What's Oil Shale?

The process of extracting liquid crude oil from the ground is comparatively simple to extracting oil shale. Pressure from gases trapped in the chamber where oil is present force the crude oil to the surface. After this pressure is alleviated, the more difficult secondary and tertiary phases of oil drilling begin. In some cases, water may be pumped in to loosen compressed oil. Sometimes gasses are introduced to repressurize the oil chamber. And in many cases, the remaining oil is simply left for future drilling with more advanced equipment.

Getting crude oil from rock represents perhaps the most difficult process of extraction. Oil shale must be mined using either underground- or surface-mining methods. After excavation, the oil shale must undergo retorting. This is when the mined rock is exposed to the process of pyrolysis — applying extreme heat without the presence of oxygen to a substance, and producing a chemical change. Between 650 and 700 degrees Fahrenheit, the kerogen — the fossil fuel trapped within — begins to liquefy and separate from the rock [source: Argonne National Laboratory]. The oil-like substance that emerges can be further refined into a synthetic crude oil. When oil shale is mined and retorted above ground, the process is called surface retorting.

The problem is that this process adds two extra steps to the conventional extraction process in which liquid oil is simply pumped from the ground. In addition to mining, there's also retorting and refining of the kerogen into synthetic crude. Oil shale presents environmental challenges as well. It takes two barrels of water to produce one barrel of oil shale liquid [source: Argonne National Laboratory]. And without cutting-edge water treatment technology, the water discharge from oil shale refining will increase salinity in surrounding water, poisoning the local area [source: RAND].

There's also the matter of the rocks. Every barrel of oil produced from shale leaves behind about 1.2 to 1.5 tons of rock [source: RAND]. What should be done with this remaining rock? There are certainly projects that require loose rock — like covering ground beneath highway overpasses to discourage homeless settlements. But the demand may not meet the supply if oil shale production is ever conducted on a massive scale.

Royal Dutch Shell Oil Company has come up with an answer to some of the problems with oil shale refining. The company calls it In Situ Conversion Process (ICP) [source: Fortune]. In ICP, the rock remains where it is; it's never excavated from the site. Instead, holes are drilled into an oil shale reserve, and heaters are lowered into the earth. Over the course of two or more years, the shale is slowly heated and the kerogen seeps out. It's collected on-site and pumped to the surface. This cuts out the mining aspect, and further reduces costs since there's no need to transport or dispose of spent rock.

Shell's design includes a freeze wall — essentially, a barrier around the oil shale site where cooled liquids are pumped into the ground. This freezes any groundwater that may enter the site and keeps harmful byproducts like hydrocarbons from seeping out [source: Argonne National Laboratory].

Because of current obstacles, oil shale hasn't been commercially produced on a large scale. Simply put, it's currently more expensive and environmentally harmful than conventional drilling. But as the supply of crude oil diminishes and the price of petroleum rises, oil shale, especially under Shell's plan, is becoming increasingly attractive. Read about some of the positive and negative global consequences of emerging oil shale production next.

In the face of a major oil crisis in the 1970s, the Jimmy Carter administration federally funded oil shale research. But when the price of oil dropped once more, interest in unconventional supplies waned [source: Fortune]. With oil at prices higher than anytime in history — the wholesale price of oil per barrel is predicted to rise as high as $150 per barrel in 2008 — oil shale is attractive once again [source: NPR].

This holds true especially in the United States. The largest oil shale reserve in the world happens to be located in the western part of the country, covering parts of Wyoming, Utah and Colorado. This 17,000-square-mile deposit is called the Green River Formation [source: DOE]. And if crude oil can be produced from oil shale on a large scale, the U.S. could become the leader in unconventional oil reserves.

That's because the reserves found in the Green River Formation can produce an estimated 1.5 to 1.8 trillion barrels of crude oil [source: RAND]. This is three times more than the oil reserves Saudi Arabia currently holds. This amount could meet the United States' current oil demands for about 400 years [source: Argonne National Laboratory]. In actuality, this prolonged supply is due to a lesser pace of depletion than conventional reserves and the slower rate at which the kerogen could be extracted from shale. Some estimates place peak production of oil from the U.S.'s shale reserves at 5 million barrels per day at most. This isn't enough to meet the daily U.S. demand of 21 million barrels, just under 10 million of which are imported [source: Fortune].

But cutting foreign-imported oil by half would go a long way to making the U.S. less oil-dependent. In January 2008, the U.S. imported an average of about 3.8 million barrels per day from Venezuela, Nigeria and Saudi Arabia combined [source: EIA]. While U.S. relations with Saudi Arabia are friendly, the relationship between Venezuela and the United States is rife with tense political friction. And Nigeria is a politically unstable country; its oil supplies are under constant threat from rebel factions. These rebel groups resent foreign oil companies who, the groups claim, give little in compensation for the resources they take from the nation. Commercial oil shale production could protect the U.S. from threats to its energy supply posed by these countries.

Venezuela also demonstrates another aspect of commercial oil shale production in the United States: money, and lots of it. The oil shale deposits in the U.S. are largely situated under lands controlled by the federal government. Other countries, like Venezuela, have state-owned oil conglomerates; perhaps the U.S. will dabble in socialist energy policy in the future. The price is certainly right — Venezuela's state oil company posted revenues of $10.7 billion in the first three months of 2007. This represented a 10 percent decline in Venezuela's revenue over the same quarter of 2006 [source: AP]. Similarly, Vietnam's national PetroVietnam oil company reported earnings of $4.8 billion for the first quarter of 2008 [source: Viet Nam News].

These represent a drop in the bucket compared to the $2.5 trillion the U.S. government collected in taxes in 2007 [source: Tax Policy Center]. Still, every little billion helps.

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