Political correctness has lost in California, the land of it’s birth. The attempt to ban all fracking in California went down in defeat. The bill which was pushed hard in urban areas such as San Francisco, Santa Monica, and Malibu, suffered a decisive defeat in the California legislature where democrats hold a super majority. The assembly defeated the measure 37-24. All 25 republicans voted against the bill as did 12 democrats. Another 18 abstained, which can only mean that they wanted to vote no but were scared politically.
In California, they have found the Monterrey Shale contains 15 billion barrels of oil or about twice as much as the Bakken Oil Formation in North Dakota. That’s nothing to sneeze at when you consider the booming economy North Dakota is experiencing. Thanks to the fact that Obama cannot stop their economy. To understand what fracking could mean to California, we should examine what is going on in North Dakota.
Full employment is not an unemployment level of 0%. The 20th century economist, William beverage cited the number of 3% being fully employed. In North Dakota, the unemployment rate is 3.3%. And oil rig jobs, which are mostly union have average salaries of 50 to 100 thousand a year. And that boom carries itself over into other areas. Want to flip burgers at Burger King? 16 bucks an hour to start. Companies are having real problems finding and keeping employees. With the most modern techniques we have, the Bakken contains 3.65 billion barrels of recoverable oil and 1.85 trillion in recoverable natural gas. In the future, with new advancements that number could double or more.
Currently, the oil shale in the Monterrey Shale Formation is unrecoverable, but oil companies are working on the problem and have said they are getting closer. A study done at USC estimated that over the next several years, fracking could create 500,000 jobs in California. Revenues to the state are estimated to be 24.6 billion by the year 2020. many states have budgets much lower than that. And federal revenues would also soar between corporate and income taxes, not to mention the money saved by not having to pay out unemployment benefits and other government giveaways.
No doubt, the legislature will try to kill fracking with regulations that democrats might not be so frightened to vote for and the Sierra Club and other environmental groups will surely file frivolous lawsuits, which the liberal judges there will refuse to throw out. But with the vast amount of oil and gas, companies will remain and fight. They will be aided in this quest by unions who would see substantial growth from fracking. Don’t be surprised to see the unions begin contributing money to pro fracking republicans in the state.
The question also needs to be asked is can Obama stop the drilling in California, like he’s curtailed it in the Green River Oil Formation? Never heard of the GROF? Not surprising, but that formation is estimated to be 3 trillion barrels of oil. That’s not a typo, 3 TRILLION. In fact the GROF has more oil than the rest of the world’s proven reserves combined. (That includes all of the oil in Alaska, California and North Dakota) We could send OPEC into the history books and with all that cheap energy, our manufacturing base would climb through the roof and many foreign countries would manufacture the products they sell us right here.
Of course we can’t drill for most of the oil in the GROF. Why? because Obama signed an executive order right after being reelected that puts oil drilling off limits on 1,2 million acres of land. Obama stands in the way of the most dynamic recovery in history and don’t you expect that to change. And don’t count on the Keystone Pipeline ever being built. I think that was a foregone conclusion the moment Obama was reelected.
At least we have secured a major victory in California, although it could be very short lived due to regulatory legislation. But another good sign is that Gov. Jerry Brown is said to see the huge advantage to fracking. Cross your fingers.
Steven Ahle is the Editor of Red Statements and a regular contributor to The D.C. Clothesline.
