“We want to get the greenhouse gas emissions down, but we also want to keep our economy going.” -- California's Democrat Governor Jerry Brown

California’s Monterey shale formation runs southeast outside San Francisco, some 1,750 square miles down through central and southern California to south of Los Angeles. It holds an estimated 15.42 billion barrels of recoverable oil, 64% of the total U.S. shale oil reserves in the contiguous 48 states. That’s double the amount in North Dakota’s Bakken Shale and Texas’ Eagle Ford Shale combined.

A new report now says fracking could create anywhere from half a million new jobs in California by 2015, even 2.5 million jobs by 2020, plus a bundle in the way of state tax revenue. That would help lower the unemployment rate, now trending at 10%, worse than Rhode Island and right up there with Nevada.

California’s energy boom also undercuts the tax-and-spend-to-save-the-state argument from Sacramento. After all, if tax and spend worked, why did California’s jobless rate soar to 12%?

California has what are believed to be the biggest deep-shale reserves in the world, with offshore reserves estimated to hold more than 10 billion barrels of oil and nearly 12 trillion cubic feet of natural gas. Estimates also indicate that the state could see about $4.5 billion in oil-related tax revenue in 2015 and $24.6 billion by 2020 if fracking takes off in the state (for more, click here).

The report comes as a growing number of Congressional Democrats in Washington are coming around to support the Keystone pipeline, now held up in D.C. The pipeline would deliver oil from the tar sands in Canada to the Gulf Coast. At last count, 17 Senate Democrats voted with 45 Republicans for a recent budget amendment supporting the pipeline.

Oil output from western Canada is set to roughly double by 2025 from 2011, to 5.5 million barrels a day. Without the Keystone pipeline, the oil will be moved by polluting trains, trucks and oil tankers, or shipped to countries that have weak pollution standards, including China. (Warren Buffett’s railroad company, BNSF, will profit nicely if Keystone is not built.)

Bank of America/Merrill Lynch has already issued a report noting the American energy boom will add more supplies to diminishing global spare capacity, helping the world avoid OPEC’s oil price monopoly and its shenanigans. Cheap U.S. natural gas could save U.S. households more money, and the extra supply helps keep a lid on inflation, improves U.S. trade deficits -- all of which strengthens a battered U.S. dollar.  

But California “wants the oil revenues without the oil,” as one analyst put it, due to environmental concerns over spills, and even worse, earthquakes, which Oklahomans now fear are happening in their state due to the practice of hydraulic fracturing to produce natural gas. The fear is, the wastewater used to conduct fracking adds countless pounds of pressure to faultlines below the surface, So far, the fear of fracking from earthquakes is not on the radar screen in California, which already has plenty of earthquakes.

But earthquakes are erupting in states not used to seeing them, including Arkansas, Texas, Ohio, and Colorado. Fracking activity has been on the rise in all of these states since 2002.

Elizabeth MacDonald joined FOX Business Network (FBN) as stocks editor in September 2007 and is the author of Skirting Heresy: The Life and Times of Margery Kempe (Franciscan Media, June 2014).
Follow Elizabeth MacDonald on Twitter @LizMacDonaldFOX.