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GOP candidates Kashkari, Donnelly want to tap Monterey Shale oil

GOP gubernatorial candidate Neel Kashkari is skeptical of dramatic reduction in Monterey Shale oil estimate
Whatever oil reserves are in the Monterey Shale must be tapped, GOP gubernatorial candidate Tim Donnelly says

Republican gubernatorial candidates Neel Kashkari and Tim Donnelly, who have both made fracking for oil the centerpieces of their plans to create jobs, were in rare agreement Wednesday as they brushed off a recent federal report that most of the oil in a vast California deposit is not recoverable now.

A report released by the U.S. Energy Administration last week estimated that 600 million barrels of oil could be extracted from subterranean rock spread across much of Central California, known as the Monterey Shale, rather than the 13.7 billion barrels once thought recoverable — a 96% reduction.

Kashkari, after speaking to a Republican women's luncheon in Chula Vista on Wednesday, noted that the federal government failed to anticipate substantial deposits now being tapped in North Dakota and Texas. And he was skeptical of the report about the Monterey Shale, given the dramatic reduction in its estimate.

"That calls into question their methodology," the former U.S. Treasury official said in an interview. "… I want to look to the private sector and say, 'Hey, what do you think you can do?'"

In addition to fracking, California should try to expand all sectors of the economy and allow the market to dictate which succeed and which fail, Kashkari said.

"If we pursue all of the above in terms of jobs, and certain sectors boom and other sectors don't boom, so be it," he said.

Donnelly, an assemblyman from San Bernardino County, agreed. Whatever reserves are in the Monterey Shale — a 1,750-square-mile formation — must be tapped, he said, because the need for domestic sources of energy is great.

"Look, nobody's really going to know how much is in the Monterey Shale unless we really try to extract those natural resources," Donnelly said in an interview outside the Assembly chamber. "The natural gas and the oil potential is still extraordinary, even if it's a fraction of what was originally thought."

Both candidates frequently point to a 2013 USC study that said exploring the Monterey Shale could create 2.8 million jobs and add $24.6 billion in annual tax revenue by 2020. The analysis was partly funded by the Western States Petroleum Assn.

That potential sparked a flurry of exploration by oil companies and spirited opposition by environmentalists, who heckled Gov. Jerry Brown at the state Democratic Party's spring convention over his unwillingness to ban fracking, a technique for injecting water, chemicals and sand deep underground to release oil.

The Republican candidates were speaking less than a week before the Tuesday primary. Kashkari gave his address at a private country club, running through his biography as the child of immigrants who went on to work in President George W. Bush's administration.

He argued that he is the best candidate in the race to enlarge the troubled state GOP, which is at a historic low in voter registration, by focusing on fiscal conservatism and education.

"I'm running for governor because I want to rebuild the middle class," Kashkari said, delivering his speech in a ballroom overlooking a verdant golf course.

He noted that the state still ranks in the bottom among the 50 states on employment and schools and has the highest rate of poverty in the nation. "And Jerry Brown has the audacity to call it the California comeback," he said. " … He's weak on education, he's weak on jobs, he's weak on the economy."

Kashkari has trailed Donnelly in public opinion polls but appears to be making up ground since launching television advertisements and a mail ad program in recent weeks. Donnelly had been scheduled to address the gathering via Skype, but an aide told the group's president that the lawmaker was unavailable because of Assembly business.

Donnelly, who first gained the public eye as a leader of a Minuteman volunteer border-patrol group, had also been expected to speak at an evening rally near the San Ysidro border crossing in San Diego County on the subject of a U.S. Marine imprisoned in Mexico who has become a cause celebre. A campaign spokesman said Wednesday afternoon that Donnelly was "locked" in the statehouse and could not attend.

Legislative officials said Donnelly could have sought a pass to leave the Assembly on Wednesday, a pre-scheduled marathon voting day, but did not request one. The lawmaker said he overheard the Assembly speaker saying no members could be let out.

seema.mehta@latimes.com

melanie.mason@latimes.com

Mehta reported from Chula Vista and Mason from Sacramento.

Copyright © 2014, Los Angeles Times
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