The potential of more than 2.5 trillion barrels of synthetic crude oil from oil shale is nothing short of fantastic! (Nearly two-thirds of that amount is located principally in the Bakken Formation of North Dakota, Montana and Saskatchewan; and the larger Green River Formation of Colorado, Wyoming and Utah.) With annual worldwide oil consumption of approximately 30 billion barrels of oil, it would seem that oil shale’s astonishing numbers drive yet another nail in the coffin of Peak Oil theory.

A couple of trillion barrels of oil from shale formations will hold us in good stead for more than a few lifetimes! (In a report issued several years ago, the RAND Corporation estimated that the Green River Formation alone could provide a quarter of this country’s current oil needs for 400 years! Amazing! [1]) It’s every bit as awe-inspiring a number as are the potential tar sands resources in Alberta.

Of course, there are two sides to every story, and like the tar sands of Alberta, there’s an enormous gap between what may rest beneath the ground and what we’ll be able to extract, refine, and eventually use over the course of many, many decades. Like its unconventional oil companion to the north, oil shale is not likely to be the solution to our energy concerns in the next several decades. If it ever is, it may be too late in any event.

Geologists and the United States Geological Survey estimate there are approximately 4.3 billion barrels of technologically recoverable oil in the Bakken region. We may possess the capabilities of extracting that much oil, but the costs going in and the consequences of attempting to extract and produce oil from shale are different matters entirely, so what may be “technologically recoverable” is by no means the same as “economically feasible.” And let’s also take note that 4.3 billion barrels of oil is about 7 or 8 months’ worth of oil consumption here in America, and the best hope is that all of that would be extracted over the course of no more than twenty years. Not particularly impressive.

The other formations appear to hold not much more promise, although the more optimistic estimates suggest we might see as much as 130 billion barrels of oil from them … eventually. (One expert directly involved with Shell Oil’s production efforts suggested back in 2005 that by 2030 we might see 5 million barrels per day from the formations out West. [2] Five million bpd doesn’t mean all that much now; it will mean much less a couple of decades into the future.)

Oil shale is, as acclaimed energy expert Chris Nelder has stated: “the oil of the future … and it always will be.”

The truth is that after nearly fifty years of attempts to develop oil shale into a satisfactory oil substitute, only a few hundred million barrels of oil have been produced, if that. In other words, we’ve probably managed to supply about a week’s worth of worldwide oil demand as a result of all that effort and money over nearly half a century. Trillions of barrels of oil! stops sounding so impressive when reality intrudes.

A recent and significant increase in production (see a detailed explanation here: Bakken Shale – Has it Moved the Oil Needle? by Gail the Actuary, November 2, 2009) does not change the basic fact that no company has yet made the full-scale commercial production of oil shale economically feasible—with no guarantees that we’ll ever see that outcome. The research and testing of commercial capabilities are not adequate to the task after decades of effort, nor do we have in place the proper facilities that would be needed to handle production demands. They won’t pop out of the ground fully-formed any time soon.

Best estimates are that establishing those essential commercial components is at least another decade away. By then we’ll be well on our way to decreasing supply trying to match increasing demand. That’s bad math.

Part of the reason is that like tar sands, oil shale is not easily extracted. Oil shale is not oil. It’s kerogen, a solid, not-yet-fully matured version of the fossil fuel. More specifically, it’s the organic matter within the oil shale, and in order for the oil to flow free of the shale and be pumped to the surface, it must be heated to more than 700 degrees for a couple of years (while surrounded by a three-foot wall of ice)! This is the “in situ” procedure. The other primary means of obtaining kerogen (usually buried thousands of feet below ground, by the way) is the “retorting” procedure: mining the oil shale and then heating the kerogen above-ground.

Either option represents the investment of a LOT of energy. It’s also important to appreciate that oil derived from kerogen requires further refining before it can be used for transportation purposes … more effort and expense after extraction.

And I won’t touch on the significant amounts of water required to help extract oil shale (and in regions of this country where water is a limited resource to begin with) nor am I discussing in this post the environmental degradation and pollution that results from mining this resource. I also omit any discussion about the impact of such massive undertakings on the local communities involved. I can omit discussion here, but we cannot ignore those considerations.

These pesky little details seem to get overlooked by those who dispute Peak Oil’s imminent approach.

At what point do we decide that the tens and hundreds of billions of dollars we seemingly have at the ready to invest in oil-related energy exploration and production ought to be devoted to resources not quite so limiting? Like the oil from tar sands, oil from oil shale is not anywhere near as productive or efficient an energy source as conventional crude oil … not even close, actually.

We’re just postponing the inevitable, and it seems we should be seriously considering alternatives (not that they are a panacea, either, since we need a lot of oil to research, extract, produce, process, and transport almost every other form of energy). They will at the very least represent a much better long-term solution than oil, shale, and tar. How difficult do we want to make the transition away from oil-based energy?

We have some choices to consider….

Next: Shifting Gears


[1] Oil Shale Development in the United States: Prospects and Policy Issues by James T. Bartis, Tom LaTourrette, Lloyd Dixon, D.J. Peterson, Gary Cecchine; Copyright 2005 RAND Corporation, Santa Monica, CA