"The economics of producing oil in California are tough," said Tupper Hull, a spokesman for the Western States Petroleum Association, a public policy advocacy group. He said unlike Bakken or Eagle Ford, the Monterey terrain lacks uniformity and consistency conducive to natural gas and oil production.
"It's fair to say there's a fair amount of exploration taking place, and companies are trying to figure out how to cost-effectively [drill]. With the challenges of the geology, they are still in the process of working those issues out," Hull added.
While a handful of midsize oil companies like Occidental Petroleum and Venoco are players in Monterey, the region thus far lacks the flood of investment and lavish attention of the largest U.S. oil companies, all of whom have ramped up production in other areas of the country. Although California has a history of natural resource exploration, some say the shale renaissance has caught the largest U.S. state flatfooted.
"California is late in the shale game," said Anthony Ingraffea, an engineering professor at Cornell University. Moves to exploit shale "started in Texas nearly 20 years ago, and in Pennsylvania about six to seven years ago." With no fewer than 10 separate pieces of shale-related legislation working their way through the state's legislature, "California is rushing to figure out what to do," he added.
Observers, however, see Monterey as a dicier proposition than its counterparts. Barriers to its full-scale development include its being situated near an earthquake prone and geologically sensitive region, ravenous U.S. energy needs that outstrip Monterey's estimated reserves and regulatory uncertainty.
"The geology in Monterey is significantly more variable than in the other major plays," Frank Wolak, an economics professor and expert on sustainable development at Stanford University, said in an e-mail to CNBC. He also cited environmental concerns over hydraulic fracturing that are "not based on experience or scientific evidence, but emotion."