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3:56 am
Wed December 12, 2012

Is California Up Next For An Oil And Gas Boom?

Originally published on Wed December 12, 2012 4:05 am

Transcript

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It's MORNING EDITION from NPR News. Good morning. I'm David Greene.

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And I'm Renee Montagne.

Here in California later today, the Bureau of Land Management will be auctioning off 18,000 acres of oil leases. To some, this sale is a sign that the state's next in line for an oil and gas boom. California has one of the largest deposits of shale oil in the country. And it's attracting new attention because of the drilling technique known as hydraulic fracturing, or fracking. Lauren Sommer of member station KQED reports.

LAUREN SOMMER, BYLINE: Southern Monterey County is California wine country. Vineyards stretch for 40 miles along the highway here, about two hours south of the Bay Area. But it's not exactly Napa Valley.

KURT GOLLNICK: I wouldn't say we do a high volume of foot traffic.

SOMMER: Kurt Gollnick is walking through a field of Chardonnay at Scheid Vineyards, one of the wineries here. This area grows more Chardonnay than Napa does, he says. What it lacks is the name recognition that Napa has and the visitors that follow.

GOLLNICK: This is something that we're trying to change now. We do have very scenic areas of Monterey County.

SOMMER: But lately, more than what's on the ground, people are talking about what's under the ground: oil and plenty of it. Some of the oil leases up for auction this week aren't far from this vineyard.

GOLLNICK: Very deep under the land here is the Monterey formation, which is shale that has oil reserves in it.

SOMMER: That oil is notoriously tough to extract, because it's locked inside the shale rock. Recently, though, oil companies have gotten a lot better at getting oil out of shale. They inject millions of gallons of water, mixed with sand and chemicals, underground. That cracks the shale rock, letting the oil out.

DON GAUTIER: Right now, I think there's a bit of a gold rush mentality concerning shale oil.

SOMMER: Don Gautier is a geologist with the U.S. Geological Survey. He says fracking is nothing new in California. It's been used for decades.

GAUTIER: What is new right now is that the price of oil is reasonably high. This technology has become very sophisticated. So these explorationists are justifiably optimistic about the idea of being able to get out oil that couldn't have been accessed just a few decades ago.

SOMMER: California's shale oil resource is huge - an estimated 15 billion barrels in the Monterey formation. That's bigger than North Dakota's oil reserve, where recently there's been a drilling boom.

KASSIE SIEGEL: There is absolutely a danger of California being transformed almost overnight.

SOMMER: Kassie Siegel is a lawyer with the nonprofit Center for Biological Diversity.

SIEGEL: In other parts of the country, we've seen contaminated water. We've seen people who live near oil and gas wells complaining of health effects.

SOMMER: Whether that's specifically caused by fracking is under debate in many places, but Siegel says it's enough to be concerned, which takes us back to Monterey County. Her group is suing the Bureau of Land Management over the oil lease sales, saying the agency has failed to review the risks of new fracking techniques.

SIEGEL: They are acting as if nothing has changed in the oil and gas industry, but of course everything has changed.

RICK COOPER: The red that you see on the map there is the federal mineral estate.

SOMMER: The Bureau of Land Management's Rick Cooper says the government is offering these leases because of interest from oil companies. But his office is predicting minor environmental impacts, because it doesn't foresee much new drilling.

COOPER: We haven't seen the development signals as of yet. But if we begin to see increased development, it would be at that time that we would pull back and say, well, we probably are going to have to do more analysis.

TUPPER HULL: Certainly our members are exploring how effective hydraulic fracturing is going to be in California.

SOMMER: Tupper Hull is with the Western States Petroleum Association, an industry group for oil and gas companies. He says fracking could boost the state's oil production, which has been declining for two decades.

HULL: If hydraulic fracturing proves to be as successful here as it's been elsewhere, it's an extraordinarily optimistic future we're looking at from an energy point of view.

SOMMER: Hull says there are a few things left to figure out. California's geology is challenging for large-scale fracking. The shale layers are messy, bent by seismic forces. Those forces are also a concern when it comes to disposing of fracking wastewater underground, which can increase the risk of earthquakes.

For NPR News, I'm Lauren Sommer in Monterey County. Transcript provided by NPR, Copyright NPR.

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