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Oil shale is a term used in the oil industry to describe rocks that contain organic material that can be and has been used as a source of energy. Oil Shale is not the same as shale formations that contain oil (and natural gas) such as the Barnett Shale. It is critically important to understand that oil and gas cannot be extracted from Oil Shale. Why? Because Oil Shale does not contain oil, it contains Kerogen, which is a substance that is itself a mixture of various organic chemical compounds.
An oversimplified way of understanding what Oil Shale is and why it doesn't have oil in it would be to explain that it represents an accumulation of organic matter that would have ended up becoming "cooked" into conventional oil and natural gas, if, it had been subjected to a different geological history that would have generated sufficient high temperatures and pressures for long enough to change the Kerogen chemically into oil and gas. Oil Shale didn't make it into oil and gas, at least not yet, in geological history.
Once an investor understands that Oil Shale does not contain oil, the other important concept to understand is that oil shale has an unfavorable EROEI, otherwise known as "net energy." This means that with current technology you must put more energy into the Oil Shale energy extraction process than the energy you can get out, which in a certain sense is a type of energy Ponzi scheme.
However, oil and natural gas can be manufactured from the Kerogen in Oil Shale, although not at commercial scales as of yet, and several hundred patents have been issued for various Oil Shale processes. 
The term "Oil Shale" is somewhat unique in that it is a "double misnomer," meaning that both words that make up the term are inaccurate because Oil Shale does not contain oil and is usually not a shale. In fact, Oil Shale rocks are often technically classified by geologists as sandstones.
Estimates of the volume of worldwide deposits of organic material in oil shales have been made at around 2.8-3.3 Trillion barrel of oil equivalents. The extremely large volume of Kerogen in Oil Shale deposits on Planet Ocean means that Oil Shales cannot be overlooked when considering sources of energy to replace the world's current dependence upon conventional oil/ natural gas and coal.
Shale Oil and Shale gas produced from Oil shales are significantly more expensive than conventional oil and gas because most processes involve complex, capital intensive mining methods rather than relatively inexpensive drilling methods due to the fact that Kerogen is too viscous to flow into wells and through production piping. Although a certain percentage of Oil Shale deposits can be accessed using traditional mining methods like surface pit mining, strip mining and even room and pillar mining, much of the world's Oil Shale deposits will need to be developed using complex and expensive "in-situ" mining methods.
Any technology, such as perhaps nanotechnology, that could overcome the geological, chemical, hydraulic, economic and political barriers related to Oil Shale would offer the world access to a very large supply of energy and create an attractive investment. The possibilities and limitations of nanotechnology are too new to analyze in relation to Oil Shale in 2009.
In-situ processes are extremely time consuming and expensive because huge amounts of time (2-3 years to heat the rock ) and huge amounts of energy must be used to produce enough of the electricity that must be used to heat the Oil Shale rocks hot enough (650C-700C) to extract the normally highly viscous Kerogen. Since many of the patented Kerogen extraction processes utilize high-pressure steam, huge amounts of water are also required. In addition, groundwater contamination from fluids produced in the in-situ process is of serious concern. One in-situ process being tested by Shell attempts to freeze groundwater surrounding areas where Oil Shale is to be heated by electric heaters. Highly toxic ammonia gas is intended to be used as the cooling fluid which presents other risks of contamination of groundwater and atmospheric releases.
Attempts to derive commercial-scale quantities of energy from Oil Shale have failed in the 1920's, 1950's and 1970's, although Oil Shale plants have been operational in both Estonia and China for many years. The community of Rifle, Colorado was the victim of the failure of an Oil Shale production attempt that ended in the loss of over 2000 jobs one Sunday and the corresponding impact on the community. One of the world's largest oil shale projects attempted so far was merely a "technology demonstration" site operated from 2001-2003 in Gladstone, Queensland, Australia that produced 703,000 barrels of oil but was not analyzed for EROEI.
Finally, large releases of greenhouse gases are expected at sites attempting to process Oil Shale, with the corresponding potential impact to Global Warming.
As a result, oil and natural gas manufacturing from Oil Shale would only be profitable, and the related environmental impacts would only be acceptable, when market prices for both oil and gas are high and remain high and free from current 2008-2009 market volatilities. How high, nobody knows, because nobody has successfully produced commercial quantities of oil and or gas from Oil Shales (as reported by the U.S. Government's "Oil Shale and Tar Sands Programmatic Environmental Impact Statement Website" ). Recent March 2009 estimates of the oil prices necessary to make unconventional oil economically feasible are about $90 USD per barrel and therefore, Oil Shale economics would be expected to fall into that range or higher.
Shale Oil can be misunderstood and has been misreported in news reports and misrepresented in investment scams, especially phony private placements. Claims have been made for more than 20 years that Oil Shale promises to "free" the US from the importation of foreign oil and gas, and that Oil Shale deposits in the US exceed the oil reserves in countries like Saudi Arabia. However, these claims fail to explain the difference between expensive "unconventional" oil and gas produced from oil shale, which cannot be profitably extracted at current prices, and "conventional" oil and gas sources, which can.
There is a current "oil rush" in several parts of the United States. Technology to extract the oil from formations has been improved, and is has a break even point at about $40/bl. A number of oil exploration companies are currently extracting oil using horizontal drilling, with production as much as 50,000 barrels per day per hole.
Oil Shale should not be confused with "Tar Sands" which actually contain oil that can, and is, extracted.
Shell Oil Company continues to work on a Oil Shale project in Utah but has not solved the economic or environmental challenges that would make oil shale energy development feasible.
Investors would be wise to understand the distinction between conventional and unconventional oil and gas sources when analyzing investments in companies. Oil shale deposits require advanced technologies that usually involve mining and are, therefore, considered by the industry and the SEC as unconventional when compared to the conventional oil and gas production technology of drilling a well.
The following articles discuss investments in types of shale that are considered conventional and are not examples of oil shale.