Of the 64 countries that produce petroleum, 51 are currently in decline and the rest will almost certainly be past their peak production within the next two decades. As shortfalls in conventional petroleum emerge, the world will be forced to look to unconventional resources such as oil shale, tar sands and coal liquids to make up the difference.

Utah Sen. Orrin Hatch, the Utah and Colorado congressional delegations and other co-sponsors in Congress are to be commended for their foresight by including provisions for oil shale planning and development in the energy bill.

The emerging problem will not be a general shortfall in energy; it will be a shortage of liquid fuels. There is no good substitute for liquid fuels to drive our transportation system.

Renewable energy such as hydroelectric, wind and solar-electric produce electricity, not liquid fuels. To be sure, we need to improve end-use efficiency as well, and the availability and rising popularity of hybrid gas-electric vehicles is positive.

It will take seven to 10 years to bring an oil shale industry into meaningful production. The Hatch bill tells industry that government recognizes oil shale and tar sands as important fuel sources. It provides for planning at the local, state and federal levels; for access to resources; for measured development of technology; and for an economic climate that reduces the financial risk of investing in the first-generation facility.

In other words, it tells investors that government will be a partner in the critical phases of a new industry.

Nobody wants to see a bust cycle. Prior failures occurred for a combination of reasons, including technology bottlenecks, but the most significant reasons were downturns in the price of crude oil.

Tar sand production in Alberta, Canada, almost went out of business for the same reasons. To Canadians' credit, their government and industry worked together and weathered the downturns and now they are a key petroleum supplier to North America.

Oil shale is even richer than Alberta tar sands and could become a reliable domestic source of energy for generations.

We learned from the Alberta experience that the first-generation facility is the hardest, and that the high front-end investment requires favorable tax and royalty treatments in the early years. The Hatch bill addresses these requirements as well as provides a safety net for unexpected downturns in oil prices.

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Dr. James Bunger has conducted research in oil shale and tar sands for more than 30 years. He is a principal author of the recent report Strategic Significance of America's Oil Shale Resource and serves as a consultant to the U.S. Department of Energy, Office of Petroleum Reserves.