American Oil and Gas Reporter - July 2017 - 108

ConventionCoverage: California Independent Petroleum Association
ronmental activists, despite previously
being ordered by the court to include industry in the negotiations.
Another area where Zierman reported
CIPA members were meeting the challenge
collectively is support for the association's
political action committee. In the last two
election cycles, he said, CIPAC made
$4.3 million in campaign contributions.
"Probably a dozen legislators owe (their
elections) to the support of the oil industry,"
he proclaimed, pointing to CIPAC's practice of identifying more moderate Democrats in contested primaries.
Looking ahead to California's 2018
gubernatorial election, Zierman promised
CIPAC would remain active. "We can't
sit on the sidelines if we find a candidate
we think is viable," he advised. "It is
really expensive to make a difference,
but you have to decide if it is worth it for
our survival."
While CIPA doesn't always agree with
current Governor Jerry Brown-an avowed
champion of fighting climate change-Zierman credited Brown's position that GHG
limits should be as economically efficient
as possible, along with the help of moderate
Democrats, with preventing the Democratic
supermajority from pushing through its
favored cap-and-trade bill this session.
Legislative Issues
California has relied on a market-based
cap-and-trade system to limit GHG emissions since it adopted AB 32 in 2006.

California Assemblyman Mike Gipson, DGardena, praises the oil and gas industry
for "taking chances on individuals whom
other people will not" during his keynote
address at the California Independent
Petroleum Association's annual meeting
banquet, June 10 in Monterey, Ca.

This year's AB 378 would have extended
the California Air Resources Board's capand-trade authority to Dec. 31, 2030, but
also would have extended the program
beyond regulating greenhouse gases to
regulating criteria pollutants already regulated by local air districts. AB 378 failed
35-39 June 1 on the Assembly floor.
One lawmaker who voted against AB
378 was Assemblyman Gipson, who told
CIPA it "would have done catastrophic
damage to this industry. Many of us were
set to make sure this bill did not leave
the Assembly floor.
"I support a reasonable cap-and-trade
policy . . . that brings everybody to the
table and doesn't place a burden on just
one industry," Gipson added.
Assemblyman Fong criticized SB 1, a
$52 billion transportation and infrastructure
bill passed by the legislature in April that

raises both the state's $0.24 gasoline and
$0.16 diesel excise taxes to $0.36 a gallon.
He pointed out that raising fuel excise taxes
would increase consumer costs for all transported goods. Moreover, he said, 30 percent
of the gasoline tax increase is earmarked
for nonroad uses, which he said polls indicated was engendering public wrath.
He commented that $105 billion in
tax increases had been introduced this
year, "and we have been in session only
six months."
Calling it "crazy" that a family living
in the San Francisco Bay area earning
$105,000 a year was considered low income and eligible for government assistance, Fong contended that "affordability
is the issue that is going to dominate
everything moving forward. That is the
lens through which we have to evaluate
public policy."
r

Geologist Sees Huge Potential
For Future California Production
MONTEREY, CA.-The industry may
only have scratched the surface of California's crude oil production potential,
suggested one of two technical speakers
at the California Independent Petroleum
Association's annual convention, June
8-11 in Monterey.
Consulting geologist and geology professor Donald Gautier called California's
producing basins "the most interesting
occurrence of petroleum I ever have seen.
There is an incredible volume of recoverable oil right here among us."
CIPA's other technical speaker, Robert
Fryklund, chief upstream strategist at IHS
Energy, corroborated Gautier's opinions
with some data of his own and also offered
some observations on global oil markets.
Gautier, who teaches petroleum geology
at both the University of Southern California
and the Australian School of Petroleum
in Adelaide, is scientist emeritus with the
U.S. Geological Survey and has consulted
with the California Council on Science
and Technology and the Lawrence Berkeley
Laboratory. He cited an analysis of the
hydrocarbon saturation of producing formations worldwide performed by Exxon
in 1990. Several California basins, including
the Los Angeles, San Joaquin Westside,
Ventura and Santa Maria "are orders of
magnitude greater than almost anyplace
else on planet Earth," he revealed.

108 THE AMERICAN OIL & GAS REPORTER

Looking at the Midway-Sunset Field
alone, he noted that estimated ultimate
recovery had grown from around 1 billion
barrels of oil in 1960 to 4 billion barrels
today "in a field discovered in the 19th
Century in which tens of thousands of
wells have been drilled." Estimates of
Midway-Sunset's original oil in place
range as high as 15 billion barrels and
average about 11 billion, which Gautier
called "a huge number. If we compare
EUR to OOIP, we still aren't at that high
a recovery efficiency."
Similar increases have been seen in
other fields such as Wilmington Offshore,
South Belridge and Kern River, Gautier
continued. Not surprisingly, those large
fields have received companies' focused
expertise and investment, he surmised,
then added, "But there is a whole population of slightly smaller accumulations .
. . where I believe with clever engineering
and some risk capital, enormous wealth
could be generated."
Gautier also cited two USGS analyses
that calculated mean remaining recoverable
oil for 10 LA Basin fields at 3.2 billion
barrels and for nine San Joaquin Basin
fields at 6.5 billion barrels. "That is about
10 billion barrels of oil that could be
added to reserves beyond current estimated
recovery just in these 19 fields, and there
are many, many other fields," he enthused.

American Oil and Gas Reporter - July 2017

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