New Oil Has Potential
As the earth’s conventional oil supply continues to diminish, the discovery of new fuel types is becoming as important as ever. The Organization of the Petroleum Exporting Countries (OPEC) has recently released a statement stating that global tight oil reserves could produce as many as 300 billion barrels. Tight oil is another name for shale oil, which is a form of light crude oil found in shale deep below the earth’s surface. Although it will most likely be a decade before big supplies of tight oil are produced, the future production could rival the conventional oil production in Saudi Arabia.
Presently, shale oil is only viewed as a marginal addition to the world’s oil production, but is beginning to transform the energy industry in the Midwestern United States and China as well. OPEC claims that there are also known tight oil resources in Australia, Canada, France, and Argentina, and it is likely that these nations will soon begin implementing measures to extract shale oil. Several deposits are already being targeted, but because of the infancy of shale oil production, data is limited and much uncertainty exists. Currently, development costs for shale oil average $30-$80 per barrel, but as the industry develops, it is foreseen that costs will decrease considerably.
The production of shale oil will likely receive criticism from environmentalists over issues like water pollution and seismic activity resulting from deep mining and drilling. Although an alternative fuel source, it is not considered environmentally friendly like many of the biofuels being produced. It will be interesting to see if countries invest in this growing industry and risk creating foreseeable, negative environmental consequences.