The history of the oil shale industry in the United States goes back to the 1850s; it dates back farther as a major enterprise than the petroleum industry. Although the United States contains the world's largest known resource of oil shale, the US has not been a significant producer of shale oil since 1861. There were three major past attempts to establish an American oil shale industry: the 1850s; in the years during and after World War I; and in the 1970s and early 1980s. Each time, the oil shale industry failed because of competition from cheaper petroleum.
As of 2014, there are a number of companies doing research and development on oil shale deposits in Colorado and Utah, but there is no commercial production of oil from shale in the United States.
US oil shale resources
The United States has not had a viable oil shale industry for more than 150 years, yet it contains the largest oil shale resource in the world.
Eastern resources There are two types of oil shale resources in the United States east of the Mississippi River. The first is cannel coal, which was used widely in Kentucky, Ohio, Pennsylvania, and western Virginia (now West Virginia) to manufacture oil during the first American oil shale boom, 1854–1861. The cannel coals have since been largely mined out, and are no longer considered a major oil-shale resource.
The second category of eastern oil-shale resources are the Paleozoic black shales, of lower oil yield, but of much larger size than the cannel coals. Most attention has been given to the shales near the Devonian/Mississippian boundary, which are variously called the Ohio Shale, Chattanooga Shale, the Antrim Shale, and the New Albany Shale.K.F. Rheams and T.L. Neathery, “Characterization and geochemistry of Devonian oil shale, north Alabama – south central Tennessee,” Symposium on Characterization and Chemistry of Oil Shales, American Chemical Society, April 1984.
Western resources
Black shales similar to the eastern shales are widely distributed west of the Mississippi River. These include some, such as the Woodford Shale of Oklahoma, which are near-stratigraphic equivalents to the Devonian/Mississippian shales of the eastern US.
The largest oil-shale resource in the world is contained in the Eocene Green River Formation in Colorado, Utah, and Wyoming in three basins: the Piceance Basin, Green River Basin, and Uinta Basin. The Green River oil shales have been the focus of most efforts of the past hundred years to establish an American oil shale industry.
The Green River oil “shale” is actually a marl, and some beds yield up to 70 gallons of oil per short ton of shale. Estimated in-place resources are capable of generating 4.2 trillion barrels of oil. Although the Piceance basin of western Colorado has the smallest lateral extent of Green River shale, it contains the greatest amount of high-grade shale. Using a cut-off of 25 gallons per ton, the Piceance has about 352 billion barrels of in-place resource.Ron Johnson, Oil-shale overview, US Geological Survey, accessed 11 Jan. 2015.
The Elko Formation of northeastern Nevada is an oil shale, late Eocene to early Oligocene in age. Like the Green River Formation, it contains beds deposited in a lake. Faulting and subsequent erosion have removed most of the original extent of the deposit, leaving isolated bodies of the formation within an area about 100 miles long and 30 miles wide in Elko County, Nevada.Nevada Bureau of Mining and Geology, Oil shale, accessed 16 Jan. 2015.
The Phosphoria Formation of Permian age is present in Idaho, Wyoming, and Montana. Some beds were found to yield more than 25 gallons of oil per ton.D. Dale Condit, Oil Shale in Western Montana, southeastern Idaho, and adjacent parts of Wyoming and Utah, US Geological Survey, Bulletin 711-B.
1850s – the coal oil era America faced a shortage of oil – whale oil. Despite a steadily growing fleet of whaling ships, the American whaling industry could not satisfy the demand for lamp oil; the price had risen considerably, and the country imported increasing amounts of whale oil.
Whale oil was needed as lamp oil for illumination. It burned with a bright, smokeless flame that nothing else was known to match. Chemists had known how to make oil from coal (coal oil) or turpentine (camphene) for many years, but they burned with sooty flames, making them unsuitable for indoor illumination. The only viable competitor to whale oil was “burning oil,” a mixture of camphene and alcohol, which burned bright and smokeless, but which was volatile and prone to explode. Fire insurance policies charged higher premiums for buildings in which camphene-based lamp oil was used.George William Clinton, A Digest of the Reported Decisions in Law and in Equity, of the Courts of New York, v.2 (Albany, N.Y.: Van Benthuysen, 1860) 1735. The city of Lowell, Massachusetts banned the storage of products containing camphene within 200 yards of any building in the city.The Charter and Ordinances of Lowell, Massachusetts, 1863.
The increasing demand for whale oil decimated the whale populations in the mid-1800s. The number of whales caught rose each year, until the American whaling industry produced another record amount of whale oil in 1846, after which the whale hunting deteriorated . The increasing number of whaling ships partly compensated for the lower catch per ship each year, but the fleet could never again match the record catch of 1846. The shortage of whale oil caused both the price and the level of imports, to jump.
As the price of whale oil escalated, scientists tried to create a cheap, artificial oil that would burn with a bright, smokeless flame, safer than “burning oil.” Two succeeded: Scottish chemist James Young, and Canadian geologist Abraham Gesner. Both distilled their lamp oils from coal or coal-like raw materials. James Young made his from coal, and discovered that the coal that yielded the most oil was cannel coal. Young filed a patent for his process in 1850, and built a highly successful plant at Bathgate, Scotland making an illuminating oil he called “paraffine,” from the cannel coal that was mined nearby, the Boghead coal, which yielded more oil than any of the other coals he tested.
By 1853, Canadian geologist Abraham Gesner had learned to distill a good-quality lamp oil from a rock called “albertite,” found in New Brunswick, Canada. It was a matter if dispute whether albertite was coal or hardened petroleum. Gesner moved from Halifax, Nova Scotia to New York City in early 1853, and in March 1853 he circulated a prospectus for the Asphalt Mining and Kerosene Gas Company. The company bought a plot of land in Brooklyn, primarily to manufacture coal gas from albertite imported from New Brunswick, but the prospectus also mentioned that the Gesner's process would also yield 15 gallons per ton of “Kerosine, or Burning Fluid.” The company reorganized in 1854 as the North American Kerosene and Gas Light Company. That same year, Gesner received a patent for his process to make a lamp oil he named Kerosene. Kerosene soon became the principal money-maker for Gesner's company.
The coal oil "mania" The successes of Young and Gesner attracted a flood of imitators. The Scientific American noted that the number of American companies making coal oil grew from three at the end of 1857, to 42 or more at the end of 1859. The magazine said that the rush to establish coal-oil works resembled “a mania,” and attributed it to the “impetuous energy” of the American people.”Coal oil manufacture,” Scientific American, 2 Jan. 1860, v.2 n.1 p.3.
In the mid-1850s, whale-oil dealer Samuel Downer Jr. bought the near-bankrupt United States Chemical manufacturing company of Waltham, Massachusetts. The firm manufactured lubricating oil from coal, but the oil sold poorly because of its strong odor. With Downer's financial backing, the firm perfected its lubricant. After a company chemist returned from a visit to the Scottish oil shale region, the firm switched emphasis to lamp oil, which it manufactured at Waltham, as well as at another factory it built at Portland, Maine. Both works used albertite imported from New Brunswick. By the end of 1858, the Downer Company had 50 retorts, and dominated the coal oil business in the northeast.
The first American shale oil/coal oil manufacturer using non-imported coal was the Breckinridge Cannel Coal Company, chartered by the Kentucky legislature in 1854. In 1856 its twelve new retorts at Cloverport, Kentucky began producing of lamp oil each day. The company had the advantages of proximity to large deposits of cannel coal from the Breckinridge coal deposit in Hancock County, Kentucky, and a location on the Ohio River, providing cheap shipping to markets. Commercial-scale shale oil extraction, other than cannel coal processing, began at shale oil retorts using the Devonian oil shale along the Ohio River Valley in 1857.
Shale oil manufacturers followed two geographic patterns: place the retorts close the customers, or close to the oil shale.
The first pattern was to place the retorts in or near a major market along the East Coast, and use shale or coal shipped long distances, usually imported from New Brunswick or Scotland. Shale oil manufacturers established themselves along the Northeast and Mid-Atlantic coast from Portland, Maine, to Baltimore. New York had at least fourteen shale oil companies, and Boston seven.Thomas Antisell, The Manufacture of Photogenic or Hydro-Carbon Oils (New York: Appleton, 1860) 16.
The second pattern was to locate the retorts close to the oil shale, and ship only the product long distances. The oil shale industry of the Ohio River Valley followed this model. At least 25 shale oil manufacturers set up retorts along the Ohio River and its navigable tributaries from Pittsburg on the east to St. Louis (on the Mississippi River) on the west. Major coal-oil centers were Pittsburg, with four coal-oil companies; Cincinnati, with three; and Kanawha, Virginia (now West Virginia), with six companies. Kentucky had six coal-oil manufacturers.
By early 1860, there were between 60 and 75 shale oil companies in the United States, producing from seven to nine million gallons annually of lamp and lubricating oil. Lamp oil from shale was reportedly much improved, and free from its early problems of smoke and odor. It was hailed as giving “more and cheaper light than any other substance,” and was driving the turpentine-based (camphene) lamp oils, as well as the much more expensive whale oil, from the market.”Baltimore, Maryland,” Hunt’s Merchants’ Magazine, May 1860, v.42 n.5 p.573.
The coal oil industry is ruined by cheap petroleum Today, oil shale is an “unconventional” energy source, and drilling for crude oil is the norm. But in the late 1850s, those positions were reversed. By 1859, when some venture capitalists hired Edwin Drake to drill for oil in western Pennsylvania, the oil shale industry was well established, and it was the idea of drilling for crude oil that was unproven.
Petroleum distillation had been going on in the US at a small scale since 1851, when Pittsburgh, Pennsylvania salt manufacturer Samuel Kier began taking the petroleum which was fouling his salt wells, and distilling it in a five-gallon still into lamp oil which he sold to coal miners. Kier never patented his distillation process, and production was limited by the small supply of petroleum that seeped into his salt wells.