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Question:  Explain the potential of Shale Oil reserves in handling the global demand for crude oil. Discuss the challenges involved in developing shale oil exploration industry.


Answer:  Shale oil is also known as ‘Tight Oil’ as it is found in smaller and deeper reserves than conventional oil reserves. US and Russia are pioneers of shale extraction industry. They are one of the largest producers of shale oil.

Shale oil

  • Shale oil is found in deep underground rocks in small amounts, requiring specialized technique in extraction.
  • The shale oil reserves are isolated patches and do not occur as continuous source like crude oil
  • The recovery of shale reserves require fractures in oil and gas rich shale for obtaining the hydrocarbons through a process called hydraulic fracking.

Role in handling global demand

  • Keep crude prices in check
    Lower production and supply of crude oil has skyrocketed prices. Many countries have been suffering due to this phenomenon. Shale oil will keep demand and supply in check.
  • Reduce import bill
    The cost of imports of crude oil is a burden on economy. Availability of domestic shale oil can avoid the need for importing large amount of crude.

Challenges involved

  • Environmental pollution
    Shale oil extraction process can cause groundwater sources to become polluted. In addition, the vegetation of the region has to be cleared.
  • Cost of extraction
    In fracking process Earth’s interior rocks are opened and widened by injecting water, chemicals, and sand at high pressure. This reduces commercial profitability.
  • Greenhouse emissions
    The process of refining shale oil into petroleum fuel emits large amount of greenhouse gases. This enhances the carbon concentration in atmosphere.

Thus, shale oil industry becomes profitable only if cost of crude petroleum oil goes very high. Shale oil is a suitable alternative to petroleum crude.

Updated on 23 Nov 2021 |   Added on .22 Nov 2021  |  by admin