Both shale oil and crude oil are a source of the same chemical compounds that are burned to create energy - hydrocarbons. The difference is that crude oil, also known as petroleum, is already in its ready form, while shale oil has to be extracted from oil shale through intense processing. Shale oil is a synthetic substitute for crude oil, and one with heavy environmental and economic costs.
Shale oil comes from processing oil shale, a kerogen containing fine-grained sedimentary rock. Kerogen is an organic compound, that when compressed and heated at extremely high temperatures, produces liquid hydrocarbons, or fossil fuels. Oil shale isn't actually shale, and its kerogen is chemically different then the make-up of crude oil. The atomic ratio of oil shale of hydrogen to carbon is anywhere from 1.2 to 1.8 times lower than that of crude oil. The decomposition process of chemically breaking down kerogen into synthetic crude oil is called pyrolysis. Oil shale is heated at such a high temperature, from 450 to 500 degrees celsius; then a vapor is released. When the vapor is processed it creates the shale oil, as well as a shale gas and some solid waste residue. This process mimics the natural process that has occurred over hundreds of years to produce crude oil from ancient organic compounds.
Shale oil isn't as pure as crude oil, which in its lightest forms can be up to 97% hydrocarbons by weight. Shale on the other hand contains high levels of olefins, oxygen, and nitrogen, as well as problematic sulfur or arsenic in from some oil shale deposits. Because of this, the shale oil has to go through a more rigorous treatment process, hydrotreating, before it can be sent to the oil refinery, if it is sent at all. It is often used to produce middle distillates, such as kerosene, jet, and diesel fuel, which are more suited to the impure composition. Otherwise it is burned for fuel in thermal power plants, or to drive steam turbines. Crude oil's main use is to make gasoline.
The production of shale oil is much more detrimental to the environment than simply the collection of crude oil. Because shale has to be first mined, then shipped to be processed , there is the added cost on the environment just to get shale to the state that crude oil is already in. The waste products of pyrolysis include acid drainage, greenhouse gas emissions, and air pollution. Also, the amount of water used to produce shale oil is a concern. In Estonia, where they use shale oil to run many of their power plants, 91% of the water used in the entire country was used by oil shale fired industries.
Shale oil is a much more expensive option than crude oil. To reach petroleum, the oil companies only have to extract it from oil wells, then ship it off to refineries to turn it into gas, as opposed to the higher processing needed to transform sedimentary rock into viable liquid fuel. It can cost as much as $75-$90 to produce a barrel of shale oil. Shale oil demand reached its peak after the 1973 oil crisis, when world production was up to 46 million tons. Whenever the price of crude oil rises, shale oil will be an option that energy companies will turn to.
Countries continue to use shale oil, despite its expense and environmental impact, partially to exert their energy independence. Estonia and China, are the biggest users of their shale oil reserves, followed by Germany, Israel, and Russia. Global deposits of oil shale are thought to be around 3 trillion barrels, with considerable reserves in the United States. Oil shale has been used for heat energy since prehistoric times, and will continue to be another source of energy, right along side petroleum.