Shale Oil Nears Competitive Level with Domestic Petroleum

Abstract

Introduction Advancements in oil shale technology, coupled with the sharply rising expense of finding and producing petroleum in the United States, have closed the economic gap between the two fuels. A realistic comparison of shale oil and petroleum costs presents certain problems, for the real meaning of posted crude prices is difficult to ascertain. Marginal crude-producing areas, discovered before the steep rise in exploration and producing costs of the past dozen years, are now being exploited. This report briefly reviews technical activities in oil shale and presents discussion and comparisons of shale oil production economics with crude petroleum prices. Review of Technical Activities Production of oil from shale has been an art and science in various parts of the world for more than a century. In the United States, prophecies of acute domestic petroleum shortages have been made periodically throughout this century. Previous flurries of activity in shale have soon diminished because of economic facts of life. Present efforts in shale development are the most significant to date and may finally indicate serious entry into the field - again because of economic facts. Foremost among current and recent publicized oil-shale activity have been the multimillion-dollar project of the Union Oil Co. of California at Grand Valley, Colo.; the U. S. Bureau of Mines installation at Rifle, Colo., from 1944 to termination of that program in 1955; and the pilot plant retorting work being carried out by the Denver Research Institute (DRI) for the past several years. Most major oil companies hold oil shale land and represent varying degrees of interest and effort within their own organizations. Brazil has vast shale deposits and produces only 30 to 40,000 B/D of petroleum within her own borders - about 20 per cent of present controlled requirements. Most current development work is directed toward the retorting phase of oil shale processing. USBM's mining work at Rifle is generally accepted as having adequately demonstrated that step to furnish basic information. Modern refining technology is such that shale oil can be processed to desired end products using processes with results and costs that are reasonably predictable.