California Oil and Gas Report

By Dennis Luna, J.D., P.E.

California’s huge and largely untapped Monterey shale oil field gives the state the potential to become a much larger producer and exporter of oil and gas, creating up to $1 trillion in new business and social benefits, and restoring the state government’s fiscal health.

That’s the conclusion of Mark P. Mills, in a column published in the January 16, 2013, issue of the Wall Street Journal.

Mills is a senior fellow at the Manhattan Institute, an economic think tank. He is also founder and CEO of the Digital Power Group, an energy- and technology-focused investment advisory firm, and he writes the Energy Intelligence column for Forbes.

The Monterey shale field, which extends 200 miles from Bakersfield into central California, contains “Saudi Arabia-scale oil resources,” Mills wrote in the Journal column. Newer techniques including horizontal drilling and hydraulic fracturing make recovery of that resource both possible and environmentally clean. Continue reading →

By Dennis Luna

DOGGR, the Division of Oil, Gas, and Geothermal Resources of California’s Department of Conservation, on December 18th released a “discussion draft” of regulations for hydraulic fracturing, or “fracking”.

The discussion draft does not actually start the formal rulemaking process. It is intended to be a starting point for discussion by key stakeholders – industry, the environmental community, the general public and other regulatory officials. All this is in preparation for the formal process, which probably will begin in early 2013.

The “discussion draft” regulations include provisions for testing of wells before fracking begins; advance notification of planned fracking activity; monitoring of wells during and after fracking operations; disclosure of the materials used in fracking fluids; storage and handling of hydraulic fracturing fluids; and ways to balance the public’s desire for information with industry’s need to protect trade secrets.

Information about the process is on the DOGGR Home Page.  The agency also has a page of information about hydraulic fracturing in California.

Documents issued by DOGGR to accompany the announcement include:

• The text of the “discussion draft” of proposed regulations
• Background information about development of the “discussion draft” of regulations
• Frequently asked questions

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Oil and gas production in the US is on track to surpass that of Saudi Arabia by 2020, making America virually self-reliant, according to the International Energy Agency.

As reported in Bloomberg Business Week, the U.S. is already meeting 83% of its energy needs, and within a decade could become a net energy exporter.

“The IEA outlook feeds into the idea of a shift in the center of influence in the world oil market,” BNP Paribas analyst Gareth Lewis-Davies told the magazine.