I believe Shell’s issue in Oil Shale is not so much techical as it is economics, politics and social acceptance.
Estonia has used Oil Shale for fuel for decades.
Brazil has been in Commercial Operations since 1992, see Petrosix for more info.
China has been operating Oil Shale for some years as well.
These all use above ground retorting combined with mining the shale like coal.
Shell has been focused on the most return for in-situ operations, partly I believe for political and social acceptance. Most of the US shale reserve are on federal land. There are some thin, low value oil shale in the Midwest, but there economics would be challenging. Green River formation would have the best returns.
“I believe Shell’s issue in Oil Shale is not so much techical as it is economics, politics and social acceptance.”
That enhances my argument further.
I dwelt on the technical obstacles in order not to slight them as a reason for the slow progress and cautious approach by Shell. After all, technical obstacles are removed only as fast as the technology progresses, and technological progress isn't dictated by outside schedules.
But now you're saying that the technical issues are less of an obstacle than I thought.
If there are few, if any technical issues, then Shell's big obstacles are political - getting the government to let them do their thing, and economic - making sure that it's profitable.
Which returns us back to the caution that Shell has taken because they produce oil in an environment where oil prices are heavily influenced players who don't abide by free market rules.
It was a few years ago when I read this stuff, but it was eye-opening. As you pointed out, capital IS limited, and Shell was quite explicit in what I read about how that would affect their production of oil from shale. Even assuming world oil prices that allowed for them to produce the oil profitably, a modest difference in world oil prices accounted for a doubling of production.
In other words, if Shell assumed a price of around $50 (I think that was roughly the number), it meant that they would produce X amount of oil from the shale in Y years (I think it was the better part of a million barrels a day, but I'm working from memory). On the other hand, a sustained price level of something like $65 per barrel meant they would ramp up to 2X amount of oil in Y years (which was well over a million barrels per day).
In a free market, worldwide, we'd be happy with this sort of thing, because producers could make rational economic analyses, make their plans based on them, and the market would produce sufficient amounts of energy products, of the right sorts, in the right amounts, at competitive prices.
But because the world market for oil is largely unfree, the analyses on which these guys need to make their plans are inherently less reliable and a good deal more complicated. Because their analyses are less reliable, companies like Shell must act more cautiously. And that reduces what they might have otherwise produced, keeps supplies tighter, and keeps costs higher.
And that says nothing about the costs that aren't directly economic. It doesn't deal at all with the fact that the current market makes Saudi jihadists, Nigerian scammers and kleptocrats, and Venezuelan thugs geopolitically important folks with geopolitically important lands, and gives them the funds to seek starkly anti-American policies, and forces us to have to care what happens in places like Iraq or Iran or Saudi Arabia (and even peripherally, about non-oil states like Afganistan). It doesn't deal at all with the fact that our own policies are constrained by our continued need for hundreds of millions of dollars of their products daily, and our need, then, to give large sums of money daily and make nice to those who would just as soon cut our throats.
Obviously, reducing the obstacles set in place by our own government is critical to increasing domestic energy production.
But we're only a part of the worldwide market, and the government intervention and outright control of oil by oil-producing countries puts us at a disadvantage if the only thing we do is reduce the obstacles to domestic production set in place by our own government.
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