From Walter Youngquist's "Geodestinies", Chapter 27
Myth:
There are billions of barrels of oil which can be readily recovered from oil shale in the U.S.
As the United States has the world's largest and richest deposits of oil shale, the optimistic statements which sometimes arise from that fact are among the more commonly heard in regard to the U.S. energy future. An enthusiastic article about oil shale in the prestigious Fortune magazine is titled: "Shale Oil is Braced for Big Role." It concludes, "Shale oil is not the whole answer to the energy problem but it's one of the few pieces that is already within the nation's grasp."(l9) The article was written in 1979. As of 1997 no oil from oil shale is being produced in the U.S.... or anywhere else.
Reality:
The supposedly great prospects for the production of oil from oil shale in the United States has been one of the most widely promoted and heard energy myths for many years. Statements even made by government agencies can be quite misleading. These arise perhaps because it is good government policy to take as optimistic view as possible toward any national problem. The statements also are due to a less than careful examination of the facts, and perhaps a bit of promotion for the agency involved. The statement is made by a U.S. government organization that "...using demonstrated methods of extraction, recovery of about 80 billion barrels of oil from accessible high-grade deposits of the Green River Formation is possible at costs competitive with petroleum of comparable quality."(l2) This is a clear misstatement of the facts. At the time it was written (1981) there had been no demonstrated methods of oil recovery at costs competitive with oil of comparable quality, nor have there been any such methods demonstrated to this date. A variety of processes have been tried. All have failed. Unocal, Exxon, Occidental Petroleum, and other companies and the U.S. Bureau of Mines have made substantial efforts but with no commercial results. A state government agency issued a pamphlet on oil shale stating, "The deposits are estimated to contain 562 billion barrels of recoverable oil. This is more than 64 percent of the world's total proven crude oil reserves."(29) The implication here is that the oil which could be "recoverable" could be produced at a net energy profit as if it were barrels of oil from a conventional well.
The average citizen seeing this statement in a government publication is led to believe that the United States really has no oil supply problem when oil shales hold "recoverable oil" equal to "more than 64 percent of the world's total proven crude oil reserves." Presumably the United States could tap into this great oil reserve at any time. This is not true at all. All attempts to get this "oil" out of shale have failed economically. Furthermore, the "oil" (and, it is not oil as is crude oil, but this is not stated) may be recoverable but the net energy recovered may not equal the energy used to recover it. If oil is "recovered" but at a net energy loss, the operation is a failure. Also, the environmental impacts of developing shale oil, especially related to the available water supply (the headwaters of the already over used Colorado river), and the disposal of wastes, do not seem manageable, at least a the present time, and perhaps not all.
The clear implication of both of these government statements is that oil shale is a huge readily available source. Because of the enormous amount of "oil" which has been claimed that could be recovered, this gives a large sense of energy security which does not exist. For this reason it is a particularly dangerous myth.
Myth:
Canada's oilsands with 1.7 trillion barrels of oil will be a major world oil supply
It appears to be true that in the Athabasca oilsands and nearby related heavy oil and bitumen deposits of northern Alberta there is more oil than in all of the Persian Gulf deposits put together.
Reality:
The impressive figure of 1.7 trillion barrels of oil is deceiving. It is likely that only a relatively small amount of that total can be economically recovered. The oil is true crude oil but it cannot be recovered by conventional well drilling. Almost all of it is now recovered by strip mining. The overburden is removed and the oilsand is dug up and hauled to a processing plant. There the oil is removed by a water floatation process. The waste sand has to be disposed of.
Much of the oilsand is too deep to be reached by strip mining. Other methods are being tried to recover this deeper oil, but the economics are marginal. With the strip mining and refining process now in use, it takes the energy equivalent of two barrels of oil to produce one barrel. To expand the strip mining operation to the extent which could, for example, produce the 18 million barrels of oft used each day in the United States would involve the world's biggest mining operation, on a scale which is simply not possible in the foreseeable future, if ever. Canada will probably gradually increase the oil production from these deposits, but until the conventional oil of the world is largely depleted these Canadian deposits are likely to represent only a very small fraction of world production. The production will always be insignificant relative to potential demand. Oilsands are now and will be important to Canada as a long-term source of energy and income. But they will not be a source of oil as are the world's oil wells today.
EDIT
http://www.cooperativeindividualism.org/youngquist_geodestinies2.html