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September 7, 2010 4:20 PM EDT
Oil demand will increase by 25 percent and prices will more than double by 2030 from 2006 levels, according to the Energy Information Administration (EIA).
These prices should enable more extraction from oil sands and oil shale, said Michael Owyang and Kristie Engemann, two researchers at the St. Louis Federal Reserve.
Change in the oil industry is constrained by cost. Currently, oil prices are not high enough to justify a meaningful deviation from the status quo, which is drilling for oil from the ground. But if oil prices become high enough, more costly alternatives like clean energy, deepwater drilling and production from oil sands and oil shale will develop more rapidly.
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Oil Sands
Oil sands are petroleum deposits, in an extremely dense and viscous form called bitumen, that is mixed with sand, clay and water. When bitumen is extracted and separated, it must then be processed in an upgrading facility to turn it into a form most refineries can use.
The largest known reserves are found in Canada and Venezuela.
As of 2005, there were 5.8-trillion barrels of oil in oil sands and 0.3 trillion of it is recoverable. This compares to 1.2 trillion barrels of conventional crude oil that is recoverable and U.S. oil consumption of nearly 20 million barrels in 2008.
Oil Shale
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