Oil shale economics

Oil shale is a special rock that contains a lot of oil-like material called kerogen. People want to get this kerogen out of the rock because it can be turned into oil that we can use for fuel.

However, getting the oil out of oil shale is very expensive and complicated. It involves drilling holes in the ground and heating the rock until the kerogen melts and drips out. This takes a lot of energy and equipment, so it costs a lot of money to do.

That’s why oil shale economics is all about figuring out whether it makes sense to spend all that money to get the oil from the rock. Companies have to think about how much oil they can get, how much it will cost to get it, and how much they can sell it for.

If they can sell the oil for a lot of money, it might be worth the cost to get it. But if they can’t sell it for enough money, they’ll lose money on the project. So, they have to make sure that the price they can get for the oil is enough to cover all the costs of getting it out of the ground.

Overall, oil shale can be a tricky business because it’s expensive to extract and the price of oil can change a lot over time. Sometimes, oil shale projects can be profitable, and sometimes they can be a big financial loss.