Mark Mills writing in The Wall Street Journal says that projections about California’s latent shale oil reserves could be the silver bullet for the state’s fiscal woes:
The overall economic benefits of opening up the Monterey shale field could reach $1 trillion. One can only imagine the impact on California’s education system, social programs, infrastructure, and even energy-tech R&D. Moreover, with that kind of revenue, Sacramento tax collections could wipe out debt and deficits.
But is it really plausible that California’s big-spending political class would use the $1 trillion windfall to pay off the state’s debts and seed a rainy day fund? Call me cynical, but it seems way more likely that state spending would increase above and beyond whatever windfall comes from oil drilling.
That said, I’d love for Sacramento to prove me wrong. Let the fracking begin!