Shale oil: always a bridesmaid. Forty years of estimating costs and prospects

A review of the various cost estimates associated with American shale-oil development indicates that economic feasibility may be approached a number of times in recent decades. Closer examination, however, shows that these forecasts either ignored significant costs (resource and environmental costs, for example) or neglected competitive aspects of the US energy market, notably the current pricing of alternate fuel sources. Estimates of potential capital costs and selling prices varied several-fold at any one time over the past three decades, with selling price (in $1980/bbl) ranging from about $7 in 1952 to $10 to $15 in 1970 to about $30 to $35 in 1980. Interest in and optimism about prospects for commercial development coincided with successive wars. Illusory economic projections were accompanied by occasional technical and motivational impediments attributable chiefly to insufficient research or fuel gluts, respectively. At times, the greatest constraints were institutional, especially those dealing with government leasing policy and prospects for federal development assistance. Favorable cost estimates, uncertainty about future energy sources, and significant technical advances once again suggest that the time may be right for American shale-oil commercialization. Some institutional roadblocks remain, and precise estimates of potential environmental impacts and mitigation costs remain in dispute. Efforts tomore » initiate production should improve markedly upon previous partial estimates of technical and economic feasibility. History suggests that such verification is much needed to reduce current and past uncertainties. 58 references, 3 figures.« less