OIL FROM STONE: SECURING AMERICA'S ENERGY FUTURE
Rising prices and security concerns raise important questions about America's energy options. Currently, the United States imports 66 percent of its oil -- about 4.7 billion barrels per year or 9,000 barrels every minute. However, there are vast amounts of oil shale -- a type of rock rich in kerogen, an organic sedimentary material -- which can be converted into high-quality liquid fuels, says H. Sterling Burnett, a senior fellow, and Tomas Castella, a research assistant, both with the National Center for Policy Analysis.
The U.S. Department of Energy (D.O.E.) conservatively estimates oil shale formations in Colorado, Utah and Wyoming contain 800 billion barrels of recoverable oil, more than three times the proven reserves of Saudi Arabia. Per acre, oil shale is significantly more concentrated than oil and gas on Alaska's North Slope, Alberta's tar sands or ethanol production, say Burnett and Castella:
* Some shale contains more than 1 million barrels of oil per acre (bbl/acre).
* Conventional oil yields about 10,000 bbl/acre.
* Corn yields 10 bbl/acre ethanol.
Domestic oil shale production would provide substantial economic benefits, according to RAND:
* A 3 million bbl/day industry could generate $20 billion in annual profits while reducing prices for consumers.
* As many as 100,000 new jobs could be created by a 2 million bbl/day shale oil industry.
* The D.O.E. estimates that, in addition to tax revenues, federal and state governments would receive royalties and lease payments topping $2 billion a year.
Oil shale production requires more energy than conventional petroleum. However, the D.O.E. reports that it is significantly more efficient than ethanol, and at least as efficient as oil from tar sands. Measuring efficiency by the energy required to produce equivalent output:
* Conventional oil production is 92 percent efficient.
* Depending upon the production method used, oil shale efficiency ranges from 78 percent to 89 percent.
* The efficiency of tar sands ranges from 82 percent to 86 percent.
* At 52 percent, ethanol has the lowest efficiency of comparable motor fuels.
Source: H. Sterling Burnett and Tomas Castella, "Oil from Stone: Securing America's Energy Future," National Center for Policy Analysis, Brief Analysis No. 664, July 9, 2009.
