With all the talk of peak oil we forget that what it really means is peak cheap oil. There are plenty of non conventional sources of oil in the form of oil sands and oil shale. The United States has at least a trillion barrels worth of oil in the form of oil shale. Could high oil prices turn out to be a boon to the U.S. economy?
Oil shale contains kerogen which can be extracted and converted to petroleum through pyrolysis. Pyrolysis is distilling by heating in the absence of oxygen. This process is more energy intensive than conventional sources of oil.
There are disadvantages to getting fuel from oil shale. One being the cost. It takes a good deal more effort to get at that oil. This means that unless the price of oil is consistently over 40 dollars a barrel, it is not profitable to get oil this way. Another problem with oil shale is environmental. Strip mining is the traditional method of extracting the oil. This creates an additional cost to repair the damage that was done. Another environmental issue is that more greenhouse gases are made than by extracting conventional oil.
I find it unlikely that oil is going to be going down in price. Demand is just too high and only getting pushed higher. China and India both have developing economies with a billion people each and their appetite for oil is growing stronger. On top of this, supply of conventional oil looks to be peaking. Used to be they could increase capacity to stabilize prices but not anymore. Most oil producing countries are operating at peak capacity with the possible exception of Iraq. I don't see us getting much oil out of Iraq for a good long while.
Environmental issues are likely to be the greatest concern. There may be a few solutions to reduce environmental damage. One is the use of in situ techniques rather than strip mining. In this process, holes are drilled and heating elements are placed in the soil. The shale is heated right where it is over a period of years causing the oil to seep out and collect underground where it can be pumped out. The problem with this is that there is the possibility of contaminating the groundwater. There may be solutions to this as well. Shell has been working on using an icewall to keep any oil from leaking out and contaminating surrounding areas.
Royal Dutch Shell has been doing some interesting research into getting oil from oil shale. Check out their Mohagony Research Project. They claim their process is profitable with oil at 30 dollars a barrel. They are using an in situ process that uses an icewall to minimize environmental damage. It looks very promising.
With in situ, I think it is possible to use renewable energy such as wind to create the electricity needed to power the heating elements and refrigeration units. I don't see any reason why this can't be done to reduce the greenhouse gases released in the process.
So what does this all mean for the United States? Should large scale extraction of this resource take place, the United States not only could be energy self sufficient, it could be an oil exporter. Shell is still in the research stage and they are scheduled to make a decision on whether to commercialize the technology in a few years. And once they make the decision, how long until they are able to drill, put in the heating elements, heat the rock for a few years, and then finally pump out oil? In the meantime, we are likely to be hurting from high oil prices.