ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel
  • »
  • Politics and Social Issues»
  • Energy Issues

Oil From Shale Costs

Updated on May 28, 2012
Oil Shale mining
Oil Shale mining

According to a 2004 U.S. Department of Energy report, the United States is home to two trillion barrels of the world’s estimated 2.6 trillion barrels of shale oil. Almost all of the U.S. shale is found in the Green River Basin in Colorado, Utah, and Wyoming. The Bakken oil shale discovery increases this to North Dakota and Alberta, Canada, Sitting under Nevada, east of Las Vegas, an estimated of four billion barrels of oil sit, much of it as "black gold" not shale. With so much oil in the USA, why does America depend on Saudi Arabia?

That is the million dollar question.

It costs. That is the short answer. It is cheaper to get from OPEC. Obtaining oil from shale rock is costly and it is only cost effective for companies if the price per barrel stays above $75 a barrel. Unlike cheaper oil wells that pump out the liquid, shale rock mining is incredibly expensive from $5 to 10 million a well. Recovering shale oil also has the potential to contaminate ground water and produce toxic waste. One method is to burn the shale to get the oil, but this creates too many pollutants. New technology involves various methods of heating the oil in the shale rock so that it becomes liquid and then pumping it out.. This way, the mining of the shale rock is avoided and its excavation not needed, which create huge environmental issues. There is also natural gas to be mined. Total US recoverable natural gas resources (includes conventional, unconventional in lower 48, Alaska and offshore) totals 4.244 quadrillion cubic feet. That is enough natural gas to meet US electricity demand for 575 years, enough natural gas to fuel homes heated by natural gas in the United States for 857 years, and more natural gas than Russia, Iran, Qatar, Saudi Arabia, and Turkmenistan combined!

In Southern California, is the largest shale oil formation estimated to hold 15.4 billion barrels or 64 percent of the total shale oil resources followed by Bakken (North Dakota, Canada) and Eagle Ford (Texas) with approximately 3.6 billion barrels and 3.4 billion barrels of oil,

Another frequent method to obtain shale oil is fracking. The use of fracking to access deep shale formations requires millions of gallons of fresh water, acres of land per well pad, and the use of undisclosed chemicals. It is labor intensive and riddled with dangers to the local environment. Many communities near shale oil or gas sites have numerous laws controlling this, which companies are forced to deal with. Companies who want to oil shale\gas are forced to spend millions more to insure public dangers do not exist and reclamation of the land is done.

Another problem facing extraction are geologic rock formations that complicate drilling and extraction. In Nevada, a few companies are drilling exploratory wells down to 5000 ft. and come up dry. These wildcat wells can cost upwards to $100,000 per well because of the remote locations where oil deposits seem to be. Simply getting the infrastructure up and running, transporting, personnel out in the middle of nowhere and few roads are part of the whole issue. Until the exploration wells pay off, the investment is in the red.


    0 of 8192 characters used
    Post Comment

    • perrya profile image

      perrya 5 years ago

      makes sense! Thanks!

    • tirelesstraveler profile image

      Judy Specht 5 years ago from California

      This makes a good case for drilling in Anwar. They have done the excavation and know the oil is there. The Alaskans want the jobs.

      In California it isn't unusual to find little globs of oil on beaches. It is estimated that 175,000 barrels of oil oozes from the ocean floor a month. There was a housing track in Long Beach where they built on oil fields. They had to go back and put barriers into foundations to keep the oil from seeping into the houses. (Signal Hill) Because of environmental issues California hasn't drilled for oil off the coast in 30 years.

      There are oil derricks half mile off Long Beach that have palm trees and look like oasis.

      My point is there seems to be ways to produce oil in our great country. Someone just needs to come up with the "How" so people will not get all riled.

    • perrya profile image

      perrya 5 years ago

      One of the better companies in Bakken, Occidental Petroleum, has diverted some of its attempts there for more profitable wells in Texas and California because of soaring costs in getting one well going. As oil drops per barrel, the less incentive there is to deal with oil from shale rock.

    • bankscottage profile image

      bankscottage 5 years ago from Pennsylvania

      Great Hub Perrya. The short term cost of oil is cheaper from OPEC. Unfortunately, that doesn't take into account the longer term cost, dependence on foreign oil. I believe Brazil that has obtained energy independence. That is what the long term goal of the US should be. We should be a net exporter of oil and gas.

    • the girls profile image

      the girls 5 years ago from Los Angeles, California

      Thank you for writing this hub Perrya! There are already two giant steel companies building factories in the east coast to prepare for this multi-billion shale fracking industry. Hope the environment and welfare of the personnel will never be overlooked while chasing the almighty dollar and saving the world economy from high gas prices.

    • mecheshier profile image

      mecheshier 5 years ago

      A great Hub. Very informative information that more people need to know about. I look forward to reading more of your Hubs. Vote up for useful. Thank you.