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Oil Shale Development in the United States

Oil Shale Development in the United States: Prospects and Policy Issues

James T. Bartis
Tom LaTourrette
Lloyd Dixon
D.J. Peterson
Gary Cecchine
Copyright Date: 2005
Edition: 1
Published by: RAND Corporation
Pages: 88
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  • Book Info
    Oil Shale Development in the United States
    Book Description:

    In the early 1980s, industry and government took a hard look at the economics of extracting oil from vast deposits of shale that lie beneath the western United States. Oil prices subsided, and interest waned. With oil prices spiking and global demand showing no signs of abating, reexamining the economics of oil shale makes sense. In this report, the authors describe oil shale resources; suitability, cost, and performance of new technologies; and key policy issues that need to be addressed by government decisionmakers in the near future.

    eISBN: 978-0-8330-4100-5
    Subjects: Political Science, Transportation Studies

Table of Contents

  1. Front Matter
    (pp. i-ii)
  2. Preface
    (pp. iii-iv)
  3. Table of Contents
    (pp. v-vi)
  4. Figures and Table
    (pp. vii-viii)
  5. Summary
    (pp. ix-xvi)
  6. Acknowledgments
    (pp. xvii-xviii)
  7. Abbreviations
    (pp. xix-xx)
  8. CHAPTER ONE Introduction
    (pp. 1-4)

    The United States contains massive amounts of oil held in mineral deposits known as oil shale, located primarily in the states of Colorado, Utah, and Wyoming. The recoverable energy from these high-grade deposits may be more than 800 billion barrels of crude oil equivalent—more than triple the known oil reserves of Saudi Arabia.

    For nearly a century, the oil shale in the western United States has been considered as a substitute source for conventional crude oil. But the economics of shale oil production have persistently remained behind conventional oil. When crude oil prices were about $3 per barrel in...

  9. CHAPTER TWO The U.S. Oil Shale Resource Base
    (pp. 5-10)

    For estimating U.S. oil shale resources, two measures are commonly used: resources in place and recoverable resources. In estimates prepared by the U.S. Geological Survey (USGS), resources in place are distinguished according to their grade—specifically, the gallons of oil that can be produced from a ton of shale.¹ The rich ores that yield 25 to more than 50 gallons per ton are the most attractive for early development. Deposits with grades below 10 gallons per ton are generally not counted as resources in place because it is commonly assumed that such low yields do not justify the costs and...

  10. CHAPTER THREE Oil Shale Technologies
    (pp. 11-24)

    This chapter briefly describes different oil shale production methods, examines their readiness for commercial operations, and provides estimates of production costs.

    Extracting oil from oil shale is more complex than conventional oil recovery. Hydrocarbons in oil shale are present in the form of solid, bituminous materials and hence cannot be pumped directly out of the geologic reservoir. The rock must be heated to a high temperature, and the resultant liquid must be separated and collected. The heating process is calledretorting. Processes for producing shale oil generally fall into one of two groups: mining, either underground or surface, followed by...

  11. CHAPTER FOUR The Strategic Significance of Oil Shale
    (pp. 25-34)

    This chapter examines the strategic significance to the United States of developing oil shale. By “strategic,” we mean how the development of oil shale resources may contribute to U.S. goals at home or abroad. In the case of oil shale, this is an especially important issue because commercial development will require access to government lands; involve adverse environmental impacts; displace alternative land uses; and likely involve government expenditures associated with permitting and leasing, infrastructure development, and R&D.

    For the purposes of this discussion, we begin by assuming a future in which a mature oil shale industry is profitably operating without...

  12. CHAPTER FIVE Critical Policy Issues for Oil Shale Development
    (pp. 35-52)

    The potential emergence of an oil shale industry in the western United States raises a number of critical policy issues. One set of issues concerns environmental and socioeconomic impacts that will occur as development efforts reach the initial commercial operation phase. These issues concern land use and ecological impacts, air and water quality, and community development. For these issues, the acuteness of the impacts and how government decisionmakers address them could become a deciding (i.e., go or no-go) factor in whether there will be an oil shale industry at all in the western United States. A second set of issues...

  13. CHAPTER SIX The Development Path for Oil Shale
    (pp. 53-58)

    The future prospects for oil shale remain uncertain. For more than 20 years, unfavorable economics, particularly those of surface retorting, has kept oil shale off the nation’s energy agenda. The estimated cost of surface retorting remains high, well above record-setting prices for crude oil that occurred in the first half of 2005. If surface retorting were the only approach for oil shale development, this report would have a clear message: It is inappropriate to contemplate near-term commercial efforts; oil shale extracted through surface retorting belongs in the nation’s R&D portfolio, not on its energy policy agenda for commercial development.


  14. APPENDIX Cost Estimation Methodology and Assumptions
    (pp. 59-62)
  15. Bibliography
    (pp. 63-68)