The Solution?

Gas prices are high. And they continue to rise. In my home state of Massachusetts, gas prices have increased substantially:

AAA’s Jan. 4 survey of prices in Massachusetts found self-serve, regular averaging $2.62 per gallon, up three cents from last week. The price is four cents below the national average for self-serve, regular. A year ago at this time the Massachusetts average price was $1.62, a dollar lower than today’s average.

You think three cents in a week in Massachusetts is bad, just look South. In Jacksonville, gas prices rose five cents:

Jacksonville gas prices rose 5 cents over the past week as severe temperatures throughout the country increased demand for crude oil to produce heating oil.

The average price of a gallon of regular gas is $2.65 in metro Jacksonville, $2.68 in Florida and $2.66 nationally, according to AAA Auto Club South.

The increase in the price at the pump is reflective of the price of a barrel of oil. Oil prices continue to progress to highs and the seasonal conditions have not helped either:

Crude oil climbed above $81 a barrel for the first time in two months as freezing weather and improving economic prospects around the world bolstered the outlook for fuel demand.

At the same time, supply is falling:

U.S. heating oil stockpiles have fallen for six weeks to 44.4 million barrels, the longest decline since April 2008, an Energy Department report showed Dec. 30. Supplies of distillate fuel, a category that includes heating oil and diesel, probably fell 2 million barrels last week, according to the median of seven responses in a Bloomberg News survey.

It is only natural that prices would increase from the resulting changes in the market. When economic pressures are present, it leads to new innovation or alternatives to relieve the stress. It's why economics are so central to the way our world works. With oil prices rising, we need a new innovation or an alternative to arise.

So is Oil Shale the solution? What is oil shale you might ask. Oil shale is a source rock that hasn't yet released the oil. We can obtain this oil through processing. Seems simple enough. However, complex engineering and economics have gotten in the way in the development of the industry. But with oil prices as high as they are, it is now feasible to explore ways to produce oil from shale.

Total SA, Europe's third largest oil company, seems to think so:

Total SA, Europe’s third-largest oil company, accelerated its expansion in unconventional energy by agreeing to buy a stake in Chesapeake Energy Corp.’s assets in the biggest U.S. natural-gas field for as much as $2.25 billion.

Here's some information on the Barnet Shale:

The Barnett Shale is the most productive U.S. gas field and accounted for 52 percent of Chesapeake’s third-quarter output. It was the first geological formation where improved technology enabled producers to bore sideways through thousands of feet of rock and fracture it with a mixture of water, sand and chemicals to make gas flow.

So it appears that companies are investing money into the resource. We'll see if it ends up paying dividends. We have only so many resources, and economics dictate whether we can produce something that is of use. Hopefully, oil shale will be a new economically viable resource.