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Calif. oil trove trapped

| Saturday, April 12, 2014, 9:00 p.m.

SHAFTER, Calif. — A bustling city is sprouting on five acres here, carved out of a vast almond grove. Tanker trucks and heavy equipment come and go, a row of office trailers runs the length of the site and an imposing 150-foot drilling rig illuminated by football-field-like lights rises over the trees.

It's all been hustled into service to solve a tantalizing riddle: how to tap into the largest oil shale reservoir in the United States.

Across the southern San Joaquin Valley, oil exploration sites have popped up in agricultural fields and on government land, driven by the hope that technological advances in oil extraction — primarily hydraulic fracturing and acidization — can help provide access to deep and lucrative oil reserves.

The race began after the federal Energy Information Administration estimated in 2011 that more than 15 billion barrels of recoverable oil is trapped in what's known as the Monterey Shale Formation, which covers 1,750 square miles, roughly from Bakersfield to Fresno.

But getting at that oil isn't easy. The Monterey shale is unlike other oil shale formations. In those booming oil fields, reserves are pooled in orderly strata of rock. Once the rock is cracked open by fracking or other means, operators can sink a single well with multiple horizontal shafts and pull in oil from a wide area.

California's geology is far more complicated. The earth here has undergone constant seismic reshaping that has folded, stacked and fractured the substrate, trapping the oil in accordion pleats of hard rock at depths of up to 12,000 feet. To reach the crude using conventional methods requires oil companies to drill far-deeper wells, and more of them — a prohibitively expensive undertaking.

To crack the code, companies are busily drilling test wells here, using various fracking and acidization techniques in search of cheaper solutions. So far, no one seems to have found a method to profitably extract the oil.

“Very smart engineers are spending their waking hours trying to come up with the magic formula,” said Rock Zierman, chief executive of the California Independent Petroleum Association, a trade group that has many Monterey shale prospectors among its members.

“What we do know is there is a heck of lot of oil down there,” Zierman said. “What we don't know is how we can get it out of the ground in an economically viable way to justify the heavy investment.”

The shallow, 1,000-foot wells in the established Bakersfield oil patch might cost $100,000 to sink. In the Monterey formation, that expense might run to $5 million, and with every chance of yielding a dry hole.

Despite the difficulty in getting at the oil, the potential bonanza is too big for many oil companies to ignore.

In Kern County — where the bulk of the Monterey formation lies — available land for drilling has nearly all been snapped up. Speculators are believed to be responsible for driving up the cost of obtaining leases.

The leading edge of the exploration boom is pushing Bakersfield's oil patch — which has reliably produced oil for more than 100 years — into long-established agricultural tracts. Oil companies are paying farmers for their water rights, land and, in some cases, buying their homes outright to get at the reserves that might lie underneath.

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