What Are the Prospects of a U.S. Oil Shale Industry?
With oil prices hovering above $60 per barrel and the demand for oil continuing to grow, interest in oil shale is also growing. But the prospects for a viable oil shale industry are unclear because assessments are dated. A new RAND report provides an updated view of development prospects. The largest known oil shale deposits are in the Green River Formation, which covers parts of Colorado, Utah, and Wyoming, and which contains between 1.5 and 1.8 trillion barrels of oil. Of that, roughly 800 billion barrels are recoverable—more than triple Saudi Arabia’s proven oil reserves. Two processing approaches are available: mining followed by surface retorting and in-situ retorting. While the former approach is technically viable, a first-of-a kind commercial plant is unlikely to be profitable unless real crude oil prices are at least $70–$90 per barrel (2005 dollars) over the operating life of the plant. As for in-situ retorting, Shell Oil has successfully conducted a small-scale field test. W
