There’s a lot of talk about the booming shale oil industry in North America, but this would be more accurately referred to as tight oil, which is crude oil from oil-bearing shales.
Shale oil can also refer to another unconventional oil that is produced from oil shale. Industrial processes can extract the organic matter from this and convert it into oil or gas, which can then be used directly as a fuel or upgraded for use as feedstock in the petrochemical industry.
Shale oil actually has a long history, with the earliest recorded use being in Austria and Switzerland in the 14th century. It was also used for street lighting in Modena, Italy in the 17th century. The first industrial processes were introduced in the mid-19th century in France and Scotland, where Scottish chemist James Young developed a method to distil paraffin from oil shale. Despite facing cheap petroleum imports from the Middle East in the early 20th century, the Scottish oil shale industry persisted until 1962.
The United States also had a thriving oil shale industry in the 19th century, and shale oil was regarded as the norm rather than unconventional oil. The situation reversed after the Drake Well hit oil in 1859. With cheap petroleum flooding the market, lamp oil refiners switched to this new, cheaper raw material.
Despite hosting the world’s largest oil shale resource, the US has never had a viable oil shale industry since then. Over the course of the 20th century, high oil prices have periodically triggered renewed interest in shale oil in the US. Unfortunately for the industry, high oil prices also led to increased exploration for new crude oil reserves, and higher crude production inevitably led to lower prices killing off shale oil each time.
High production costs have always been an issue for shale oil. Oil needs to be extracted from oil shale through pyrolysis, hydrogenation, or thermal dissolution, so the energy needed for extraction offsets some of the energy value of the recovered oil. Most shale oil is currently produced by mining shale and processing it in a retorting facility, but some experimental in-situ techniques exist. ExxonMobil, which makes Mobil DTE Oil Heavy Medium, developed the Electrofrac process, which involves injecting electrically conductive material into fractures to form an underground heating element.
While the worldwide production of shale oil is currently dwarfed by that of conventional oil, it represents a huge potential resource if improved technology and higher oil prices ever make it economically feasible again.