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xiv Oil Shale Development in the United States: Prospects and Policy Issues FutUrE! Development Prospects The prospects for oil shale development are uncertain. The estimated cost of surface retorting remains high, well above the record-setting crude oil prices that occurred in the first half of 2005. For surface retorting, it therefore seems inappropriate to con- template near-term commercial efforts. Meanwhile, the technical groundwork may be in place for a fundamental shift in oil shale economics. Advances in thermally conductive in-situ conversion may cause shale-derived oil to be competitive with crude oil at prices below $30 per barrel. If this becomes the case, oil shale develop- ment could soon occupy a very prominent position in the national energy agenda. We are rapidly approaching a critical juncture for oil shale development. On June 9, 2005, the Bureau of Land Management released its Call for Nominations of parcels to be leased for research, development, and demonstration of oil shale recov- ery technologies in Colorado, Utah, and Wyoming. The response to this solicitation will provide a clear signal about whether the private sector is prepared to commit its resources to oil shale development. Government decisionmakers need to wait for that signal. When it is clear that at least one major private firm is willing to devote, with- out appreciable government subsidy, its technical, management, and financial resources to oil shale development, government decisionmakers should address the core policy issues listed above. Key Recommendations Business as Usual. The following are recommended whether or not oil shale is a candidate for early efforts toward commercial production. · Oil shale should be part of the Department of Energy's research and develop- ment portfolio. Significant long-term research opportunities are associated with both surface retorting and in-situ retorting. A benefit of even a small federal program (i.e., a few million dollars annually) would be the continued availabil- ity of a small cadre of scientific and engineering professionals who would be deeply knowledgeable of oil shale development issues. · Consideration should be given to establishing a national oil shale archive that would hold and preserve information on oil shale resources, technologies, and impacts of development. We fear that, with the passage of time, important information will be lost. · Analysis should be directed at lease program implementation options, sllch as combining adjacent lease tracts in a lease oHering and provisions for ensllring or promoting extensive recovery of resources within lease tracts.