This State’s Oil Reserves Just Got Cut By 96%

Todays top stocks to buyA shocking new update by the EIA has dealt a deadly blow to this state’s shale oil revolution…

Once thought to contain some 13.7 billion barrels of recoverable reserves, estimates of California’s Monterey Shale deposits have now been drastically reduced to a drop in the bucket.

Authorities at the US Energy Information Administration (EIA) have downgraded the amount of oil trapped within the subterranean rock to just 600 million barrels — a stunning 96% reduction.

The Monterey Shale comprises around two-thirds of our country’s shale oil reserves — more than the Bakken and Eagle Ford.

With its abundance, it was expected to shoulder much of the nation’s fuel requirements for the decades ahead, allowing us to become energy independent.

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Through the latest available extraction techniques, Californians were anticipating the Monterey to be the next great oil boom — leading to huge job growth and desperately needed tax revenues for the Golden State.

The California government projected the development of the shale would add 14% to its current GDP, create as many as 2.8 million new jobs, and generate some $24.6 billion in taxes annually.

But a few weeks ago, they received a rude awakening.

The EIA determined that the Monterey deposits were not as easily recoverable as initially assumed, compared to those found in shale formations elsewhere in the country.

Unlike the relatively even and nicely layered shale deposits found in North Dakota and Texas, the Monterey shale has been folded and shattered by seismic activity over millions of years, with most of the recoverable oil found in deeper strata.

In other words, even the latest fracking and horizontal drilling technologies are not effective in the formation as a number of recent test wells have come up dry.

“From the information we’ve been able to gather, we’ve not seen evidence that oil extraction in this area is very productive,” said John Staub, a petroleum exploration and production analyst who led the EIA’s latest research. “Our oil production estimates combined with a dearth of knowledge about geological differences among the oil fields led to erroneous predictions and estimates.”

Environmental activists are obviously elated with these new findings. They’ve argued for years that the high level of water consumption required by fracking encroaches on the available water that’s used for residential, agricultural, and other commercial uses. It’s believed that any additional drain on its existing water system could lead to long-term environmental and economic consequences.

That’s why these activists have been directly opposed to Monterey Shale development and have been advocating for a statewide ban on fracking.

But although these latest findings have dealt the oil and gas industry a major blow, some in the industry remain optimistic of the Monterey’s future. It wasn’t long ago that few believed that hydraulic fracturing would be able to unlock the geological riddle in regions like the Bakken/Three Forks, Marcellus, and Eagle Ford. What’s occurred in a few short years in these shale formations could very well happen in the Monterey once new drilling techniques are developed.

“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.

But as the industry waits for new technologies to be unveiled, the Monterey is likely to remain stagnant. It would be prudent to review your holdings of companies exploring the region.

Yours in profits,
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John Holt
for Top Stock Millionaire
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