Industry’s over-inflated reserve estimates are unravelling, and with it the ‘American dream’ of oil independence
Next month, the US Energy Information Administration (EIA) will publish a new estimate of US shale deposits set to deal a death-blow to industry hype about a new golden era of US energy independence by fracking unconventional oil and gas.
EIA officials told the Los Angeles Times that previous estimates of recoverable oil in the Monterey shale reserves in California of about 15.4 billion barrels were vastly overstated. The revised estimate, they said, will slash this amount by 96% to a puny 600 million barrels of oil.
"… the star of the North American show is barely on most people’s radar screens. California shale will… reinvigorate the Golden State’s economy over the next two to three years."
"From the information we’ve been able to gather, we’ve not seen evidence that oil extraction in this area is very productive using techniques like fracking… Our oil production estimates combined with a dearth of knowledge about geological differences among the oil fields led to erroneous predictions and estimates."
"The oil had always been a statistical fantasy. Left out of all the hoopla was the fact that the EIA’s estimate was little more than a back-of-the-envelope calculation."
"Given the incredible difference between initial projections of 15 billion barrels and revisions to 600 million, does this not call into account all such global projections for tight oil?"