Is California Collapsing?

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Is California Collapsing? By Keith Kohl | Tuesday, May 27th, 2014 We don't often hear about the other side of U.S. oil production. Today, all we hear about is the good news. We read about the Bakken's billionth barrel of oil, or how the booms in South and West Texas revitalized the state's oil industry. What many fail to realize, however, is that the situation is radically different elsewhere. Unfortunately, nobody is immune to bad news. And we get a sobering dose of reality in the U.S. shale patch every once in a while. Believe me, nothing makes a young Saudi Prince smile more than when this kind of news hits the United States' oil industry. Advertisement This Man Repeatedly Disguised Himself as a Woman... and Made Millions Talk about a bizarre path to extreme riches... Perhaps the strangest plot twist of all in this incredible yet true story is how his stupendous success inspired one of the most accurate (and secret) stock strategies of all time. You have to read it to believe it. The story — and the secret stock strategy — is revealed HERE. The Revision Heard Around the World In a matter of seconds, nearly 13 billion barrels of oil were suddenly wiped off the books in California. At least, that's what happened a week ago, when the EIA drastically cut its estimates for the amount of recoverable oil in California's Monterey Shale. Remember, this formation was expected to become California's version of the Bakken. Now, the EIA believes just 600 million barrels of oil are presently recoverable. Say goodbye to the 2.8 million new jobs California's oil boom would've created. And the Golden State can forget about spending the $25 billion in tax revenue it would have generated. So, is the sky really falling? Or is this new estimate a nail in the coffin for California's oil industry? Don't believe the hype... yet. Crisis Breeds Opportunity As harsh as the EIA's revision was to the Monterey, it certainly isn't the first time the U.S. government has dropped this kind of bombshell on us. In 2012, the USGS slashed its 2002 estimates on the National Petroleum Reserve in Alaska by 90%! That report also knocked off billions of barrels of oil and set Alaska on a path toward exporting LNG. In the same year, the Department of Energy cut its estimate for recoverable natural gas in the Marcellus by 80%. It turns out the 410 trillion cubic feet of natural gas they thought was recoverable is only around 84 trillion cubic feet. In the latter case, the harsh revision didn't hinder drillers, who are producing about 14 billion cubic feet of Marcellus-trapped natural gas every day. Well, so much for throwing in the towel. Advertisement The Secret of America's Blood Oil In 1921, this oil was worth killing for... But that's no longer the case, and you can now legally claim your stake for just $1.00. This could very well be the most profitable history lesson you'll ever see. Click here to check it out. The Only Safe Bet in Oil Profits Few investors today believe in a sure bet these days. After the EIA's latest revision of the Monterey Shale, I can't exactly blame them. For California, peak oil has been a reality since February of 1986. That month, the state pumped 1,109,000 barrels of oil out of the ground. Over the next 28 years, output has declined more than 50%. Truth is, they're wrong to panic over media headlines. Despite the new projections, let's be clear about one thing: there is still a massive amount of oil underground. Remember, the EIA is strictly reporting on the amount of reserves it believes is recoverable using current technology. Whenever I read these reserve estimates (specifically from the U.S. government), I'm always reminded of a little-known company named Meridian Oil Inc Don't feel too bad if you've never heard of them — I don't meet many people who have. Twenty-seven years ago, Meridian Oil Inc. drilled and completed the first horizontal well in the Bakken. Even though the well produced a lot of natural gas, it was Meridian's success in the upper Bakken that was a precursor to the boom taking place today. Also, don't forget that these revisions can go both ways. I'm sure more than a few of you remember when the USGS increased its estimates of technically recoverable oil reserves in the Bakken from 995 million to 4.3 billion barrels. That single report officially launched the Bakken into the spotlight. And if there's one thing I refuse to bet against, it's technology. I've told my readers countless times that the next stage of the U.S. shale boom won't come from a new, massive oil discovery, but rather from finding new ways to tap into plays we've known about for decades. But is it really possible to stay ahead the curve and successfully trade your way through the U.S. shale boom? Learn the five must-own oil and gas stocks in 2014 and find out for yourself. Until next time, Keith Kohl @KeithKohl1 on Twitter A true insider in the energy markets, Keith is one of few financial reporters to have visited the Alberta oil sands. His research has helped thousands of investors capitalize from the rapidly changing face of energy. Keith connects with hundreds of thousands of readers as the Managing Editor of Energy & Capital as well as Investment Director of Angel Publishing's Energy Investor. For years, Keith has been providing in-depth coverage of the Bakken, the Haynesville Shale, and the Marcellus natural gas formations — all ahead of the mainstream media. For more on Keith, go to his editor's page. I liked this article | I did not like this article Follow Energy and Capital on The Bottom Line Related Articles Saudi Arabia Panics Amid U.S. Oil Glut NASA Captures the Tight Oil Boom OPEC's Oil Collapse Big Oil, Big Promises Recently... These Companies are Public! 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