Oil Shale

Oil shale is an interesting thing. Like the oil sands which are being converted to crude in Canada, oil shale also requires high prices to be profitable. At the current prices, it would be plenty profitable. In fact, the United States has the highest known oil shale reserves in the world, an estimated 1 to 1.2 trillion barrels of oil. That's more than the Middle East has in crude reserves. So what is the hold up? From Wikipedia's article on oil shale:

During the oil crisis of the 1970s, people thought that oil supplies were peaking, expected oil prices to be around seventy dollars a barrel for some time to come, and invested huge amounts of money in refining oil shale — money that they lost. Because of the astronomical sums that were lost last time around there is considerable reluctance to invest in oil shale this time around. Investors are waiting to see if oil prices really will remain this high (in April 2006: US$75). Prices are rising because of increased demand in rapidly developing countries, particularly China. Will high prices stimulate the discovery of more oil, as happened in the seventies, or will alternatives to drilling for oil have to be developed? Investors, burnt badly in the 1980s for their enthusiasm of the seventies, are in no hurry to develop oil shale. Those who lost money then are inclined to believe that more oil will be found in the near future, although the increasing resource nationalism in producer countries such as Venezuela and Bolivia mean resources in those countries will be off-limits to Western oil and gas companies.

You know what? Investors got burned by ethanol in the 1970's, too, and that hasn't stopped them from pouring their money back into that even shakier energy source. There is either a component to the recovery of crude from oil shale that isn't being acknowledged (environmentalism, anyone?), or those in the know that the current high oil prices are only temporary, or we're just plain stupid for not tapping this resource.