A graphic portrayal of conventional oil in the United States and Saudi Arabia since 1880, vis-a-vis a series of predictions since 1918 of the economic feasibility of obtaining oil from shales, has been used to examine the problems and prospects for commercialization of oil shale in the United States. Time series analysis, and analogy to R. M. Catlin's 1920 commercial plant and Union Oil's 1957-58 aborted commercial entry reveal that the economic infeasibility of shale oil is not merely the result of inflation; subjected solely to the influences of inflation, oil from shale would today cost only slightly more than $8.00 per barrel.

Given this rejection of inflation as the prime deterrent to commercialization, the most critical factors which continue to cause cost projections for shale oil to exceed even OPEC's escalation of oil prices since 1973 are identified. The work of Edward W. Merrow and the RAND Corp., have identified some of these constraints. A review of state-of-the-art extraction and environmental technology, and the more common theories as to the continued economic infeasibility of commercial scale plants lead to a focus on seven specific factors--two economic and one each of technologic, financial, logistic, environmental, and socio-economic/political.

A potential resolution or significant mitigating influence has been identified for each of these factors, the proposal's synergism examined and commercial operation under it compared to more conventional alternatives. A conceptual feasibility study and computer sensitivity analysis reveals the potential for oil shale prices well below those of conventional oil. Based on current oil industry statistics, a forecast of the long-run market potential of shale oil and a surprising estimate of eventual market segmentation have been made.

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