More Shale Oil. Yawn.  

The Australian's "Pure Speculation" column reports that local investors are finding it hard to get interested, let alone excited, about various minnows touting their oil shale finds - Investors cool to oil shale discoveries.

WAS it memories of burned fingers or speculators' capitulation to the bear market?

Whatever the reason, no one is getting excited about oil shale. It may be one of those stories that will -- unlike uranium and phosphate -- creep up on people rather than go into overdrive from the beginning, especially if oil prices cement themselves at some level over $US150 a barrel.

We talked here last week about the possible resurrection of the oil shale story. Extracting oil from such formations has a long history in Australia: between 1870 and 1911 oil shale was mined at Mittagong south of Sydney and there were other operations at Murrurundi, Glen Davis and at Newnes near Lithgow, the last closing in 1932 when sufficient crude supplies put it out of business.

The oil shale story came back into vogue after the crude price shocks of the late 1970s. Oil shale has a similar story to that of uranium -- a great deal of work was done back in the 1970s and early 1980s when prices were high; then the prices of both uranium and oil went into a dive and the explorers left. Now old projects are being dusted off.

A few weeks ago we had Tasman Resources (TAS) dip its toe in the story with an announcement about finding oil shale in South Australia. No one got excited.

Likewise in the past week. It didn't help that the latest announcements came out as the oil price buckled to a seven-week low, and each correction such as this week's one will leave investors jittery about a concept that has both a dodgy history in terms of failed projects and also relies on crude prices staying sky high.

Back in 1983 the then BHP found lignite and oil shale on the Eyre Peninsula in South Australia. But the market seemed to yawn when Uranium SA (USA) reported last week that nine of 30 uranium exploration holes at its main Eyre Peninsula prospect had hit significant lignite and oil shale in the same area. All of 12 shares (worth a total $1.32) went through the day after the announcement.

Oil shale exploration took place in Queensland, between Cloncurry and Julia Creek, around 30 years ago and large near-surface deposits were found but the grades were low, about 0.25 barrels a tonne. Now Paradigm Metals (PDM) and Exco Resources (EXS) report they have oil shale on covering 100sq km on ground at Cloncurry with the shales at least 10m thick.