Earlier this year excitement and promise surrounded the possibilities of developing a domestic oil source through shale oil. Due to the current economic crisis much of these plans have been put on hold. The companies that were initiating these efforts are finding it difficult to borrow funds for their projects. In a November 10th EarthNews article Louis D’Amico, executive director of the Independent Oil and Gas Association of Pennsylvania states:
“We’re seeing people back down on their initial planned development [in the Marcellus] because of the lack of financing, among other issues out there. Companies are taking a conservative approach with their cash flows because they’re finding it difficult to borrow funds.”
While some companies are backing off the development of shale oil due to the economic crisis, there are still those who are cautiously continuing with the development of this domestic energy source. A US News & World Report article dated November 3, 2008 explains companies out West are cautiously continuing with shale development.
Those interested in developing this oil source have many obstacles to face environmentally and financially. Although new technologies may alleviate disruption of the environment surrounding the drilling sites, environmental concerns now center around ground water contamination beneath the surface where the drilling occurs. Also, the process of extracting shale oil requires massive amounts of energy. The bottom line is, if pursued, development of this oil/energy source being commercially produced may not be a realty for the next 10 to 15 years.
As we head in to a new administration, what will happen to the pursuit of domestic oil and energy sources both traditional and alternative? What impact does development of domestic oil sources have on energy independence or energy security? The pursuit of an energy independent America has been promised to us by President-elect Obama. It will be interesting to see in the coming months and years where that pursuit will take us.
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Photo Credit: The Monkey Wrench Dad
Heidi,
You need to make a distinction between shale oil and shale gas. The photo and some of your commentary is related to shale oil which does take a significant amount of energy to extract. The Marcellus shale gas resource, of which Mr D'Amico speaks, and the several other shale gas plays, is a very different subject in terms of both its extraction as well as its cost/benefit analysis.