Is The Next Western Oil Boom on the Horizon?
California’s Gold Rush may have ended well over a century and a half ago, but there are new prospectors in town and these suits aren’t toting tattered tents and rusty old pans. Instead the new Golden State pioneers employ geologists and lease expensive extraction equipment. Yet, in many ways it is still the Wild West out here in the land of sun and sea, and many are hoping to strike it rich.
Fracking, or the act of blasting a mix of water, sand and chemicals underground to force oil or natural gas to the surface, is sweeping the Golden State. Currently fracking operations are taking place in nine California counties and many are worried it’s just the beginning. While opposition to fracking in Wyoming, Ohio, New York and Pennsylvania gains momentum, critics of the process in California are just now gearing up for what looks like a long fight ahead—a battle certain to be fraught with industry lies, flawed science and old-fashion fossil-fueled greed.
Opponents argue that uncontrolled fracking emits large amounts of methane and other air pollutants and undermines efforts to head off catastrophic climate change. They also cite numerous instances across the country where groundwater supplies have been contaminated by nearby fracking operations. Additionally, in a place like California where water wars are already intense, fracking could accelerate the crisis—for example, a single horizontal well can use more than 5 million gallons per frack.
At the heart of fracking’s potential future in California is the illustrious Monterey Shale formation, which covers 1,750 square miles from Central to Southern California and holds an estimated 15.4 billion barrels of oil. Unlike many other states where independent operators and drillers dominate the landscape, it’s major oil companies like Occidental Petroleum and Venoco that have operated in California for decades. Yet most of these oilmen have played it safe, opting to not explore the vast deposits of the Monterey Shale because of its limited access and complex geology. Nevertheless, advancements in fracking technology are changing all of that, and fast.
Oil production in the state has been declining for years, yet California is still one of the top oil producers in the country, fourth overall, trailing only Texas, North Dakota and Alaska. If fracking can take off in California as it has in North Dakota recently, the state could experience an oil surge that could make the Golden State the largest oil producer in the US, almost immediately.
“If nothing is done, large parts of our state could be transformed into industrialized oil and gas zones … as we’ve seen in other places like Pennsylvania and North Dakota,” says Kassie Siegel, a lawyer for the feisty Center for Biological Diversity (CBD). “Fracking the 15 billion barrels of oil in the Monterey shale is like lighting the fuse on a carbon bomb that would shatter California’s efforts to address the climate crisis. Given California’s leadership in addressing climate change, if we can’t stop a fracking boom in California, it’s difficult to see how we get our nation off of fossil fuels.”
First on the chopping block are public lands managed by the Bureau of Land Management (BLM). Prices have skyrocketed within the Monterey Shale formation in the last few years, in some cases the BLM is scoring $2,000 an acre for parcels that used to go for a mere 2 bucks. No doubt the companies leasing up the land are betting on a frack-friendly future, where once untouchable oil reserves soon will be within easy reach.
On April 8, CBD and others won a major legal victory in California that could impact federal land leases across the country where fracking is involved. In response to a lawsuit the groups filed in 2011 against the BLM, a federal judge ruled the Obama administration violated the National Environmental Policy Act when it auctioned off 2,700 acres of land to oil speculators in Monterey County. The judge said the BLM relied on outdated studies that ignored the potentially damaging effects of fracking in the area. It was the first time a federal court acknowledged that fracking could cause environmental damage.
While there are a a myriad of environmental issues facing California, fracking is the most important among them argues Siegel.
“There is absolutely a danger of California being transformed almost overnight, as other areas of the country have been when the fracking boom hits,” says Siegal. “In other parts of the country, we’ve seen contaminated water. We’ve seen people who live near oil and gas wells complaining of health effects.”
Siegal and others are hoping Gov. Jerry Brown and state officials in Sacramento don’t cave to industry demands, mainly hiding behind trade secrets so they do not have to disclose the chemicals they use when fracking.
Gov. Brown’s first effort to tackle fracking was considered meager at best. In December 2012 the Brown administration put forth a tepid proposal that would require fracking operators to disclose their plans to the state 10 days before ramping their operations. These companies would have to post the list of chemicals used to the online database “FracFocus” along with the locations they plan to frack. Since FracFocus is not subject to public record laws, companies may claim “trade secrets” exemptions to withhold the names of the chemicals used in their fracking.
“The road we’re headed down will heap a cloak of secrecy around trade secrets,” says Bill Allayaud of the Environmental Working Group.
Several California state lawmakers also voiced doubts about Brown’s proposal to regulate fracking, saying it didn’t go nearly far enough to protect public health and safety. Brown’s timid attempt to govern fracking also left the regulatory efforts of the practice to the industry itself.
Brown’s logic, however, is transparent: less oversight means more tax revenue and job creation. Or at least that appears to be the myth he’s ascribing to.
“We want to get the greenhouse gas emissions down, but we also want to keep our economy going. That’s that balance that’s required,” Brown told a group of reporters at a recent “clean energy” event. “The fossil fuel deposits in California are incredible, the potential is extraordinary.”
A new study appears to back up Brown’s insistence that fracking in California would be good for business and the state’s depleted bank account. The report, released by USC and the Communications Institute, titled “The Monterey Shale and California’s Economic Future,” estimates that fracking could generate half a million new jobs by 2015 and 2.8
Critics of fracking in California are concerned with impacts on local waterways, especially in coastal areas such as those in Monterey County million by 2020 in California. The media quickly latched on and so did the industry group that funded it —the Western States Petroleum Association, a fossil fuel lobby shop based in the state capital of Sacramento.
“Clearly, the Monterey Shale is a game-changing economic opportunity that California can’t afford to ignore,” WSPA asserts in a press release. “This opportunity is especially important to the communities in the San Joaquin Valley that have experienced extremely high unemployment and economic challenges for far too long. The great San Joaquin Valley will be the primary beneficiary of the jobs, wealth and government revenues that will flow from the Monterey Shale. It’s their time to flourish.”
The Los Angeles Times was also quick to point out that the “study forecasts that the state could reap oil-related tax revenue of $4.5 billion in 2015 and $24.6 billion by 2020.”
No doubt the oil industry got their money’s worth. The study is now consistently cited for the “fact” that fracking the Monterey Shale would be a boon for the economy as well as a huge job creator. However, anti-frackers aren’t backing down.
“[If] you read the study itself, the authors admit that the data they had wasn’t good enough to make any reliable projections, that their assumptions were extremely optimistic, and that the assessment is only ‘preliminary’,” counters Siegal of CBD. “The study ignores environmental damages and ignores the impacts to other industries like agriculture and tourism that employ far more people in California … It’s a cost-benefit analysis that has no reliable information on the benefits and ignores all of the costs. In the body of the report, the authors admit that their findings have little or no policy value for all these reasons.”
What all of this means is clear: California is in the throes of a fight for its economic and environmental future. Fracking opponents aren’t buying the industry’s job creation arguments. They also believe a further degraded environment will only destroy the precious lands that make California a unique, vibrant state.
The new oil barons, on the other hand, are preparing for a fracking frenzy, likely to be rubber stamped by complicit politicians and a complacent media.
Joshua Frank, Managing Editor of CounterPunch, is the author of Left Out! How Liberals Helped Reelect George W. Bush, and along with Jeffrey St. Clair, the editor of Red State Rebels: Tales of Grassroots Resistance in the Heartland, and of Hopeless: Barack Obama and the Politics of Illusion, published by AK Press. Hopeless is now available in Kindle format. He can be reached at email@example.com.