Oil shale economics

Oil shale economics deals with the economic feasibility of oil shale extraction and processing. Although usually oil shale economics is understood as shale oil extraction economics, the wider approach evaluates usage of oil shale as a whole, including for the oil-shale-fired power generation and production of by-products during retorting or shale oil upgrading processes.[1]

The economic feasibility of oil shale is highly dependent on the price of conventional oil, and the assumption that the price will remain at a certain level for some time to come. As a developing fuel source the production and processing costs for oil shale are high due to the small nature of the projects and the specialist technology involved. A full-scale project to develop oil shale would require heavy investment and could potentially leave businesses vulnerable should the oil price drop and the cost of producing the oil would exceed the price they could obtain for the oil.

Due to the volatile prices and high capital costs few deposits can be exploited economically without subsidies. However, some countries, such as Estonia, Brazil, and China, operate oil-shale industries, while some others, including Australia, United States, Canada, Jordan, Israel, and Egypt, are contemplating establishing or re-establishing this industry.[2][3]

The production cost of a barrel of shale oil ranges from as high as US$95 per barrel to as low US$25 per barrel, although there is no recent confirmation of the latter figure.[4] The industry is proceeding cautiously, due to the losses incurred during the last major investment into oil shale in the early 1980s, when a subsequent collapse in the oil price left the projects uneconomic.[5]

  1. ^ Cite error: The named reference eu was invoked but never defined (see the help page).
  2. ^ Survey of energy resources (PDF) (21 ed.). World Energy Council. 2007. pp. 93–115. ISBN 978-0-946121-26-7. Archived from the original (PDF) on 9 April 2011. Retrieved 13 November 2007.
  3. ^ Bsieco, M. S. (2003). "Jordan's Experience in Oil Shale Studies Employing Different Technologies" (PDF). Oil Shale. A Scientific-Technical Journal. 20 (3 Special): 360–370. doi:10.3176/oil.2003.3S.09. ISSN 0208-189X. S2CID 55086611. Retrieved 8 November 2007.
  4. ^ IEA (2010). World Energy Outlook 2010. Paris: OECD. pp. 165–169. ISBN 978-92-64-08624-1.
  5. ^ Krauss, Clifford (11 December 2006). "The Cautious U.S. Boom in Oil Shale". New York Times. Archived from the original on 12 July 2022. Retrieved 9 November 2007.