A new study from the University of Southern California (USC) is giving a boost to the arguments put forward by advocates of hydraulic fracturing, who have long held that the oil production technique promises to unlock vast energy reserves and spur economic development in the Golden State.
This proposition has struck some observers as unrealistic, given the historical record. California has always been a major energy producer, but its output has fallen considerably over the past few decades. According to the California Energy Commission, crude oil production dropped more than 40 percent between 1985 and 2010.
Until recently, California's situation mirrored a country-wide decline in energy production. However, as a result of innovative developments in oil production equipment, output patterns have changed direction at the national level. The USC report highlighted the striking increases in oil production – and subsequent economic booms – that have taken place in states where fracking has been employed on a large scale.
For instance, as the use of hydraulic fracturing expanded in North Dakota, the state's output soared from roughly 200,000 barrels per day in 2008 to more than 750,000 barrels per day in 2012. During the first three years of that time period, North Dakota's gross domestic product grew faster than that of any other state, while unemployment fell to 3.2 percent – the lowest rate in the nation.
With more than 15 billion barrels of technically recoverable shale oil, California could experience an even greater boom. North Dakota's Bakken Shale contains less than 4 billion barrels.
The USC study concluded that "prudent development of the Monterey Shale could add hundreds of thousands of new jobs to California over the next decade while stimulating economic growth and generating significant new state and local tax revenues."
Despite scope of potential benefits, development could prove challenging
As we discussed in a previous post, producers attempting to exploit the Monterey Shale will face significant obstacles as a result of geological challenges that are unique to the region. Countless years of heightened seismic activity have left the entire shale formation twisted and broken, which will translate into higher costs and greater risks for producers. For this reason, efficiency will be key for firms that are looking to turn a profit.
Making use of hydraulic jet pumps can help energy companies guarantee that their oil and gas wells are producing at maximum capacity. While many different products can provide an aid in this area, jet pumps are considered to be particularly valuable, as these versatile solutions can be used to maintain production from wells in which problems with the casing prohibit the use of other artificial lift equipment.