Consider the oil industry example …

The oil industry has been struggling for decades with the cost-result ratio problem of accessing the fuel resources that are right under the North American continent. Because most of the equipment used to extract and refine these resources is itself fueled by natural gas, it has been cheaper for the U.S. to import oil than it has been to extract and refine into usable products, the oil shale and sands that are available on its own continent. Although the landscape has changed somewhat with crude reaching $120 per bbl, the oil and gas industry will continue to actively seek ways in which to cut production costs.

According to a study released in 2005 by the Rand Corporation for the U.S. Department of Energy, if low cost methods of production, for oil shale in particular, can be created, there is indeed incentive for exploiting these resources.The study reports that direct profits in the $20 billion per year range are possible for an industry wringing three million barrels per day out of shale in the U.S. alone.

Hyperion power modules provide significantly less expensive power, at $3 per million BTU instead of the $9 to $14 per million BTUs currently paid (and that price does not include transportation). HPMs can dramatically reduce the cost of extracting and refining shale and sands and make these efforts worth the capital investment to jump-start shale operations and improve the cost-efficiency of existing oil sands facilities. The development of these unconventional oil resources can also provide measurable employment opportunities, a slight reduction in world oil prices, and less dependence on foreign oil for the U.S. and other countries.

Downsides to production of unconventional oil include environmental surface disturbances, groundwater contamination, a decrease in regional air quality and an increase in greenhouse gas emissions. However, widespread use and acceptance of HPMs could eliminate these last two concerns by providing clean energy to power processing facilities.

As the price per barrel climbs, the heat is on to find new sources of oil and revisit prospective sources originally abandoned as too expensive for recovery. Regardless of how much of the North American continent’s hydrocarbon resources are recoverable, the U.S. needs what it can get and most people in America are now aware of it from the President down to the typical high school student. In a national address on energy, President Bush stated: “Our dependence on foreign energy is like a foreign tax on the American people. It is a tax our citizens pay every day in higher gasoline prices and higher costs to heat and cool their homes. It’s a tax on jobs and a tax that is increasing every year.”

By the 4th quarter of 2007 the 50 U.S. states supplied 8.9 million barrels per day and used 21.4 million barrels per day7 to create the 8.36 quadrillion BTUs the country used. This situation will continue to worsen if the U.S. continues to depend only on conventional oil resources. A large portion of the total U.S. resource base of on-shore conventional oil has already been produced. New conventional (non-oil shale or sand) oil reservoir discoveries are likely to be smaller, more remote (e.g., Alaska), and increasingly costly to access. With the price of conventional crude oil currently at over $120 per barrel, the claim that it is not worth the cost to further explore unconventional oil resources is no longer valid.