California’s Monterey Shale formation may yield 600 million barrels of oil, a small fraction of the 13.7 billion barrels formerly estimated, according to news reports linked to the U.S. Energy Information Administration.

The Los Angeles Times and other publications said Wednesday, May 21st, that the agency will release revised estimates next month, reducing the expected output by 96%.The federal agency’s estimate confirms the caution many in the energy industry have expressed about the potential for recovery from the highly folded layers of rock in the California shale play. The complex geologic formations, resulting from seismic activity, are a challenge to horizontal drilling technology.

The Monterey Shale holds about two-third’s of America’s shale oil reserves. If its oil was as recoverable as that held in shale plays in Texas and North Dakota, the Monterey Shale was projected to produce a boom in the energy industry in California, along with 2.8 million new jobs and billions in tax revenues.

An industry spokesperson told The Times that the new federal estimate may be overly pessimistic. “We have a lot of confidence in the intelligence and skill of our engineers and geologists to find ways to adapt,” said Tupper Hull, spokesman for the Western States Petroleum Association. “As the technologies change, the production rates could also change dramatically.”