The U.S. Energy Information Administration (EIA) cut its estimate of technically recoverable oil from California’s Monterey shale from 13.7 billion barrels to 600 million barrels, a 96 percent decrease.
The original estimate released in a 2011 by Intek, a Virginia–based engineering company, was very broad, providing a first shot at an estimate for this play and assuming the deposits were easily recoverable. With more data and the industry’s difficulty in producing, the Monterey does not appear to be as strong a play, thus estimates were dropped.
Technically recoverable reserves often change over time as new drilling techniques develop and the price of oil fluctuates. Horizontal drilling and hydraulic fracturing were two technologies that greatly expanded the amount of recoverable gas in the Bakken and Marcellus. However, hydraulic fracturing has not produced the same results for the geology of the Monterey shale.
The Monterey Formation covers more than 1,700 square miles in central California. It has been said to hold more than two-thirds of the nation’s shale gas oil reserves.
Donald Clarke, a California geologist, has indicated that the chemical complexity and the structural deformation and resulting fracturing of the Monterey further adds to the complication of extracting the natural resources at this time. Monterey shale has been folded and shattered by seismic activity, and oil is found at deeper strata. With additional data, research and technology, modeling should help guide industry to the sweet spots.
The EIA’s report on the downgrade in estimates is expected to be released in June.