Shale Oil Case Study

In the United States, feasibility of extracting shale oil has always been a challenge for the producers. In case, if the price of a barrel of fossil oil is less than the cost price of a barrel of shale oil extraction, that means the production process of shale oil and sell it uneconomical. Production costs vary depending on the oil wells location, ranging from $ 23 to $ 60 and the average is estimated at $ 36. The difference is due to the quality of the rock, the depth of the well, and the cost of transportation, so the shale oil production projects maybe economically viable if the price of a barrel of fossil oil more expensive than the cost of oil shale production. See Table1.

The Competition between the shale and fossil oil are unequal,