I was with Shell in the mid eighties in Holland doing a feasibility on an oil shale deposit they had in southern Morocco. When we finished, the capital cost was, in 1986 dollars, hold your breath, $13 billion for a mine and plant to process 160,000 tons per day and produce synthetic crude at a cost of, again, in 1986 dollars, sit down, $40 a barrel. Needless to say, the project died as the 1986 average price for light, sweet crude out of the ground was about $21 a barrel.

The major oil producers got excited about oil shales after the price peaked in 1980 at $68. The price collapsed in late 1985 just like it is doing now. Only got back to $40 in 2004. Some of the companies (like Exxon) shut down the projects in mid construction and walked away from several billion bucks in sunk capital.

Here it is 20 + years later and I would estimate that the capital and production cost now would be at least double what we worked out in 1986. Even with more oil in reserve in shales in the Tri State area of Wyoming, Colorado and Utah than there is in all of the Middle East, you wont be filling your tank with gasoline from shale sourced synthetic crude anytime soon.

Bruce Ferguson

Reno, NV