While that prediction is yet to come true, The Slug suspects that it is circling out there waiting for the right opportunity to land, because elsewhere in the world it seems that shale oil is once again being taken very seriously.
A series of recent developments are examples of what’s going on in the collective minds of Big Oil and Big Government – and surely in the minds of the chaps in Texas who own Queensland’s shale deposits.
In China, the world’s fastest growing oil market, Shell has made its return to the shale oil business via deal with locals in the Jillin Shell Oil Shale Development Company.
In the US, Shell has been joined by Chevron and ExxonMobil in applying for recently released Federal land in the west of the country that might be suitable for shale oil extraction.
According to what The Slug has read, the Chinese venture sees Shell holding a 61% stake in the project which will apply a technology for oil extraction from rock which has been developed by Shell.
The new technology will complement an existing Chinese shale oil industry centred on the city of Fushun, a place best known for its coal production.
In 1992, Fushun also became home to a shale oil production facility using 60 retorts to “boil down” rock to extract oil. Production is said to be running at 60,000 tonnes of oil a year from the project – but, significantly, it’s hard to find any comments on the project’s commercial viability.
Presumably, the arrival of Shell will see a hard-nosed approach to the questions of how best to get the oil out of the shale, and how to do so at a profit.
Across the Pacific, the US shale game is at a much less advanced, but equally interesting, stage with the release of Federal lands for shale exploration and development.
The Bureau of Land Management said it had received 10 shale oil applications in Colorado, including three from Shell and one each from ExxonMobil and Chevron.
The game is the same as that played unsuccessfully in Australia through the 1970s and into the 1990s by Southern Pacific Petroleum and Central Pacific Minerals – find an oil-rich shale deposit, then find a profitable way to get the oil out.
But this time around, armed with more advanced technology, and backed by an oil price sitting comfortably around the $US60 a barrel mark, there might be a variation in the way the game ends.
Rather than fail miserably, because of technical hitches and a sliding oil price, it is possible that oil from shale will become a viable business in the US, and in China where local markets are desperate for increased supplies of oil.
In Australia, the game is slightly different – but not by much. The objective here is not so focused on producing oil for local consumption as it is to produce oil for export.
But, this subtle variation should not dim the fact that shale is making a return to the world stage, like uranium. And the country with a lot to offer the world (and itself) is Australia if anyone can find the time and the money to re-visit the great shale deposits of Queensland.
The Slug, always ready with a prediction, reckons that oil at $US60 a barrel could be the trigger for a re-awakening of Stuart, Condor and the other shale deposits sometime soon.
