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<br />Summary xi <br /> <br />and environmental data required for the design and permirring of a first-of-a-kind <br />commercial operation. At least an additional six to eight years will be required ro <br />permit, design, construct, shake down, and confirm performance of that initial com- <br />mercial operarion. Consequently, at least 12 and possibly more years will elapse <br />before oil shale development will reach the production growth phase. Under high <br />growth assumptions, an oil shale production level of 1 million barrels per day is <br />probably more than 20 years in the future, and 3 million barrels per day is probably <br />more than 30 years into the future. <br /> <br />The Strategic Significance of Oil Shale <br /> <br />If the development of oil shale resources results in a domestic industry capable of <br />profitably producing a crude oil substitute, the United States would benefit from the <br />economic profits and jobs created by that industry. Additionally, oil shale production <br />will likely benefit consumers by reducing world oil prices, and that price reduction <br />will likely have some national security benefits for the United States. A hypothetical <br />shale oil production rate of 3 million barrels per day was assumed for the purpose of <br />calculating consumer benefits. <br />Economic Profits. If low-cost shale oil production methods can be achieved, <br />direct economic profits in the $20 billion per year range are possible for an oil shale <br />industry producing 3 million barrels per day. Through lease bonus payments, royal- <br />ties on production, and corporate income taxes, roughly half of these profits will <br />likely go to federal, state, and local governments and, thereby, broadly benefit the <br />public. <br />Employment Benefits. A manifestation of the economic benefits of shale oil <br />production is an increase in employment in regions where shale oil production <br />occurs or in regions that contain industries that provide inputs to the production <br />process. A few hundred thousand jobs will likely be associated, directly and indi- <br />rectly, with a 3 million barrel per day industry. The net effect on nationwide <br />employment is uncertain, however, because increases in employment arising from <br />shale oil production could be partially offset by reductions in employment in other <br />parts of the country. <br />Reduced World Oil Prices. Production of 3 million barrels of oil per day from oil <br />shale in the United States would likely cause oil prices to fall by 3 to 5 percent, but <br />considerable uncertainty surrounds any calculation on hiOw large the effect might be, <br />especially when trying to model the behavior of the Organization of the Petroleum <br />Exporting Counrries (OPEC) and other major suppliers far into the future. Assum- <br />ing a 3 to 5 percent fall in world oil prices, the resulting benefits to consumers and <br />business users in the United States would be roughly $][5 billion to $20 billion per <br />year. <br />