The Native Americans who lived in California thousands of years ago observed that the ground naturally seeped petroleum, which they used in thickened form for everything from canoe building to chewing gum. It took until the 19th century for oil drilling to begin, and in 1892 the first gusher erupted near Ventura. That kicked off a series of booms as oilfields were discovered around Los Angeles, the Central Valley, and offshore. Output peaked in 1985, though California still ranks third among the states in oil production.
With the easiest oil gone—oil that flowed from its source rock and pooled in underground reservoirs, waiting to be sucked out like a Slurpee—the big questions are how much remains and whether it can be reached. The U.S. Energy Information Administration (EIA) tried to answer those questions in a 2011 report examining the Lower 48’s shale resources. When it came to oil, the leader by a landslide was the Monterey Shale, a checkerboard of discrete basins that stretches from Southern California’s Orange County to the Eel River watershed north of Ukiah. EIA put the Monterey’s recoverable potential at 15.4 billion barrels, more than four times that of the next most promising formation, North Dakota’s Bakken Shale. The agency later lowered its estimate to 13.7 billion.
The report came out as fracking, ramping up nationwide, triggered North Dakota’s current oil boom and Pennsylvania’s natural gas rush. But drilling horizontally across the Monterey might prove trickier, because its rock strata have been jumbled over the eons by seismic activity. “On the East Coast, if we look at the geology, it’s akin to a layer cake,” says Jayni Foley Hein, executive director of the Center for Law, Energy & the Environment at the University of California, Berkeley. “In the Monterey Shale, it’s more akin to a marble cake.”
For all the logistical challenges, the sheer amount of anticipated oil makes the Monterey too tempting for the energy industry to leave alone. “I think you could see, if the technological barriers are overcome, a significant replacement of imported oil with domestically produced oil,” says Tupper Hull, vice president of the Western States Petroleum Association. A University of Southern California study, funded by Hull’s organization, projected that, if EIA’s estimates are correct, drilling could create 2.8 million jobs in California and bring in $24.6 billion in state and local taxes during the peak year of 2020.
But the government’s projection has been disputed. In December, two organizations critical of fracking—the Post Carbon Institute and the Physicians Scientists & Engineers for Healthy Energy—released an analysis by veteran Canadian geoscientist J. David Hughes that concluded the EIA numbers are significantly overstated. That cast doubt on the rosy jobs forecast in the USC study. Other industry-friendly studies have predicted smaller job gains too.
Susan Christopherson, an economic geographer at Cornell University, says the prosperity brought by oil and gas extraction often proves temporary. “It’s an industrial process,” she says. “It drives out other activities like tourism or farming. Once the boom-bust cycle is over and the drillers leave, those counties often have fewer people and less diverse economies than when they started.”