What is 'Oil Shale'

Oil shale is a sedimentary rock formation containing kerogen, a type of organic matter that yields oil and gas. The difficulty inherent in recovering petroleum from oil shale has traditionally made resources containing it unconventional plays in the oil and gas industry.

BREAKING DOWN 'Oil Shale'

The term shale covers a variety of sedimentary rock formations containing a combination of clay and other minerals. To be considered an oil shale, a formation must contain enough bituminous materials to produce flammable, petroleum-like liquids. In general, rocks mined from an oil shale formation will burn without further processing.

Recovery of oil shale typically involves either surface or sub-surface mining to extract the minerals, which then get shipped elsewhere for additional processing. Some patents exist for processing methods that take place without mining the minerals first, known as in situ retorting. The use of these methods is currently limited and most in situ processes appear to be experimental in nature at this time.

The Green River Formation in Colorado, Utah and Wyoming hosts the largest known deposits of oil shale in the world. Historically, however, Estonia has processed the majority of the oil shale extracted worldwide, predominately for use in power plants. Substantial oil shale resources also exist in China, Russia and Brazil.

Shale became a strategic asset during the Second World War, when the United States sought a more secure source of oil. Commercial development began in the 1960s, but the difficulty of extracting and producing oil from shale made it a less attractive resource compared to oil from conventional wells.

Oil shale became more popular during the oil crisis of the 1970s, when high prices briefly made it economically viable in comparison to more conventional plays. Reductions in oil prices in the early 1980s reduced corporate interest again until the early 2000s, when declining global reserves of conventional oil began to drive renewed interest in unconventional plays.

Oil shale compared to shale oil

Note that oil shale differs from shale oil, which refers to pockets of gas or liquid petroleum that occur within shale formations, such as the Bakken formation in North Dakota, Montana, Saskatchewan and Manitoba. Hydraulic fracturing and other unconventional drilling techniques allow access to shale oil reserves, whereas the petroleum in oil shales remains embedded in the rock itself after mining, absent further processing.

Environmental impacts

Extracting oil shale deposits has been criticized for harming the environment. In addition to the impact of mining on the landscape, most processes use a significant amount of water and introduce pollutants into both air and surface water. Processing oil shale is also energy-intensive, contributing to carbon dioxide emissions.

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