Just as California is about to impose one of the nation’s first cap-and-trade regimes to reduce greenhouse gas emissions, it is on the cusp of another oil boom.

Reports to the Southern California Leadership Council last month and in the New York Times on Feb. 3 indicate that Occidental Petroleum, Venoco (which has operations in both Ventura and Santa Barbara counties) and others are beginning to exploit the Monterey Shale formations.

The high price of oil makes the formations profitable to drill, using hydraulic fracking and slant drilling technology, and despite the burden of regulation and push back from environmental activists.

Monterey Shale could hold up to 15.4 billion barrels of oil, according to the U.S. Energy Information Administration. So far drilling is exploratory and mainly taking place in the Central Valley and Bakersfield.

But we are hearing reports of leasing activity in the Santa Paula-Fillmore area and other places where existing fields could be drilled deeper to extract shale oil.

On one side of the argument is jobs and America’s manufacturing resurgence. On the other is fracking and its environmental impact.

Ironically for those who would totally shut down oil production in California, the more expensive oil becomes, the more attractive it is to go after expensive projects such as drilling Monterey Shale.