It’s America’s final frontier for shale. And the payout will be huge.
If you add up the recoverable resource estimate for the oft-mentioned Bakken formation in North Dakota, as well as the Eagle Ford in South Texas… then DOUBLE it, you’ll get close to the number of recoverable barrels of oil that remain trapped in the heart of this untapped “mega” shale deposit.
Put another way, according to the US Energy Information Administration, this one massive shale play represents 64% of the total recoverable shale oil resource base in the country.
It’s the big kahuna, and today we’ll take a look at how the profit opportunities are stacking up for this behemoth…
But first, let’s tackle what I’d consider the most important question when it comes to any resource investment: why now?
Sure, we’ve always known California has oil. Starting early in the 20th century, black gold was flowing up and down the West Coast — propelling business and riches alike.
Of course, like most of the other conventional deposits in the US, output has slowly but surely declined.
Today, though, the shale revolution is turning those declining deposits around. From Texas to North Dakota and even towards the East Coast, shale oil and gas are changing America’s energy future. Natural gas is plentiful and oil is coming to the surface, more each day.
That is, except for one untapped shale deposit — what I call the big kahuna — California’s Monterey shale.
Unlike other shale turn-around stories California’s energy output has continued on a downward path. Once a 1.1 million barrel per day (Mbpd) state, California is now producing just half of that — around 500,000 bpd. But when operators in that area finally crack the code, you can bet production will rocket higher.
The best analogy is what we saw recently in Texas.
Once the code was cracked and companies found a way to produce shale oil and make money, total production for the state skyrocketed. Today, Texas is well on its way to eclipsing the mid-80s production level above 2.4 Mbpd. Take a look:
Put in perspective, California’s Monterey is truly a sleeping dragon.
The sheer size of this deposit is staggering. In shale terms, the Monterey formation could hold as many as 400 billion barrels of oil. Of that 400 billion, over 15 billion barrels are considered recoverable with today’s technology. That trumps the recoverable estimates from the Bakken and Eagle Ford — by a factor of 2.
Getting back to the eye-popping statistics above, that represents a whopping 64% of America’s recoverable oil shale reserves. And the way I see it, it’s only a matter of time before this behemoth is spitting out profit opportunities.
That brings us to the other bit of timeliness to this story.
If we were talking about any state other than California (or maybe New York) this energy turnaround story would already be under way. Indeed, the Monterey would be a “household” shale player — with hundreds of rigs spinning as we speak.
But alas, this is California. The political and environmental red tape in the state have brought energy development to a virtual halt.
Of course, if that were the end of the story I wouldn’t be writing to you today.
Instead, the way I see it, there’s big change on the horizon. Soon, I believe California’s shale will be open for business…
What’s the one thing that shale-producing states have in common?
Well for starters, governments like Texas, North Dakota and Pennsylvania have enjoyed a boost to tax revenues via shale production. Along with that, unemployment rates are lower than the US average and energy prices are affordable.
Currently California finds itself on the opposite end of this spectrum — a huge budget deficit, high unemployment and expensive energy. As the days pass and deficits increase, pressure mounts to tap this hidden revenue stream.
Another factor at play here is time. Each passing day with, safe, reliable, affordable, US shale production ramping up, there’s more reason for California lawmakers and politicians to look towards shale production as a potential savior for out of control government budgets.
One recent example of this is New York State. New York was the first state to quickly ban shale development. But recently legislation is gaining steam to allow shale production. Indeed, if New York goes the way of shale, the road may be paved for California.
I believe today we’re at the tipping point. Two months ago, California Governor Jerry Brown released draft regulations that could speed up shale development in the state. Along with that, also in December, the US Bureau of Land Management auctioned off a handful of leases in the state.
The writing is on the wall for a ramp-up of California’s Monterey shale.
There are two key factors to keep an eye on here — permits and production.
First, we’ll want to keep an eye on the permit process out west. If sweeping changes open up the permit process — allowing for a massive increase in permit approvals — it’s only a matter of time before the major players skyrocket (California’s usual cast of characters include: Chevron, Shell, Exxon, Occidental and Venoco.)
A change in tone from the political side could fuel this permit turnaround, and the impending shale boom. Is the incumbent Gov. Jerry Brown the pioneer for the job? We’ll see.
However, there is one other force that could boost permitting.
In a similar way that more permits can lead to more production, production can lead to permits. What I’m looking for here is a “code crack” for the Monterey shale. For instance, if an operator in the area can “crack” the Monterey code, and start drastically increasing the production per well, we could see a turnaround for the whole state.
This is similar to what happened in North Dakota, Texas and Pennsylvania. Quietly, but quickly, the shale-code was cracked and production per well started jumping off the charts. The immediate effect was a drastic increase in tax revenue for the state. In the case of ND, TX and PA the states welcomed the bump in tax revenue with open arms and accommodating regulation — meaning plentiful permits.
If permits and production perk up, watch out. The shale boom on the West Coast could come fast. Keep your ear to the ground on this one.
Matt Insleyfor The Daily Reckoning
I’m going to countdown three of 2010’s biggest resource stories – not to reminisce about profitable investments from the year gone by, but to highlight what I believe will be very profitable investments in the year ahead…No. 3: The Continuing Gold Rush The gold price soared nearly 30% last year – punctuating a spectacular decade-long […]
The Managing Editor of the Daily Resource Hunter, Matt is the Agora Financial in-house specialist on commodities and natural resources. He holds a degree from the University of Maryland with a double major in Business and Environmental Economics. Although always familiar with the financial markets, his main area of expertise stems from his background in the Agricultural and Natural Resources (AGNR) department. Over the past years he's stayed well ahead of the curve with forward thinking ideas in both resource stocks and hard commodities. Insley's commentary has been featured by MarketWatch.
Wow! Jean Giraudoux’s Madwoman of Chaillot to the tee; oil under Paris…. wikipedia plot summary covers it. I was hoping to read it again after 40 years. I guess copyright precludes.
In this relation, the entire planet is abound with dormant
recoverable shale crude just a matter of feet down.
It seems easily tapped but not otherwise. It seems
shy to meet the sun but its cousin has not proven so.
Reliablity of the cracking formula may not have matured
out of experience.
After decades of exhaustive endeavor, it may be worthwhile
to call it a day and embarking on higher viability.
Years ago a 50%-sane self-proclaimed scientist suggested
that if you lay a giant copper coil just above outer atmosphere
and when the earth rotates you will get endless streaming
electricity. Though mad, but it may be equally rewarding.
Also, exploring uranium on the moon may bear more fruit than
California is Bankrupt! This would bail them out…. The environmental wackos are about to be thrown under the bus! Money is the real green… liberal politicians crave!
Pingback: plantacja lawendy
Pingback: kfz versicherungsvergleich
Pingback: nutritional boosts
Pingback: stromanbieter vergleich
Pingback: autoversicherung vergleich
Pingback: european roulette free
Pingback: revision surgery shoulder
Pingback: Facebook Like Button
Pingback: locate people
Pingback: white pages lookup
Pingback: Samsung Galaxy S3
Pingback: empower network
Pingback: Merle Dixon
Pingback: click here to watch
Pingback: red baron slot machine free download
Pingback: Build Mobile Apps
Pingback: Waterwoods EC Cobroke Comm
Pingback: mlpTue3Htx mlpTue3Htx
Pingback: KOg4ihYmn6 KOg4ihYmn6
Pingback: Payday Loans
Pingback: escort bayan izmir
Pingback: izmir escort
Pingback: Uctun Orospu Çocugu
Pingback: Facebook Golgesiz Bilisim
Pingback: visite o site
Pingback: Izmir Escort
Pingback: How to get your boyfriend back - advice to attract an ex
Pingback: contact us
Pingback: Niacinamide cream
Pingback: Nazilli Belediye Baskan Adayları
Pingback: dr. paul drago
Pingback: david lutes gestalt
Pingback: izmir bayan escort
Pingback: two poor teachers complaints
Pingback: click here
Pingback: norwalk village dental center
Pingback: Dating Tester
Pingback: upfront reputations
Pingback: Nazilli Chp Belediye Başkan Adayı
Pingback: Nazilli Akp Belediye Başkan Adayları
Pingback: Nazilli MHP Belediye Başkan Adayları
Pingback: รับทำ SEO ราคาถูก
Pingback: Free xbox live gold codes and microsoft Points
Pingback: rap beats for sale
Pingback: Natural pain relief
Pingback: NaziLLi MHP Belediye Başkan Adayı
Pingback: izmir escort eda
Pingback: TRY OUR BUSINESS BUILDER $1
Pingback: Ecksofa Hudson III Semianilin-Leder Schwarz Rechts Farbe Schwarz bestellen
Pingback: Highster mobile review
Pingback: pirater un compte facebook
Pingback: bail bonds costa covina
Pingback: lon rosen clients
Pingback: hcgdiet direct
Pingback: plus size underwear
Pingback: sell my car fort lauderdale
Pingback: Decorative Wall Plates
Pingback: Getting Your Ex Boyfriend Back - (Don't Panic)
Pingback: london reiki healing
Pingback: Playa del carmen gay friendly hotels
Pingback: World Map
Pingback: izmir anaokulları rehberi
Pingback: Nazilli Belediye Seçim Anketi
Pingback: office cleaners
Pingback: SSD for mac
Pingback: click to read more
Pingback: daycare in charlotte nc useful reference
Pingback: busy olsztyn holandia
Pingback: Best Cellulite Treatment
Pingback: i need a pet sitter
Pingback: potty training tips
Pingback: Reparar electrodomésticos
Pingback: iherb.com coupon
Pingback: yeni seo taktikleri
Pingback: Urlaub buchen
Pingback: izmir web seo
Pingback: Data Center
Pingback: en hizli seo
Pingback: Niacinamide Serum
Pingback: temperature date logger
Pingback: dallas texas online pay day loeans
Pingback: Maklerzentrum vergleich versicherung
Pingback: Customer service numbers
Pingback: spiritual warfare prayer warriors
Pingback: Compounding Pharmacy Panama City
Pingback: Edmonton Limo
Pingback: Emergency Roofers
Pingback: Treadmill Shop
Pingback: with ford
Pingback: garcinia cambogia reviews
Pingback: e genstar
Pingback: Unlock iPhone Switzerland
Pingback: Asuransi jiwa
Pingback: dota 2 cheats
Pingback: Driving Instructors Dublin
Pingback: Find Out More
Pingback: Manufacturing Business For Sale Cheap Franchises
Pingback: stream movies online for free
Pingback: mobile monitoring
Pingback: google adsense
Pingback: FSBO Dallas, TX
Pingback: Boston, MA For Sale By Owner
Pingback: silicone spatula
Pingback: baptistika rouxa
Pingback: PANDORA JEWELRY
Pingback: space romance
Pingback: 800 point microsoft
Pingback: anthony angiuli
Pingback: mclaren auto
Pingback: code promo trafic
Pingback: Cheats for Poptropica
Pingback: Looking for a Reiki course?
Pingback: try this website
Pingback: Pulau Pari
Pingback: new sci fi books
Pingback: MyCAA Eligibility
Pingback: Jabong discount coupon
Pingback: hipnosis sevilla
Pingback: read more
Pingback: osteopath ryde
Pingback: list rental property
Pingback: Jordan Shely
Pingback: Feeder Matrix Top Recruiter
Pingback: organic mattress bay area
Pingback: more quotes
Pingback: ALVARO SAEZ es un ESTAFADOR
Pingback: Yoga Videos
Pingback: magical realism
Pingback: Crystal chandeliers
Pingback: Drug Lawyer Houston
Pingback: Babyoye Coupon
Pingback: April Myntra Coupon
Pingback: Blog Title
Pingback: instagram+ itz_Laric_honey
Pingback: breast actives
Pingback: hot girls in yoga pants
Pingback: Sosyal iliskiler
Pingback: mp3gain alternative
Pingback: pengacara perceraian
Pingback: in home pet sitting in naples
Pingback: is it a good time to buy gold
Pingback: buffalo web design
Pingback: hacker un compte facebook
Pingback: 24 hour emergency vet hamilton ontario
When investing in a private company, there are two kinds of investors: early-stage and later-stage. And while early-stage investors have more upside potential, they're also exposed to far more risk. Today, Matthew Milner explains how you can be a successful later-stage investor, and still make great gains, with much less risk. Read on...
In his recently released book, A Viennese Waltz Down Wall Street, Mark Skousen gives the Austrian School's take on what triggered the 2008 financial crisis - and why you should be wary of the artificial boom that's driving the recovery.
The Heartbleed bug is a massive security flaw that could put you and your personal information at risk. And while there are things you can do to limit the damage, you haven't yet seen the ramifications of this security disaster. The Internet in the post-Heartbleed world won't look like anything you've seen before. Mike Leahy explains...
As the U.S. "shale gale" nears its 10th birthday, it appears the America energy renaissance has outlived its critics. Still, it's natural to wonder whether all the big gains are behind us. Today, Matt Insley reveals the newest shale hotspot, and explains why there's still plenty of opportunity left in the U.S. energy boom. Read on...
The U.S., Russia, the EU and Ukraine all met in Geneva, where all sides agreed to halt all violence and provocations in Ukraine. But the news media are still taking an antagonistic stance toward Vladimir Putin and Russia. What gives? Today, Marc Faber explains the hypocrisy behind U.S. foreign policy... and the BS the news media are pushing about it...