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Down by 96%! June 3, 2014

Posted by hslu in Economics, Energy.
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Yes, it is not a typo. It was reported by LA Times and Reuters (see links below.)

http://www.latimes.com/business/la-fi-oil-20140521-story.html%5B/embed%5D

http://www.reuters.com/article/2014/05/21/eia-monterey-shale-idUSL1N0O713N20140521%5B/embed%5D

Yes, I am talking about the reduction of “technically” recoverable shale oil in California’s Monterey Shale formation. The reduction was issued by U.S. Energy Information Administration (EIA.)

california shale map

Source: http://money.cnn.com/2013/01/14/news/economy/california-oil-boom/

Here is the math:

Original estimate: 13.7 billion barrels

New estimate: 600 million barrels

Reduction: 13.1 billions or 95.6%

The worst part of this story is this: the aforementioned Monterey Shale formation was estimated to contain roughly 64% of America”s shale oil resources in the lower 48; according to LA Times.

The 96% reduction takes away ~2.8 million new jobs and reduces annual tax revenue by as much as $24.6 billion to the state of California.

I had my doubt about America’s shale oil revolution a while back and I stand by my assessment now. The recent news from EIA seems to back up my reservation.

 

 

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