Organic Consumers Association

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California Fracking Fight in "Organic Heartland" Has $25 Billion Taxes at Stake

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California (CROMCA)'s reputation for environmental protection may be jeopardized by the lure of a $25 billion tax windfall that depends on how the state permits oil companies to take advantage of vast deposits lying two miles beneath its golden hills.

The Monterey Shale formation running through the center of the state may hold 15.4 billion barrels of oil -- equivalent to five years of U.S. petroleum imports, according to a state report. Releasing it requires drillers to smash the rock by forcing millions of gallons of water and chemicals underground, a technique known as fracking.

While New York and others have moratoriums on fracking as potential pollution risks are assessed, California -- the fourth-largest oil-producing state -- is working on industry- backed standards that allow it. With fracking, the Monterey Shale may yield 2.8 million jobs and $24.6 billion in state and local taxes by 2020, the University of Southern California said last week.

"The industry has been able to use hydraulic fracturing safely and in an environmentally responsible fashion in order to generate significant oil and gas resources," said Kurt Glaubitz, a spokesman for San Ramon, California-based Chevron Corp. (CVX), among the state's biggest employers.

The Monterey Shale, running southeast of San Francisco at an average depth of 11,000 feet, extends over about 1,750 square miles and may hold 64 percent of the nation's estimated shale oil reserves, according to the federal Energy Information Administration. That's double the combined reserves of the Bakken Shale (NDBOOILP) in North Dakota and the Eagle Ford Shale in Texas, where energy companies are spending billions. 

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