The Monterey formation has long been recognized as the primary source of the oil produced from other formations in Southern California; the Monterey itself has been very productive where it is naturally fractured. Since 2011, the possibility that hydraulic fracturing might make the Monterey Shale productive over large areas has gained widespread public attention. According to the US
Energy Information Administration (EIA) in 2011, the Monterey Shale Formation contained more than half of the United States's total estimated technically recoverable shale oil (
tight oil contained in
shale, as distinct from
oil shale) resource, about . In 2012, the EIA revised its recoverable volume downward, to . As of 2013 advances in
hydraulic fracturing commonly called "fracking," and the high price of oil resulted in spirited bidding by oil companies for leases.
Occidental Petroleum and
Venoco were reported to have been major players. The deposit lies below the surface. A widely cited March 2013 study released by the University of Southern California (USC) estimated that if extensive
resource play development of the Monterey through hydraulic fracturing were successful, it could generate as many as 2.8 million jobs and as much as $24.6 billion in state and local taxes. However, observers have pointed out that as of 2012, however large its theoretical potential, no one as yet has succeeded in making the Monterey Shale widely economic through hydraulic fracturing; to date it has been economic only in those limited locations already naturally fractured. Richard Behl, a geology professor who heads the "Monterey And Related Sediments" (MARS) consortium at
California State University Long Beach, said that "The [EIA] numbers probably were overblown, but it was a simple method and had an essence of truth." Compared to other
shale oil plays, the Monterey formation is much thicker and more laterally extensive, but also much more geologically complex and deformed. See the linked photos from a field trip to Monterey outcrops at
Vandenberg Air Force Base. "To say California geology is complex is an understatement. ... The Monterey play is no slam-dunk." J. David Hughes, a Canadian geoscientist and Fellow of
Post Carbon Institute, published a report
Source rock The Monterey Formation is considered the source of 84% of the oil in known fields of the San Joaquin Basin, a total of 12.2 billion barrels of oil. Of this, 112 million barrels of oil in known fields is produced from the Monterey itself. The Monterey formation is the source for such giant oilfields as the
Kern River,
Elk Hills,
Midway-Sunset Oil Field, and probable source for the overlying
North and
South Belridge Oil Fields.
History Monterey Formation oil was discovered at the
Orcutt Oil Field in the Santa Maria Basin of Santa Barbara County in 1901. This was quickly followed by other Monterey discoveries nearby, including the
Cat Canyon Oil Field and
Lompoc Oil Field. Each of these early Monterey discoveries depended on natural fractures in the Monterey. The Monterey Formation is one of the reservoirs in the
Elk Hills Oil Field as well as one of the reservoirs (Belridge Diatomite) of the
Lost Hills Oil Field, both located in
Kern County. Major Monterey production was also discovered in offshore oil fields, such as the
South Ellwood Oil Field in the Santa Barbara Channel, and the Point Arguello Field in the Santa Maria Basin. The North Shafter and Rose oil fields of Kern County, which produce primarily from the Monterey Formation, were discovered in 1983, but attempts to produce the oil have not been highly economic. Some horizontal wells were drilled in the Rose field in the early 2000s, with 2,500-foot lateral lengths and single-stage open-hole fracs; the results were said to be improvements over vertical wells.
Carbon dioxide injection has been tested in the Monterey shale, with mixed results. "The main problem was that the carbon dioxide didn't increase production as much as hoped. ... That could be because the rock formation is so jumbled up, it's hard to find the right spot in which to inject the carbon dioxide." Oil companies such as
Occidental Petroleum are using
acidizing to stimulate production in Monterey wells, and other companies are experimenting with proprietary mixes of
hydrochloric and
hydrofluoric acids. "There's a lot of discussion around the Monterey Shale that it doesn't require fracking, that acidizing will be enough to open up the rock," said Chris Faulkner, chief executive officer of
Breitling Oil and Gas. Opposition and regulation The Monterey Formation underlies the southern half of the
San Joaquin Valley, a prime agricultural region. The possibility of environmental damage has caused some farmers in Kern County to press for close regulation of hydraulic fracturing. Opponents say that hydraulic fracturing poses risks in the seismically active region. The California legislature passed a bill regulating fracking in September 2013. Some environmentalists criticised the bill as being too lax. Some environmentalists promised not to rest until fracking is banned completely. Oil industry representatives criticized the bill as too restrictive. The measure was supported by state Sen. Fran Pavley, author of a fracking bill defeated the previous year. The bill, which Governor
Jerry Brown promised to sign, provided for disclosure of chemical used, pre-testing of nearby water wells, and a study on environmental and safety issues to be completed by January 2015. Given the very limited success with fracking the Monterey to date, some find the controversy "much ado about little." In
Santa Barbara County, Santa Maria Energy LLC (SME) has proposed a total of 136 wells in the Monterey formation that would use
cyclic steam injection to produce
tight oil. In 2013, the county planning commission declined its staff's recommendation to approve the project, calling for more study on concerns raised by environmentalists about greenhouse-gas emissions. The County Board of Supervisors approved the proposed project on November 18, 2013, and SME was cited as a model operator and applicant during the proceedings. == Vertebrate paleofauna ==