Oil shale from Messels mine, Germany
Oil shale, also known as kerogen shale, is an organic-rich fine-grained sedimentary rock containing kerogen (a solid mixture of organic chemical compounds) from which liquid hydrocarbons called shale oil can be produced.
As of 2009, 80% of oil shale used globally is extracted in Estonia, mainly due to the Oil-shale-fired power plants. According to the World Energy Council, in 2008 the total production of shale oil from oil shale was 930,000 tonnes, equal to 17,700 barrels per day (2,810 m³/d), of which China produced 375,000 tonnes, Estonia 355,000 tonnes, and Brazil 200,000 tonnes. In comparison, production of the conventional oil and natural gas liquids in 2008 amounted 3.95 bln tonnes or 82.12 mln barrels per day.

In October 2012, the Russian Institute AEP (St. Petersburg) completed for Uzbekneftegaz the construction of $600 mln plant in the Sangruntau field having the capacity to process 8 mln tons of oil shale and produce 1 mln tons of oil a year. Uzbekistan will become so the first Central Asian country to start mining oil shale.

Back in 2010, Uzbekneftegas and Uzbek government agencies signed several agreements with Japanese companies to develop the country’s oil shale reserves – estimated at around 47 bln tonnes. The Japan Oil, Gas & Metals National Corp (JOGMEC) signed an agreement with Uzbekneftegaz and Uzbek government agencies to explore two oil shale deposits. Two other Japanese companies, JGS and Technopian, announced plans to evaluate the feasibility of shale deposits.

According to the BP Statistical Review of World Energy, 2012, Uzbekistan’s oil production has been in steady decline for more than a decade, falling from 171,000 barrels per day (b/d) in 2001, to 125,000 b/d in 2006 and dropping to just 86,000 b/d by 2011. Meanwhile, oil consumption was up by 0.7% in 2011 to 91,000 b/d. Natural gas production has fluctuated between 52 bln and 63 bln m³ for the last decade, with 57 bln m³ produced in 2011, of which 49.1 bln m³ was consumed domestically.

Due to the volatile prices and high capital costs few deposits can be exploited economically without subsidies. However, some countries, such as Estonia, Brazil, and China, operate oil-shale industries, while some others, including Australia, USA, Canada, Jordan, Israel, and Egypt, are contemplating establishing or re-establishing this industry. The production cost of a barrel of shale oil ranges from as high as US $95 per barrel to as low $25 per barrel, although there is no recent confirmation of the latter figure. The industry is proceeding cautiously, due to the losses incurred during the last major investment into oil shale in the early 1980s, when a subsequent collapse in the oil price left the projects uneconomical.

Moreover, development of oil shale resources requires significant quantities of water for mine and plant operations, reclamation, supporting infrastructure, and associated economic growth. Above-ground retorting typically consumes between one and five barrels of water per barrel of produced shale oil, depending on technology.