. For this reason, as the designated Peak Oil Ombudsman, it’s incumbent upon me to aggressively moderate and neuter his naturally reflexive extremism, lies, hypocrisy, and personal vindictiveness.

    Yes, I have a difficult job to perform, but someone must step forward. I shall remain vigilant 24 hours a day, 7 days a week, and 365 days a year. I accepted this position and I refuse to let the readers of this site down.

  8. Davy on Fri, 5th Apr 2019 1:34 pm 

    JuanP you are a lunatic. Most are not here to play. People come here for info. Go play somewhere else, loser.

  9. I AM THE MOB on Fri, 5th Apr 2019 2:27 pm 

    ‘F**k capitalism’: Report shows Democratic Socialists of America are on the rise — in Iowa

    https://www.alternet.org/2019/04/fk-capitalism-report-shows-democratic-socialists-of-america-are-on-the-rise-in-iowa/?utm_source=&utm_medium=email&utm_campaign=39&recip_id=2946&list_id=2

  10. Not JuanP on Fri, 5th Apr 2019 3:05 pm 

    JuanP has not made one single posting in weeks Davy.

    Now tell everyone. Who’s the lunatic?

    loser

  11. I AM THE MOB on Fri, 5th Apr 2019 4:33 pm 

    The World Economy Is A Pyramid Scheme, Steven Chu Says

    The world economy is based on ever-increasing population, said Nobel laureate Steven Chu, a scheme that economists don’t talk about and that governments won’t face, a scheme that makes sustainability impossible and that is likely to eventually fail.

    “The world needs a new model of how to generate a rising standard of living that’s not dependent on a pyramid scheme,” Chu said at the University of Chicago.

    “Increased economic prosperity and all economic models supported by governments and global competitors are based on having more young people, workers, than older people,” Chu said. “Two schemes come to mind. One is the pyramid scheme. The other is the Ponzi scheme. I’m not going to explain them both to you, you can look it up. But it’s based on growth, in various forms.”

    For example, healthy young workers pay the health care costs for aging workers and retirees, the former energy secretary said, a scheme that requires increasing numbers of young workers. And economic growth requires more and more people to buy more and more stuff, with dire environmental consequences.

    There are at least two problems with that:

    “Depending on a pyramid scheme or a Ponzi scheme, there’s no such thing as sustainability,” Chu said.

    As standards of living increase, population growth declines. So if the economy succeeds in raising standards of living, it undermines itself.

    “The economists know this, but they don’t really talk about it in the open, and there’s no real discussion in government,” Chu said. “Every government says you have to have an increase in population, whether you do it through immigrants or the home population. So, this is a problem.”

    https://www.forbes.com/sites/jeffmcmahon/2019/04/05/the-world-economy-is-a-pyramid-scheme-steven-chu-says/#62c0772d4f17

  12. Davy on Fri, 5th Apr 2019 5:02 pm 

    JuanP, is a lunatic and needs to be banned.

  13. Davy on Fri, 5th Apr 2019 5:05 pm 

    MOB, dumbass, one of the articles on this site is what you referenced above. Can you read??

  14. Not JuanP on Fri, 5th Apr 2019 5:10 pm 

    Davy is a lunatic and needs to be banned.

  15. Not JuanP on Fri, 5th Apr 2019 5:12 pm 

    Davy, dumbass. Can you read?

  16. Davy on Fri, 5th Apr 2019 5:29 pm 

    It is funny to see juanPee buddy up with MOB. What a friggin combo that is.

  17. Anonymouse on Fri, 5th Apr 2019 5:39 pm 

    Yea, you AND ‘JuanP’, together at last. What a threesome that is.

    Dumbass.

  18. Davy on Fri, 5th Apr 2019 5:39 pm 

    How come everybody here is buddies with everybody else accept for me, and why’s that real hard for me to figure out. I just don’t get it?

    Call me stupid

  19. Anonymouse on Fri, 5th Apr 2019 6:32 pm 

    Cheer up dumbass, you still have cloggjude. Or did you forget about him?
    He is still, your one, and only friend, period, so yes, technically, you can claim him as a ‘buddy’.

    Dumbass.

  20. Davy on Fri, 5th Apr 2019 6:34 pm 

    Obviously JuanPee and not Davy

    Davy on Fri, 5th Apr 2019 5:39 pm

  21. Davy on Fri, 5th Apr 2019 6:44 pm 

    Old reliable dumbass, anon, does his once a day put down of someone from above. They don’t call him anonymouse for nothing. For years he has not said hardly a word about his life. The most I can remember is he was struggling to be an engineer like 3 years ago. Why, anonymousy, because he is a pussy, he is a worthless piece of shit like his gangbanger JuanPee polluting this board with rancor. JuanPee can’t stop talking about himself so we have a wealth of dirt on his psychopathy. makato will be up soon to defend them, why? Well makato is supported and protected by his boys.

  22. Cloggie on Sat, 6th Apr 2019 12:43 am 

    “Cheer up dumbass, you still have cloggjude.”

    Anonymouse giving african intellectualism a bad name again. I’ve never seen a more titanic blunderer than our sneerbunny and “Great Thinker” from Toronto.

Leave a Reply

Your email address will not be published. Required fields are marked *