By allowing ads to appear on this site, you support the local businesses who, in turn, support great journalism.
Ask AP: Oil shale, the importance of a recession
Placeholder Image
    Is the country in a recession? If not, is it going to be? And for how long?
    You’ve probably heard questions like these over the past few months. But maybe this is also worth asking: Why does it even matter whether an economic slowdown qualifies as a recession?
    That’s one of three questions in this edition of ‘‘Ask AP,’’ a weekly Q&A column where AP journalists respond to readers’ questions about the news.
    If you have your own news-related question that you’d like to see answered by an AP reporter or editor, send it to newsquestions(at)ap.org, with ‘‘Ask AP’’ in the subject line. And please include your full name and hometown so they can be published with your question.
    ———
    I have read that oil from oil shale fields would be relatively economical at about $80 a barrel. Why don’t we hear much about extracting that oil?
    J. Trenne
    Minnesota
    ———
    The reason you’re not hearing a lot about oil-shale deposits is that no one, as yet, has developed a way to extract the oil that’s both environmentally sensitive and commercially viable on a large scale.
    Oil shale generally refers to an underground rock that contains kerogen, a substance that can be released as petroleum when heated. The downside: The process is more complicated than pumping oil from wells and has raised concerns about air and water pollution.
    ‘‘If oil prices stay above $100 a barrel, oil shale is probably a feasible venture,’’ said James Bartis, a senior policy researcher at Rand Corp., a nonprofit think tank. ‘‘But that doesn’t mean companies are going to invest in it right away.’’
    For one thing, Bartis said, there’s no guarantee crude prices will remain at today’s historic levels.
    Oil companies began looking for ways to extract oil from shale decades ago, but many efforts were shelved in the 1980s as oil prices fell and supplies stabilized. Some projects have been revived in recent years, in part because of rising prices and technological advances.
    Shell Oil Co., for example, is testing technology that involves drilling holes in fields and inserting electric heaters to gradually heat rock over long periods of time, causing the trapped kerogen to be released as oil and gas. The process is more environmentally sensitive than traditional drilling.
    Despite such advances, Shell says the lack of an existing regulatory structure for oil-shale extraction creates uncertainty about the industry’s prospects.
    What’s more, access to the richest oil-shale deposits is tricky because most are on federally owned and managed lands, primarily in Colorado, Utah and Wyoming. Companies will have to get federal approval for any large-scale operations.
    The federal government has issued a few leases for test projects in Utah and Colorado.
    ‘‘I don’t have any doubt we eventually could have a good-sized, healthy industry,’’ Bartis said. ‘‘It’s the path to getting there that’s complicated.’’
    John Porretto
    AP Business Writer, Houston
    ———
    Why is it important whether we are or are not in a ‘‘recession’’? I have read a technical definition of the word, and I have seen and heard many news reports in which economists and government officials opine on whether we are or are not in a recession. What is resting on that determination?
    Ed Hein
    Juneau, Alaska
    ———
    The determination of a recession — usually made well after the fact — can be thought of as an economic, political and historical yardstick. It is used to judge how policymakers — in the White House, at the Federal Reserve, on Capitol Hill and elsewhere — handled the economy and its problems on their watch. It also represents a lasting page in the country’s economic history.
    The end of a recession, meanwhile, signals the start of an economic recovery, which also can have implications for decisions made by policymakers, businesses, jobseekers and others.
    Jeannine Aversa
    AP Economics Writer, Washington
    ———
    The high price of fuel has forced airlines to raise prices and cut back on service. Are passenger train operators doing anything to drum up business from travelers who don’t want to pay the higher airfares?
    Trains are more fuel-efficient than planes, so it seems like it might be worth it for them to add service or even build more tracks if they can offer a lower-cost travel alternative.
    Laura Rettig
    Germantown, Md.
    ———
    When it comes to intercity passenger train travel in the U.S., Amtrak is the only game in town.
    Amtrak spokesman Cliff Cole said the company is satisfied with its current service, and doesn’t plan any changes to its business anytime soon. The federally subsidized rail service said ridership has gone up in the last year by about 11 percent — half of which it attributes to higher fuel costs.
    What about big changes in infrastructure — building new tracks or expanding the passenger rail network?
    Many Amtrak trains share tracks with freight trains, which haul everything from coal to cars across the country. And just as many Americans have reacted to high fuel costs by turning to the tracks, more freight is shifting from trucks to trains. Some analysts say those converging factors could create a sticky situation in the coming years if the rail system doesn’t expand fast enough to meet demand.
    A bill that would provide billions of dollars in federal funds to expand and improve Amtrak’s network is currently in front of Congress. Several states are also mulling local expansion plans.
    Samantha Bomkamp
    AP Transportation Writer, New York
    ———
    Have questions of your own? Send them to newsquestions(at)ap.org.

Sign up for the Herald's free e-newsletter