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United States Earth Power

US Officials Cut Estimate of Recoverable Monterey Shale Oil By 96% 411

Posted by samzenpus
from the I-drink-your-tiny-milkshake dept.
First time accepted submitter steam_cannon (1881500) writes "The U.S. Energy Information Administration (EIA.gov) is planning to release a major 96% reserve downgrade to the amount of oil and gas recoverable from the Monterey Shale formation, one of the largest oil/gas reserves in the United States. After several years of intensified exploration the Monterey oil shale play seems to have much less recoverable oil and gas then previously hoped. This is due to multiple factors such as the more complex rippled geology of the shale and over-hyped recovery estimates by investors. By official estimates the Monterey Shale formation makes up 2/3 of the shale reserves in the US and by some estimates 1/3 of all crude reserves in the US. Not a drop in the bucket. Next Month the EIA.gov will be announcing cutting it's estimates for Monterey by 96%. That's a huge blow to the US energy portfolio, trillions of dollars, oil and gas the US might have used for itself or exported. Presently the White House is evaluating making changes to US oil export restrictions so this downgrade may result in changes to US energy policy. As well as have a significant impact on US economy and the economy of California."
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US Officials Cut Estimate of Recoverable Monterey Shale Oil By 96%

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  • Keystone XL (Score:3, Insightful)

    by Prune (557140) on Thursday May 22, 2014 @03:10AM (#47063583)
    I wonder if this might change the Obama administration's calculus and their continued delays on the proposed pipeline.
    • Why, XL pipeline does nothing for the USA. That's oil headed to China.
    • by jamstar7 (694492)

      I wonder if this might change the Obama administration's calculus and their continued delays on the proposed pipeline.

      Keystone XL won't do a damned thing for the taxpayer at the gas pump. It's designed to take the dirtiest most corrosive form of oil from American-leased fields in Canada to refineries in Texas so they can be shipped overseas for more profit. If they REALLY wanted to use the oil in the US, they wouldn't be piping it to Texas. They'd be piping it to refineries in the north.

  • Who the heck (Score:3, Informative)

    by Herbster (641217) on Thursday May 22, 2014 @03:20AM (#47063609)
    Proofread this horrendous summary? Have a little chat with yourself.
    • Re: (Score:3, Interesting)

      by phantomfive (622387)
      The important point is, they are cutting the estimate by 96% of recoverable oil. The oil is there, but not recoverable as easily as in Texas or North Dakota. It's been push deeper by heavy seismic activity in the area.
      • Re:Who the heck (Score:4, Informative)

        by phantomfive (622387) on Thursday May 22, 2014 @03:45AM (#47063695) Journal

        The important point is, they are cutting the estimate by 96% of recoverable oil.

        Wow, it says that right in the title. I guess headlines are too much trouble for me tonight.

      • "A spokesman for the oil industry expressed optimism that new techniques will eventually open up the Monterey formation."

        Well he's right. Fracking technology is moving along at a good clip. I'm sure these unrecoverable reserves will soon become recoverable.
    • Maybe the submitter just displays complex/rippled grammar, spelling, and punctuation.

    • Proofread this horrendous summary?

      Have a little chat with yourself.

      What I do is read past the mistakes and be thankful that I know what they're trying to say. That's the only thing left man has over the machines, and you want the Slashdot editors to take even advantage away?!
      Talk about kicking an ape when he's down.

  • by SuricouRaven (1897204) on Thursday May 22, 2014 @03:27AM (#47063637)

    I predict that before a week has passed, someone will be claiming Obama personally rigged the study as part of a deliberate attempt to sabotage the oil industry.

    • Before a week ? Before the sun has set, you mean...
      • by deroby (568773)

        Scary but true; from my current point of view it's already in the next comment !?!!!

        (http://news.slashdot.org/comments.pl?sid=5187683&cid=47063651)

  • One more incentive to the US to turn towards renewable energy sources. The USA are lagging way behind western and northern European countries in that respect. Last week e.g. the Dutch railways announced that from next year on, 100% of their operations will run on electric power from renewable sources, mainly wind, bought from a total of 5 north west European countries ( DE, DK, BE, NO, NL ).
    • by necro81 (917438)

      Dutch railways announced that from next year on, 100% of their operations will run on electric power from renewable sources, mainly wind

      This makes me wonder: if enough heavy industries sign on to using wind power, they can become a flexible load to balance the variable supply of wind? For instance, if Dutch railways has 10,000 cars moving around, and the output of wind drops by X%, could they slow their cars down by Y% to help compensate? Inversely, if there's a sudden surge in wind, could they speed th

  • Wait.. (Score:4, Insightful)

    by pablo_max (626328) on Thursday May 22, 2014 @03:39AM (#47063671)

    Does this mean that we will need to find some other means of energy rather than burning dead dinosaurs? God forbid.

    While this may impact the future economic situation to some degree and CA, it is not like the oil had been extracted and then taken away. The money was never there, it was only the assumption of future money.
    I would also point out that the vast majority CA residents are strongly opposed to shale extraction off the coast of CA.

    • Haven't you noticed, in modern Economics real money and assumption of future money are exactly the same!
      • by pla (258480)
        Haven't you noticed, in modern Economics real money and assumption of future money are exactly the same!

        Only under two assumptions - Investing at the risk-free rate of return, or losing ground against inflation.

        In any other scenario, yes, you can compare the future value of two similar risk investments, but failing to factor in different levels of risk commits a grievous error that will leave you begging in the street while your boring neighbor's inflation+1% diversified bond portfolio has him retiring
    • Does this mean that we will need to find some other means of energy rather than burning dead dinosaurs? God forbid.

      Yes, nuclear. Let us know when you're ready.

  • by anubi (640541) on Thursday May 22, 2014 @03:44AM (#47063689) Journal
    First, I will say I have worked for a major oil company.

    Second, I will say I have read "Twilight in the Desert" by Matthew Simmons, was an ardent follower of The Oil Drum [theoildrum.com] petroleum web site - was more active there than I am here.. That site was full of petroleum engineers and field guys - and I trusted their insight far more than I trust words from any investment advisor sitting behind desk whose job it is to influence my decisions of how to allocate my retirement savings.

    And Third, I will say I swallowed the "Peak Oil" paradigm hook line and sinker. Apparently messed up my retirement savings big time by investing in the energy sector as I believed with all my heart that we were in serious decline.

    Suddenly fracking made the scene and all the investment buyers saw energy as plentiful again. And the price dropped, And many of the smaller guys sold out.

    I cannot help but wonder if all this panic talk is them yet rounding up another round of panicky people and investors to make a poor investment.

    I can't help but remember all this talk about how dire our energy situation was coming from our leaders. Then there is no energy crisis, Then there is.

    Almost sounds like Donovan singing about petroleum. First there is a crisis, then there is no crisis, then there is.

    We pay countless taxes into our government, and countless well-paid bureaucrats are supposed to be leading us, but does anyone up there really know what's going on?

    So far, they seem to rank about as reliable as an ouija board.

    How in the hell can anyone make rational decisions when no-one seems to take this stuff seriously? It seems lately all our government has wanted to so is snoop. 96% is a helluva big number.

    I believe special interest tie guys have the government release all these "facts" in order to manipulate the market.

    When I saw fracking, I was and still am concerned that was equivalent to "blowing the gas cap" on a dying oil well as once we relieved the subterranean pressure that was helping to push what was left of the liquid oil to the surface, we were draining the last "fart" from the earth before there was no longer enough energy recoverable from the lift effort than we were able to recover from the oil lifted. It meant the show was over.

    I remain very concerned this whole fracking "happy days are here again" thing has been nothing more than a ploy to get control of the remaining oil reserves at a bargain basement price.
    • by Bob_Who (926234)
      A very insightful post. Thanks for your candor and honesty. Its not often we grow to change our perspective so that we can get to the truth even at the expense of being right. Nobody is perfect, we all have a past, but I believe you now.
    • by drinkypoo (153816)

      Suddenly fracking made the scene and all the investment buyers saw energy as plentiful again. And the price dropped, And many of the smaller guys sold out.

      I cannot help but wonder if all this panic talk is them yet rounding up another round of panicky people and investors to make a poor investment.

      Sigh. You're underthinking this. Predictable, in someone caught out by them already. They're not just looking for new idiots, they're also looking for new laws. Fracking is bad, mmkay? They wouldn't have been allowed to do it without a peak oil scare.

    • by AmiMoJo (196126) *

      Suddenly fracking made the scene and all the investment buyers saw energy as plentiful again. And the price dropped, And many of the smaller guys sold out.

      I cannot help but wonder if all this panic talk is them yet rounding up another round of panicky people and investors to make a poor investment.

      So an unpredictable change happened, a new energy source was discovered and changed things. At this stage we don't know how long it will last exactly, and of course there is no way to predict if any other new sources will come along in the future. In any case this new wonder fuel isn't so wonderful really, so it is bit premature to call the long term trend.

      In other words you can't really draw any conclusions, other than that you were unlucky but may yet recover.

    • You make some good points here.

      Fracked shale gas will not remain cheap. It will stay that way until a certain level of global dependency is reached. At that point, supply flow increases will slow or stop, and wild price fluctuations will ensue, with a steady rise in average price over time.

      There is plenty of oil and gas supply, yet look at the prices they can demand due to the dependency of the transportation sector. That's how our whole energy sector will eventually look.
    • by K. S. Kyosuke (729550) on Thursday May 22, 2014 @08:47AM (#47064851)

      And Third, I will say I swallowed the "Peak Oil" paradigm hook line and sinker. Apparently messed up my retirement savings big time by investing in the energy sector as I believed with all my heart that we were in serious decline.

      Distinguishing local and global maxima of functions may be difficult, but in itself it does not negate the existence of global maxima of functions as such. We started oil production at one point in time, where the immediate production was zero. At one point in time in the future, it will be zero again, even if we manage to pump everything there is, simply because it's a finite amount of it. So that's zeros in two points with non-zeros in between. My math skills may be rusty, but I vaguely recall that a such a continuous function necessarily has a global maximum. That's not a "peak oil paradigm", that's basic logic. The fact that you mistook a local maximum for a global one is irrelevant.

  • I'm not a native speaker and I still often make mistakes in English, but I cannot understand how people can mix those up : then/than, your/you're, its/it's, there/their/they're.
    http://theoatmeal.com/comics/m... [theoatmeal.com]

    • Re:Then/Than (Score:5, Insightful)

      by Anonymous Coward on Thursday May 22, 2014 @04:02AM (#47063765)

      It's because the majority of Americans don't really get taught proper English in school any more, and they pretty much ignore what teaching they do get. But they still get to pass classes and graduate, because it would hurt their feelings to do otherwise.

      I used to work at an outfit where the majority of my co-workers were immigrants, as well as a large proportion of our customers. The worst at English spelling and grammar in both groups by far were the people born and raised in the U.S. I never really knew whether to laugh at that or be depressed by it.

      • by rrohbeck (944847)

        Mod parent up. Same here - the immigrants' English is better than the natives'. Oh and math and Science too.

      • by MightyYar (622222)

        It's not education, it's simply that native speakers learn to speak before they learn to write. If there is an educational fault, it might be the introduction of "phonics" and the idea that actual spelling is secondary. And there may be some truth to that... if spelling were so important, then how does the world survive with both the American, British, and other variations of English?

    • by Sockatume (732728)

      I think it's easier for a native speaker to make these sorts of mistakes, particularly if they're not prone to writing. If you learn a language principally by sound, the distinction between "then" and "than" can start to look like a variation on the same word; it's not like English isn't polluted with words with two very different meanings depending on the context.

      Of course, comprehensibility in any language comes, in part, from being able to anticipate what structure is being built just as it's being built

    • by Megane (129182)
      The thing is, it's only been in the past five years or so that I've noticed then/than being a problem at all, like it came out of nowhere. For a long time, the one that annoyed me the most was lose/loose. That one is still around, but it seems less common lately. And your/its/there have always been a problem.
    • Because 'your' and 'you're' are pronounced identically, as are the there-their-they're triplet. If you're writing as you speak, it's a very easy mistake.

  • Amen. (Score:4, Interesting)

    by korbulon (2792438) on Thursday May 22, 2014 @05:16AM (#47063981)

    The potential ecological disasters created by such a massive shale extraction operation just ain't worth it. Monterey is surrounded by one of the most beautiful and ecologically diverse coastlines in the world, and they want to jeopardise it to get some short-term, supporting an industry wihich is basicallty like America's crack dealer, and every year seems to report record profits. Wat?

    It's the 21st century and we're still having these sorts of conversations about oil? Christ almighty, find another source of energy already, or consider slgihtly changing your behavior. If for nothing else, do it for the children.

  • by Bob_Who (926234) <Bob@@@who...net> on Thursday May 22, 2014 @05:18AM (#47063987) Homepage Journal
    Some of the most beautiful coastline on earth stretches from Santa Cruz to San Luis Obispo County. The waters are a National Marine Sanctuary. The Monterey Peninsula, Carmel, Pebble Beach, Big Sur are some of the most appealing destinations in California. The Los Padres National Forest extends into miles and miles of virgin wilderness from Ventana through the Santa Lucia and Coastal Range. The collision of the Pacific and Continental plates creates solid granite mountains rising up out of the pounding surf. East of the spectacular coastline is Steinbeck Country - the Salinas Valley, the salad bowl of America some of the most prosperous farmland on planet earth. It finds its water from the Salinas River which is the longest underground river on earth, as spring water percolates up from the range.

    The idea of fracking here just makes me wanna stop driving. I can't believe this project has been moving forward all of this time with FALSE DATA from the lying scumbag pigs that want money from resources no matter what the long term cost to the planet. This terrain is the result of tectonics for billions of years, and all some folks can appreciate is that the fault line makes it easier to dig, and the bay makes it easier to transport. In a thousand years there will be nothing worth remembering about this era except for the beauty that was spared from human destruction. Every one of us will be dead in a century, why is that momentary presence so arrogant as to exploit everything possible just because we can.

    Life will go on without sucking the Monterey Shale out of the ground so that some people get rich selling old technology to the "free" market. Somehow, I'm sure they can just move along to some renewable energy to sell when the fast easy bucks dry up. Good thing we found out it is already dry here, before they poisoned the golden goose.
  • Mistakes in article? (Score:3, Interesting)

    by Anonymous Coward on Thursday May 22, 2014 @05:35AM (#47064019)

    Maybe I'm confused, but there seem to be a couple of problems in the article, regarding distance and location. One paragraph says, "The problem lies with the geology of the Monterey Shale, a 1,750-mile formation running down the center of California roughly from Sacramento to the Los Angeles basin and including some coastal regions."

    In the article's map, the northernmost formation point is south of San Francisco, way south of Sacramento. And even if the Monterey Shale went all the way up to Sacramento, it's still way less than 1,750 miles from Sacramento to LA.

    Also, according to http://oilshalegas.com/montereyshale.html, Monterey Shale is just that one large section that's about 1/4 the length of California. Monterey Shale doesn't include the smaller costal regions.

    I'm not trying to be critical, but if the article has mistakes regarding distance and location, I wonder if it might also have a mistake regarding volume of oil.

  • Bubble, bubble... (Score:5, Insightful)

    by Savage-Rabbit (308260) on Thursday May 22, 2014 @06:10AM (#47064135)

    Perhaps this is a sign that the rumoured Shale bubble is beginning to burst.

    • by Rei (128717)

      Only a tiny percent of US shale production is on the Monterrey Shale. And the very reason for this downgrade was that they were using recovery figures determined from the other shale plays, when the actual recovery rate from the Monterrey Shale is much lower than them due to its highly faulted geology and will take new technology to be recoverable at current prices.

      Which you'd have known had you actually read the articles.

  • by nimbius (983462) on Thursday May 22, 2014 @06:21AM (#47064175) Homepage
    Peak US oil production begat a rampant speculative market, which in turn sends our oil and gas prices soaring and crashing on a yearly basis. This is always quietly dismissed as seasonal demand so as to coddle speculators and assuage the fears of our politicians. Sustained high crude prices and a rapidly diminishing prospect of respectable foreign policy with regard to the oil market during the Bush administration led many oil and gas producers and their lobbyists to declare a diamond in the rough. This shale oil and gas to be captured through fractionation came at a time when to deem it suspect was nihilistic and we all tacitly agreed it must be true for sake of our own collective future. As our war machine contracted and our focus returned somewhat toward domestic policies and act of sustainability it of course became increasingly difficult to ignore what during the past 8 years was a boon of blank checks and exemptions from the federal government to be applied toward the shale moneytrain. Halliburton certainly wouldnt be the first to fess up, and nor should they as theyd worked hard to secure by hook and by crook some of the most lucrative and reprehensible federal exemptions and contracts in recent history. Shale is good, shale is great.

    No. Like an alcoholic stumbling from a hot malt liquor hangover into the nearest gas station we scrambled to find anything to take the hurt away. That we like the rest of the world would have to firm up our collective constitutions and make seriously warranted changes was simply too much. We crawled back into shale oils warm cockle and clutched our crossover SUV for one more year. We looked to the tar sands and their beleaguered machination of destruction and waste as no more than a fine bourbon whiskey we partook of on occasion. Science, like a distant cousin with the bail money for the last bender, is shuffling us along into the rather unpleasant sunlight once again with heavy heart and a morose sigh. We either change or we die, because at this point Science will have existed as much with us as it has without us.
  • by WarpedMind (151632) on Thursday May 22, 2014 @07:09AM (#47064327)

    Wonder how much more of a tax break the oil companies will get because of this. My understanding is that they get a write-off as they deplete a reserve. It is sort of like a capital depreciation. I wonder if the reserve estimate will change that calculation resulting in larger tax breaks since they will have a depleted their asset at a faster rate than previously expected.

  • Dear Oil Company, I have a bunch of batteries. And sunshine. And a thing that makes a light bulb go on. Piss off .
  • by LynnwoodRooster (966895) on Thursday May 22, 2014 @08:18AM (#47064683) Journal

    By official estimates the Monterey Shale formation makes up 2/3 of the shale reserves in the US and by some estimates 1/3 of all crude reserves in the US

    What about the Green River shale formation which is estimated to have 3 TRILLION barrels of oil? I don't get how that 13.7 billion barrels originally estimated in the Monterey formation comprised 2/3rds of the shale reserves, when we have a 3 TRILLION barrel reserve. By my count, it's around 1/3rd of 1 percent.

    • by AndrewBuck (1120597) on Thursday May 22, 2014 @09:25AM (#47065159)

      The green river shale is a different kind of thing. The monterray and Bakken shale formations contain actual oil, the Green River formation contains kerogen -- a waxy substance that will turn into oil if you heat it to several hundred degrees for a period of years (yes years).

      The best analogy I have heard to put this into perspective is that the Bakken is something like a rock that has been left soaking in a bucket of oil for a while and the oil has seeped into the pores of the rock. The green river shale is more like a brick that has had candle wax dripped on it. Both contain energy which can be extracted, but one yields oil directly whereas the other is merely a feedstock to make oil.

      The last I had heard, no one has ever made a commercially successfull attempt to convert kerogen into oil. It can be done, just not anything like economically, and the environmental costs of doing so would be massive. Now of course the "free market" folks will say, "well the price will just rise until the kerogen is extractable", and they are right, the price will rise to something like 1000 dollars per barrel, and then we will have lots of that "cheap" green river shale oil available on the market, something like 3 trillion barrels worth.

      -AndrewBuck

      • This is why there is a fight right now about the proposed pipeline from The Basin to Salt Lake to transport the waxy crude. [sltrib.com]

        The pipeline has to be heated to keep the "oil" from congealing:
        "Uinta’s black wax crude must remain above 95 degrees and yellow wax above 115 degrees or it’s liable to congeal."

        The proposed pipeline would cross several of the watersheds where those that live along the Wasatch Front get their drinking water.

        So the question is, what is more important, a stable supp
        • Although I largely agree with the sentiment you are expressing, there is a similar confusion here as well. I read through the article you linked and what they are talking about transporting is normal crude that has a high paraffin wax compnonent in it. This too, though, is different from the kerogen bearing rocks in the green river shale. There are a couple clues throughout the article that this is what they are talking about, but the most telling is this blurb from the last paragraph...

          "For better or wo

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