Royal Dutch Shell plc .com Rotating Header Image

Posts under ‘Climate Change’

Peter Voser article: Burning issue for leadership

Updated: 2011-11-09

By Peter Voser (China Daily)

Coordinated global response is needed to meet challenge of providing more energy for more people and cutting CO2

Our world reached a significant milestone on Oct 31 when a mother gave birth to the Earth’s 7 billionth inhabitant. At this rate, the Earth will be home to more than 9 billion people by 2050 a number with an enormous potential impact on the global demand for energy, water and food.

Planning wisely for the future energy needs of this huge population is one of the most important challenges our generation faces, in part because it is far more than just an energy issue. Our future energy challenge is also a global security issue, an environmental issue, an economic issue and a jobs issue.

The global energy system is already in the early stages of a fundamental transformation. The future will see expanded use of renewable energy and cleaner fossil fuels. We will have more energy choices, but those choices will be more costly, so we will all have to become smarter about using energy efficiently.

Despite the scale of the challenge, I’m confident human ingenuity and technological innovation can make it happen. But what is lacking today is the common will to act. Getting where we need to go will require a new level of leadership and global collaboration on multiple fronts.

But the leadership triangle of government, business and society is increasingly ineffective. We need to rekindle the spirit of global cooperation and leadership that helped us deal with past challenges.

Simply put, our challenge is to produce far more energy for a world with far more people. At the same time, we need to reduce CO2 emissions and get smarter about how we extract and use our resources. And we will need to do this against a backdrop of almost constant volatility and change.

A big part of a broader global energy mix will be the rapidly expanding contribution of renewable energy resources. Up to 30 percent of the world’s energy mix could come from renewables by 2050. But that target assumes a very rapid growth rate that will require significant effort and sustained investment.

Even if the world achieves this target, all forms of energy will need to be developed to meet the future demand.

Among fossil fuels, natural gas will play an increasingly important role. It is the cleanest burning and the best ally of wind and solar power, which need a highly flexible backup.

Natural gas is also an ideal alternative to coal-fired power plants, emitting 50 to 70 percent less CO2. Replacing coal with gas to produce electricity is, by far, the fastest and least expensive way for the world to reduce CO2 emissions in the energy sector. Gas is affordable, its resource base is vast and widely dispersed, and it can help diversify energy supplies all of which enhance energy security.

It is also important that we focus on the ways in which water, energy and food are interconnected. Water is used to produce nearly all forms of energy energy is used to move and treat water, and energy and water are used to produce food. There is a growing awareness that the path to a more sustainable energy future will require society to balance the needs of these systems, while at the same time, keeping sight of carbon emissions and other resource stresses.

At Shell we have brought together specialists from various fields to map the links and better understand the trade-offs. Our early findings have identified two important factors that could help avoid a future water-energy-food crisis: smart urban development and greenhouse gas regulation and pricing.

Cities today hold half of the world’s population and generate up to 80 percent of its CO2 emissions. The global urban proportion is expected to grow to 75 percent by 2050. So the way in which our cities develop will greatly affect energy and water demand.

Through more efficient public transport, energy-efficient buildings and designs that utilize waste heat as an efficient energy source, and through investing heavily to upgrade our infrastructure, we can offset some of the growth in energy demand while creating new jobs.

But what is still urgently needed is a global consensus on greenhouse gas regulation and pricing. Widespread adoption of the most cost-effective CO2 reduction measures will only occur when governments promote frameworks to price CO2.

It brings us back to the need for leadership and global collaboration.

The absence of coherent energy policies among some of our largest energy-consuming nations and regions is a direct result of the lack of leadership and, more broadly, a troubling lack of basic trust between business, government and society.

Rather than choosing winners and losers, governments should set the goals and then provide appropriate incentives that let the market determine the most effective solutions.

I’m optimistic we will meet this challenge, as there are past examples of global leadership that offer hope. The coordinated response to the 2008 financial crisis is one. The international agreement to ban substances blamed for depleting the ozone layer is another.

Today we have a major opportunity to address the energy challenge in a way that avoids unnecessary pain in the future. Let’s not waste it.

The author is chief executive officer of Royal Dutch Shell. The article is based on a speech he delivered on Oct 31 to the Singapore Energy Summit.

(China Daily 11/09/2011 page8)

SOURCE ARTICLE

Revealed: Shell’s poor safety record in the UK

“Shell’s poor regard for safety and their terrible communications over the last 10 days should be ringing major alarm bells…”

Last week’s North Sea oil spill was not the first time Shell had found itself in trouble. Environment Editor Rob Edwards reports

Shell has been officially censured for breaking safety rules 25 times in the last six years and has one of the worst safety records of the major oil companies in the UK, an investigation by the Sunday Herald has revealed.

The British oil multinational has been prosecuted, fined and formally reprimanded for repeatedly failing to maintain pipelines and other vital equipment in the North Sea, for failing to report a dangerous incident, and for failing to protect workers from hazardous chemicals.

The revelations, from records held by the Government’s Health and Safety Executive (HSE), have led to renewed criticism of Shell in the wake of last week’s oil leak from a pipeline to the Gannet Alpha platform 112 miles east of Aberdeen. The company has been slammed for failing to be open about the leak, which it claimed to have sealed on Friday.

Now, critics have lambasted Shell for being a “serial offender” that refuses to learn from its mistakes. And they warn that the regulatory regime meant to ensure the safety of the North Sea oil industry is no longer fit for purpose.

“This shocking history of warnings, violations and prosecutions could suggest a company that is cutting corners on essential maintenance and skimping on safety,” said Dr Richard Dixon, director of the environmental group, WWF Scotland.

“With such a lamentable performance, something like the Gannet Alpha spill was almost bound to happen. The question now is what other knackered bits of kit are about to give out.”

Dixon called for Shell’s North Sea operations to be restricted until a full and independent audit of all its facilities had been carried out. “Shell’s poor regard for safety and their terrible communications over the last 10 days should be ringing major alarm bells with the UK Department of Energy and Climate Change and the HSE,” he argued.

The HSE maintains online databases of all the prosecutions, prohibition orders and improvement notices against UK companies for breaching health and safety regulations. An analysis of those involving oil companies shows that Shell is among the top offenders.

Since 2005, Shell has been prosecuted four times: for an explosion at Bacton gas terminal near Norwich; an accident at Ellesmere Port in Cheshire; a collision at the Mossmoran gas plant in Fife; and a fatality on the Clipper rig in the North Sea. The company has been forced to pay out nearly £1 million in fines and legal costs.

No other major oil company has faced as many prosecutions in the last six years. According to the HSE, Talisman has been prosecuted twice, while BP, Total, Amec and Nexen have each been prosecuted once (see table).

In addition, Shell has been served with 21 prohibition and improvement notices by HSE safety inspectors since 2005. The company has twice been told it was guilty of a “failure to implement a suitably resourced maintenance regime” on the Clipper rig, once in 2006 and again in 2007.

“This has lead to excessive backlog of maintenance activities for safety-critical equipment and non-safety-critical equipment, leading to poor working order and repair of equipment,” said the HSE.

In October 2009, Shell was served an urgent prohibition notice to remedy dangers on the Brent Charlie platform. According to HSE, there was “a risk of serious personal injury because there is no effective means of safely removing toxic and flammable gas” from below a floor.

In April 2007, Shell was accused by HSE of failing to report “by the quickest practicable means that there was a dangerous occurrence” on the Dunlin Alpha rig. There have also been maintenance failures on Brent Bravo and Leman Alpha, as well as problems controlling exposure to asbestos on Leman Charlie and another toxic chemical on Dunlin Alpha (see table below).

Only one oil company has received more enforcement notices than Shell. That is the Danish corporation, Maersk, which has been served 33 prohibition and improvement notices by HSE since 2005. But it hasn’t been prosecuted.

Other evidence previously released under freedom of information law shows that Shell rigs have one of the worst records for oil spills in the North Sea over the last two years. There were leaks from seven of the company’s platforms in 2009 and 2010.

The most spills were from the Brent Charlie rig, which suffered seven leaks in the two years. The biggest was in April last year when an escape of four tonnes of gas triggered a production shutdown.

Shell’s poor track record prompted experts to question whether the current regulatory regime is working. The company’s performance was “deeply worrying” in an industry which suffered “serious and often potentially catastrophic shortcomings,” warned Professor Andrew Watterson, head of the occupational and environmental health research group at the University of Stirling.

He pointed out that ensuring health and safety for oil workers should help reduce pollution. “But this will not happen if companies can escape the consequences of poor performance and offset much of the human, environmental and economic damage they do onto injured workers and wildlife,” he argued.

According to Watterson, oil and gas spills in the offshore industry as a whole rose from 65 in 2008-09 to 85 in 2009-10. At the same time, major injuries rose sharply from 106 to 188 per 100,000 workers.

“The number of HSE offshore inspectors in the same years fell from 98 to 90,” he said. “These are not figures that inspire confidence either in the oil industry or the increasingly run-down regulators.”

The HSE, however, insisted it had an established record of holding oil companies to account. The offshore industry was obliged to adopt high standards, which were independently checked, it said.

“Although we are confident that we have one of the most robust safety regimes in the world, we are not complacent,” said an HSE spokesman. “The penalties imposed for breaches of offshore regulations are a matter for the courts.”

He added: “HSE’s enforcement notices database is not designed to be read as a safety league table. Counting the number of enforcement notices does not take account, for example, of the number of installations a company may operate.”

Shell stressed that its “prime focus” was a commitment to ensur- ing the safety of staff and infrastruc- ture. “We constantly inspect, monitor and review all our assets,” said a company spokeswoman.

“We work closely with regulators and have invested over $1 billion in recent years to upgrade facilities across the North Sea.”

But that is not going to comfort environmentalists. “Shell appears to have one of the poorest safety records of the major oil companies,” said Stan Blackley, the chief executive of Friends of the Earth Scotland.

“This doesn’t really surprise us, but it’s depressing all the same. Already some environmental and human rights groups claim Shell has a reputation for poor practice, complacency and misinformation.”

Blackley said Shell was fiercely criticised for pollution and human rights abuses in the Niger Delta. “Fining Shell is not going to make it change its ways,” he warned.

“The executives running the business need to be held accountable for any failings or wrongdoings and, if found guilty of any breach of the law, prosecuted to the full extent of the law.”

SOURCE ARTICLE

Shell: nothing wrong with fracking and unconventional gas

From pages 32, 33 34 & 35 of “Royal Dutch Shell and its sustainability troubles” – Background report to the Erratum of Shell’s Annual Report 2010

The report is made on behalf of Milieudefensie (Friends of the Earth Netherlands)
Author: Albert ten Kate: May 2011.

Shell: nothing wrong with fracking and unconventional gas

In its communication, Shell makes no difference between conventional and unconventional gas in terms of environmental and health risks. The company generally refers to natural gas as being cleaner-burning than coal in power plants and as being a bridge to a low-carbon energy future.

On fracking, Shell states on its website: “This is a safe and proven technique according to the U.S. Environmental Protection Agency (EPA), which is now carrying out a new study into hydraulic fracturing and its potential impact. Fracturing has been used by oil and gas companies for over 60 years.” The company does not mention that there are great differences between the traditional fracking and the present high-volume fracking, that the EPA has been presently accused of hiding some severe impacts of fracking, and that the U.S. government has not been able and/or willing to monitor the booming U.S. shale gas business adequately.

Environmental and health risks caused by unconventional gas extraction

In this section, the environmental and health risks of the present high-volume fracking are considered more in-depth.

1) Enormous water use

According to the U.S. Environmental Protection Agency, the volume of water needed for hydraulic fracturing varies by site and type of formation. Fifty thousand to 350,000 gallons of water may be required to fracture one well in a coal-bed formation, while two to five million gallons of water may be necessary to fracture one horizontal well in a shale formation. A gallon stands for 3.78 litres.

Shell stated in September 2010 that hydraulic fracturing requires 1 to 5 million gallons of water per well and that it re-uses some of the water. For its Groundbirch tight gas operations in British Columbia (Canada) Shell claims to use 5 to 8 million litres per well, sourced locally from the Peace River, fresh water wells and some 20-40% recycled from producing wells. As with most unconventional gas operations presently going on, the Groundbirch operations have just been starting up. As of June 2010 Shell had drilled 103 wells, with almost 3,000 wells yet to come. Shell’s future aspiration is to use reclaimed water from a waste treatment plant at Groundbirch, transported via pipelines so the present disposal by trucks can be reduced.

To explore the shale gas possibilities of the Karoo region in South Africa, Shell states it may decide to hydraulically fracture vertical and horizontal exploration wells. It expects to need up to 2.2 million litres of water for hydraulic fracturing a vertical exploration well and up to 6 million litres for an exploratory horizontal well section. Whenever Shell is allowed to explore the Karoo region, and it does find gas it could produce on an economically basis, one wonders how Shell would cope with the enormous amounts of water needed in the semi-desert Karoo region. Shell has not yet shared its thoughts about this.

2) Pollution of water resources

There are several ways in which water could be polluted through high-volume fracking. With shale gas production, the two major pathways to water contamination are activities at the surface and errors below ground: − Once in the ground, a large portion of the fracturing fluid may be trapped in the target formation. The rest, however, comes back to the surface (flowback), combined with water produced from the formation itself. Both flowback and produced water represent large waste streams. If flowback and produced water are disposed of improperly, waste water may threaten public and environmental health.

− Errors below ground can endanger water resources as well. Improperly cased wells may contaminate penetrated aquifers. Potential shallow pockets of natural gas in formations above the target layer may enter into ground water.

− Trucks transporting water to the site for fracturing and from the site for disposal may stress nearby stream banks, contributing to erosion and adding sediment to surface water.

Experiences in Pennsylvania, United States

In February and March 2011, the New York Times published several articles about the pollution caused by drilling in Pennsylvania State, USA. During nine months the newspaper had obtained more than 30,000 pages of documents from state and federal agencies/officials.

The shale gas business is booming in Pennsylvania, sitting atop the enormous reserve called the Marcellus Shale. In 2010, drilling companies were issued roughly 3,300 Marcellus gas-well permits in Pennsylvania, up from just 117 in 2007.

The New York Times estimated that more than 1.3 billion gallons of wastewater was produced by Pennsylvania wells over the past three years. Based on the obtained documents, the newspaper estimated that some 10 to 40 percent of the water sent down the well during hydrofracking returns to the surface, carrying drilling chemicals, carcinogenic materials, corrosive salts and, at times, naturally occurring radioactive material. Most of the wastewater was sent by trucks to treatment plants not equipped to remove many of the materials, and ended up in rivers providing drinking water for millions of people. The U.S. Environmental Protection Agency states that it is dangerous when radioactive wastewater contaminates drinking water or enters the food chain through fish or farming. Once radium enters a person’s body, by eating, drinking or breathing, it can cause cancer and other health problems, many federal studies show.

The newspaper was able to map the wastewater released from 149 wells. The federal drinking water standards were exceeded for the carcinogenic benzene (41 wells), gross alpha (128 wells, gross alpha is a type of radiation caused by emissions from uranium and radium), uranium (4 wells), and radium (42 wells).203 At least 116 wells produced wastewater exceeding the federal standards for radium or other radioactive materials in drinking water more than 100 times.

3) Greenhouse gas emissions

The three main greenhouse gases (GHGs) that are relevant to the petroleum and natural gas industry are methane (CH4), carbon dioxide (CO2), and nitrous oxide (N2O). Methane’s chemical lifetime in the atmosphere is approximately 12 years. Its relatively short atmospheric lifetime, coupled with its potency as a greenhouse gas, makes methane a candidate for mitigating global warming over the near-term (25 years or so). Methane is about 33 and 105 times more powerful at warming the atmosphere than carbon dioxide (CO2) by weight, for a 100-year and 20-year horizon respectively.

New estimates U.S. Environmental Protection Agency

Recently, the U.S. Environmental Protection Agency (EPA) has re-estimated the GHG emissions from the petroleum and natural gas industry. It’s earlier estimations were from 1996. At that stage methane emissions were not considered to be so powerful at warming the atmosphere. In its new study, published in November 2010, the EPA found that CH4-emissions had been significantly underestimated. In its new estimate, the U.S. petroleum and natural gas industry emitted 317 million tonnes of greenhouse gases (measured in CO2 equivalents) in 2006. This is a 57% increase compared to the outdated calculation method. Of the total 317 million tonnes, the natural gas industry accounted for 261 million tonnes CH4 (measured in CO2 equivalents). The EPA had revised four emission sources that were believed to be significantly underestimated: well venting for liquids unloading; gas well venting during well completions; gas well venting during well workovers; centrifugal compressor wet seal degassing venting.

The EPA also made a distinction between the GHG emissions of conventional gas wells and unconventional gas wells. For unconventional wells, it estimated that the emission factors for venting during well completions and well workovers exceed emission factors of conventional wells by a factor 200. It was assumed that all unconventional wells were completed with hydraulic fracturing of tight sand, shale or coal bed methane formations. The water that is returning to the surface is accompanied by large quantities of methane. This is the main cause of the greater methane emissions than conventional wells.

Study Cornell University

In a study published in the journal Climatic Change, the Cornell University in New York assesses the likely GHG footprint of natural gas in comparison to coal.208 The study builds, among other, upon the recent findings of the EPA. The study acknowledges that natural gas produces less greenhouse gas emissions than coal when burned. However, the authors also take into account the GHG emissions that occur during the production of coal and natural gas. This lifecycle approach of GHG emissions from coal and natural gas presents a different picture. The authors compare the lifecycle GHG emissions of shale gas, conventional natural gas (both with low and high estimates for methane emissions to the atmosphere), coal from surface mines, coal from deep mines and diesel oil.

Largely based upon the recent EPA-study, the authors estimate that 3.6% to 7.9% of the methane from shale gas production escapes to the atmosphere through venting and leaks. This is 1.3 to 2.1 times more than from conventional gas operations. The higher emissions from shale gas occur when wells are hydraulically fractured – as methane escapes from flowback return fluids – and during drill out following the fracturing.

Calculated on the basis of a 20-year horizon, the authors conclude that the lifecycle GHG emissions of shale gas are at least 20% greater than the lifecycle GHG emissions of coal. For conventional natural gas, the emissions of coal fall between the high and low estimate.

The 20-year approach by the authors reflects the need to mitigate climate change in the near- term. As methane is known to have a relative short lifetime in the atmosphere, it especially causes climate change on a short-term. The authors also calculated the lifecycle GHG emissions for a 100-year horizon. Over the 100-year frame, the GHG footprint is comparable to that for coal: the low-end shale-gas emissions are 18% lower than deep-mined coal, and the high-end shale-gas emissions are 15% greater than surface-mined coal emissions.

As for Shell, it is not known how many GHG emissions it releases in the air due to venting and leaking CH4. The company promotes natural gas (including unconventional gas) as a replacement for coal. Natural gas is seen by Shell as a bridge to a low-carbon energy future, something for the near-term. However, for unconventional gas the opposite seems true: the GHG emissions increase compared to coal in the near-term.

A further extract from this section of the report will be published in the coming days.

THE COMPLETE 73 PAGE REPORT (with reference sources)

Tax grab casts doubt on Shell’s North Sea field plan

By Ross Davidson and Elaine Maslin

Published: 30/07/2011

THE UK Government’s £10billion tax raid on North Sea operators has cast doubt on the future of another significant discovery.

Oil and gas giant Royal Dutch Shell said yesterday it would not develop the Fram field, which holds hundreds of millions of barrels of oil, until it had assessed the full extent of the tax impact.

The firm said it had submitted a field-development plan to the Department of Energy and Climate Change, but the tax rise had made even that decision more difficult.

Shell operates Fram, which is thought to hold up to 300million barrels of oil, on behalf of a joint venture with Esso.

The field was discovered in 1969 but Shell only realised its full potential 40 years later after drilling a fresh appraisal well.

A Shell spokeswoman said a floating production vessel would be used to extract oil from between six and 10 wells, achieving a peak production of 20,000 barrels of oil and 150million cubic feet of gas per day.

Should the development go ahead, production could start in 2014. Shell declined to disclose the value of Fram.

The spokeswoman said the tax rise meant the future of the development was still unclear despite the submission of a field development plan.

She added: “The supplementary tax increase and uncertainties in future returns have made the recent decision to proceed more difficult.

“The full extent of the tax impact on the Fram field will be assessed before the final investment decision.”

The discovery is the latest to be thrown into doubt by Chancellor George Osborne’s surprise decision to increase the levy by 12% in March.

Although progress on Statoil’s £6billion Mariner and Bressay developments has resumed, both were put on hold in the wake of the Budget announcement and Centrica’s South Morecambe Bay gas development was shut down for nearly two months.

Shell has said previously the extra tax would add £366million to its bill by the end of next year.

Meanwhile, the fourth-largest operator in the UK North Sea became the latest firm to reveal the cost of the levy increase.

Total revealed the levy rise had cost it an additional £52million in the second quarter of the year.

The French company reported a year-on-year drop in profits despite sales rising 9% to £39billion. Adjusted net income fell 6% in the second quarter, to £2.4billion.

Chief executive Christophe de Margerie said higher maintenance, including in the North Sea, shutdowns in Libya and weak refining margins in Europe had impacted the business.

Oil and gas production fell 2% in the period and refining margins slumped.

SOURCE ARTICLE

Mining the Canadian tar sands

From pages 19 & 20 of “Royal Dutch Shell and its sustainability troubles” – Background report to the Erratum of Shell’s Annual Report 2010

The report is made on behalf of Milieudefensie (Friends of the Earth Netherlands)
Author: Albert ten Kate: May 2011.

Shell’s largest unconventional oil resource

Due to “easy” oil getting scarce, oil companies are investing in unconventional oil resources. In general, unconventional oil production has greater environmental impacts than conventional oil production. The Canadian oil sands (often called tar sands) are Shell’s largest unconventional oil reserve. As of 31 December 2010, Canadian oil sands amounted to 26% of Shell’s proven oil reserves. Oil reserves refer to the oil production Shell has secured to exploit in the future.

The oil sands are found in the Canadian province of Alberta. In December 2010, the government of Alberta listed 47 oil sands projects that are planned, underway, or recently completed. The total investment costs for these projects amounted to USD 85 billion.

Typical mining

The extraction of oil from tar sands has many features that are typical to industrial mining: dig up the earth; use lots of energy and water; sell the product; create a huge lake with toxic waste. At Shell’s main oil sands operations, an oily tar mixed with sand, clay and water is dug up in open- pit mines. Enormous trucks deliver these goods to a place where warm water is added to separate sand from the bitumen. After this process, the bitumen goes to an upgrader. In this upgrader (that usually runs on natural gas) the large heavy hydrocarbon molecules are cracked into lighter molecules. The synthetic crude oil is then sold to refineries to make gasoline; the remainder of the process is dumped in a tailings lake.

Some oil sands in Alberta are buried too deep below the surface for open-pit mining. In these cases, the oil will be recovered by in-situ techniques. Mostly steam needs to be injected into the deposit (thermal method), causing hot bitumen to migrate towards producing wells.

Shell’s presence

Shell’s Athabasca Oil Sands Project (AOSP, Shell share 60%) presently comprises two open-pit mines (the Muskeg River mine and the Jackpine mine) and the Scotford Upgrader. The present capacity was developed for a total cost of USD 19 billion. The total resource base is estimated at 3.4 billion barrels, so at the same pace this project could last for almost 40 years. AOSP has many more mining leases along the Athabasca river that may be utilised for oil production in the future.

By mid 2011, oil production is expected to be 255,000 barrels per day.98 Due to efficiency and de-bottlenecking operations the AOSP-production is assumed to increase by another 85,000 barrels to 340,000 barrels a day within the coming 7-10 years.

Shell has several 100% positions in in-situ mining. Production in 2010 is estimated at 18,000 barrels a day, from its Peace River and Cold Lake Orion assets. Shell is proposing to increase thermal bitumen production from its Peace River leases by 80,000 barrels of bitumen per day, through the Carmon Creek project. Investments of USD 3.5 billion are proposed for this project during the period 2011 – 2016. Shell estimates that the project has a 1.5 billion barrels resources potential. The company is also assessing its Grosmont and Woodenhouse in-situ assets including vast landholdings in west Athabasca.

Greenhouse gas emissions of fuels from oil sands

In a study at the request of the European Commission, released February 2011, typical tar sand well-to-wheel greenhouse gas (GHG) emissions were found to be most likely 23% worse than GHG emissions of typical conventional oil sources. For this study, many earlier studies on this subject were reviewed. Shell usually states that fuels derived from oil sands mining have 5 to 15% higher well-to-wheel (GHG) emissions, compared to fuels derived from conventional oil and dependant on crude type & source.

It should be noted that the recent study at the request of the European Commission refers to well-to-wheel GHG emissions. Well-to-wheel emissions include the emissions produced during crude oil extraction, processing, distribution, and combustion in an engine. For all sources of crude oil, 70 to 80 percent of GHG emissions occur at the combustion phase. Combustion emissions do not vary for a given fuel among sources of crude oil. Oil companies can influence well-to-tank emissions only, which account for 20 to 30 percent of total life-cycle GHG emissions.

In the study at the request of the European Commission, the most likely well-to-tank emissions from tar sands fuel were put at 33.9 grams of CO2 per megajoule. These are the emissions that can be influenced by Shell. The most likely well-to-tank emissions for conventional oil were put at 13.7 grams of CO2 per megajoule. So, the well-to-tank emissions of oil sands are almost 2.5 times higher than the emissions for average fuel used in the European Union.

A further extract from this section of the report will be published in the coming days.

THE COMPLETE 73 PAGE REPORT (with reference sources)

Shell sees future in unconventional gas

Published: June 30, 2011 at 9:44 AM

LONDON, June 30 (UPI) — A so-called revolution in gas supplies driven in part by shale-gas reserves will allay global energy security concerns, a Shell official said in London.

Malcolm Brinded, executive director of global upstream activity at Royal Dutch Shell, told delegates at an energy summit in London natural gas is one of the best ways to cut greenhouse gases and develop a secure and sustainable energy supply.

He points to analysis from the International Energy Agency that predicts a rise in global gas demand of around 60 percent, fueled by booming economies in China and India, by 2035.

“This demand growth is being supported by the boom in the production of tight gas, shale gas and coal bed methane,” Brinded said.

North American unconventional gas reserves are large enough to meet domestic demand for the next century. Concerns about hydraulic fracturing, the method used to get natural gas out of shale rock, has resulted in bans on the method in several countries, however.

Brinded said this means energy companies must provide assurances to its customers while at the same time adhering to the highest operational standards.

“Otherwise, a public good in the form of abundant supplies of cleaner energy is at risk of being obscured by a deluge of misinformation,” he said in his prepared remarks.

Brinded noted that when unconventional natural gas operations are done correctly, there is little cause for concern.

SOURCE

© 2011 United Press International, Inc. All Rights Reserved.

Is Arctic drilling safe? Scientists aren’t sure

June 24, 2011
Escalating oil prices and diminishing supplies around the world are focusing more attention than ever on the vast petroleum reserves under the Arctic seabed, and in the relatively pristine shoreline areas of the Arctic National Wildlife Refuge and the National Petroleum Reserve-Alaska.The Obama administration is moving to speed up drilling where possible, but the nagging problem with a wholesale move into the Arctic is how much we don’t know about the remote, fragile region. How much more drilling can safely be accommodated?

Can polar bears survive the twin threats of shrinking sea ice and greater ship traffic? What about fish stocks and an acidifying ocean? Bowhead whales might be able to migrate around new oil platforms, but will they be stressed out by drilling noise? And what if their food supplies are shrinking as well?

Interior Secretary Ken Salazar in March 2010 ordered up a report on what we don’t know, and need to know, about what is happening to the Arctic environment. This week, the answer finally arrived, in the form of a long-awaited new report from the U.S. Geological Survey on what science gaps need to be filled to safely carry on the march into one of the coldest and least-understood places on the planet.

“There is significant potential for oil and gas development in U.S. Arctic waters, but this is a frontier area with harsh weather conditions as well as unique fish and wildlife resources that Alaska’s indigenous people rely on for subsistence,” Salazar said in a statement accompanying the report. “To make responsible decisions, we need to understand the environmental and social consequences of development and plan accordingly. This study is helpful in assessing what we know and will help inform determinations about what we need to know to develop our Arctic energy resources in the right places in the right way.”

If you were waiting for answers, forget it. The 292-page report doesn’t have them, but it does do a decent job of laying out the questions. And they’re big, USGS analysts say.

First, the effects of climate change have to be understood and then taken into account, the report says. Already, the number of days that seismic exploration vehicles can operate on the tundra without causing environmental harm (meaning over a protective layer of ice) has shrunk from 200 to 100 over the past 30 years.

Continued projections of even more accelerated sea ice loss “will ultimately affect nearly every aspect of the Arctic environment,” the report says, because plants and animals there are so uniquely adapted to the specific extreme conditions that have been the norm until now.

“Energy activities may exacerbate those changes, unless careful analysis of risks and tradeoffs is conducted,” the report warns, though it also recognizes that less extreme weather could reduce the chances of drilling accidents and spills.

Speaking of which — only recently have federal regulators been talking frankly about the realistic possibility of a heavy-duty oil blowout and the threat that might present in a place so far from deep-water harbors and full-scale cleanup equipment, not to mention the problems of maneuvering such equipment through the ice.USGS analysts said it will be important to learn more about cleanup technologies for icy conditions, how quickly spilled oil would break down in cold Arctic climes, migration patterns of oil — a host of unknowns.

“There have been significant advances in spill-risk evaluation and response knowledge, but concern remains that key inputs to spill models (oceanographic, weather, ecological) are insufficient and that the manner in which ecological data are included is not always clear, nor quantitative,” a fact sheet that accompanies the report says.

“Significant questions exist about the scientific and technical information needed for contingency planning and prompt emergency response (response gap) in the Arctic, which are potentially complicated by a changing climate,” it says.

Other questions highlighted in the report include:

– The impact of drilling noise on marine mammals: “Large uncertainty still exists in understanding how impacts to individual animals may affect characteristics in the populations and research is needed on this topic. An inventory of seismic sound sources used in the Arctic Ocean does not exist,” it says.

– Cumulative impacts of Arctic development. “When actions are considered individually or independently, their combined consequences — or cumulative impact — may not be fully considered or evaluated. This results in misunderstanding, and failure to consider the long range impact of multiple decisions over a large area or over time.”

It may be that there never will be firm scientific answers to the uncertainties that exist on the Arctic frontier, the USGS analysts admit, and the take-home message of their report is their call for a “structured decisionmaking” process to bring various parties to the table to work through the questions.

“Opinions on development run the gamut from ‘there is already enough science’ to ‘there will never be enough science,’ the report said. “Many of the challenges emerging in Arctic oil and gas development decision making are beyond the ability of science alone to resolve. There is no ‘silver bullet.’”

For those wanting to hear more on the state of science in the Arctic, Shell Alaska, which is hoping to conduct major new exploratory drilling in the Beaufort and Chukchi seas off Alaska next year, in 2010 put together an assessment (part two is here) of what the science shows so far (much of which has been compiled by the oil industry, as it happens, during decades of early Arctic oil and gas exploration).

A coalition of conservation groups, including Audubon Alaska, Oceana, Ocean Conservancy and Pew Environment Group, in March submitted to federal regulators their own analysis showing widespread knowledge gaps that still exist.

What if an oil spill happened at an Arctic well?

Arctic waters open for ‘cautious’ leasing after 2012

Polar bear makes marathon swim 426 miles across Arctic seas

Shell adds precautions for Arctic drilling

– Kim Murphy

Map: Top, North Slope of Alaska from Point Hope to the United States–Canada border showing principal coastal communities, Outer Continental Shelf oil and gas leasing areas, and major Federal land holdings. From the Bureau of Ocean Energy Management, Regulation and Enforcement, formerly the Minerals Management Service (2008). Side, Undiscovered oil: Assessment units of the Circum-Arctic Oil and Gas Assessment, color-coded according to the mean estimated undiscovered, technically recoverable oil resources. The open rectangle denotes the approximate location of the Alaska North Slope and Beaufort and Chukchi Seas OCS areas. Modified from Gautier and others (2009).

Shell Gets $876 Million for Canadian Carbon Capture Project

By Ehren Goossens and Jeremy van Loon – Jun 24, 2011 9:46 PM GMT+0100

Royal Dutch Shell Plc (RDSA) will receive C$865 million ($876 million) from the governments of Alberta and Canada to fund a carbon capture and storage project.

Shell and its partners will receive the money over 15 years, based on meeting certain performance targets, according to a statement today on the Government of Alberta’s website. The province of Alberta will contribute C$745 million and Canada will provide the remainder.

Shell’s Quest project would be the first oil-sands operation to capture the greenhouse gas for an upgrading plant, Shell said. Development of Canada’s bitumen reserves has contributed most of the nation’s increase in carbon emissions since 1990 when output was supposed to begin to decline under the Kyoto Protocol.

“This is the second of four grants finalized by the Alberta government for CCS, so the committed funds are starting to flow to developers,”said Cheryl Wilson, carbon capture and storage analyst at Bloomberg New Energy Finance in Washington.

“Quest is Shell’s main carbon capture project after its Barendrecht project near Rotterdam was canceled in November,” Wilson said. The Canadian authorities pledged their support for the project in October 2009.

Alberta has committed C$2 billion to fund four carbon capture and storage projects including Quest, which it says will reduce greenhouse gas emissions by 5 million tons a year starting in 2015.

Slowing Carbon Emissions

Alberta, home to Canada’s oil and gas industry, is counting on carbon capture and storage technology to help slow its output of the gas amid criticism from environmental groups and politicians in the U.S. and the European Union. Greenpeace has said the technology is too expensive to rely on for reducing carbon output on the scale needed to tackle climate change.

Shell and its competitors in the oil and gas industry are not only counting on the technology to allow them to continue exploiting fossil fuel reserves, they also expect governments to help pay for development of carbon capture and storage.

“CCS is recognized as one of the most promising technologies to reduce greenhouse gas emissions from fossil fuels,” said John Abbott, Shell’s executive vice president of Heavy Oil in today’s statement. “Government support in this important demonstration phase is essential.”

To contact the reporters on this story: Jeremy van Loon in Calgary at jvanloon@bloomberg.net Ehren Goossens in New York at egoossens1@bloomberg.net

To contact the editor responsible for this story: Will Wade at wwade4@bloomberg.net

SOURCE ARTICLE

Shell close to working in arctic waters

ANCHORAGE, Alaska, June 17 (UPI) — Shell sees a “clear path” to getting approval to drill in arctic waters off the coast of Alaska as early as July, an executive said.

Warming trends have resulted in less sea ice in arctic waters and exposed areas believed to hold vast reserves of oil and natural gas.

Shell Alaska President Pete Slaiby told the Platts news service that the company was close to getting approved to work on the outer continental shelf in the Beaufort and Chukchi Seas.

“We can now see a clear path toward getting final approvals for drilling,” he said.

Environmental groups worry about the consequences of potential disasters in arctic waters, a concern exacerbated by last year’s oil spill in the Gulf of Mexico.

Slaiby said his company was working closely with the U.S. Environmental Protection Agency to get approval for its planned drill ships contracted for work in the northern seas.

Work in the region by Shell is expected next summer.

© 2011 United Press International, Inc. All Rights Reserved.

SOURCE ARTICLE

Spoof 24 page section of Shell Annual Report published

Shell ‘apologises’ for worldwide damage in “erratum” to annual report

THE HAGUE, NETHERLANDS, May 17, 2011: During the Shell annual general assembly (AGM) in The Hague, today, Friends of the Earth International presented an “erratum” [1] to Shell’s 2010 annual report. In this spoof “erratum”, which was distributed among shareholders, Shell ‘admits’ that it is “causing a lot of unwanted and unnecessary damage” in its global oil-gas- and biofuels operations. The company also states that Shell “has learnt from these mistakes” and pledges to take “full responsibility to prevent and mitigate costs for the environment and people affected by our operations”.

The “erratum” published by Friends of the Earth International today highlights 12 cases from 5 different continents. It displays climate and other environmental impacts from Shell’s oil and gas operations, but also shows the involvement of Shell in the violation of human rights and labour irregularities, such as those resulting from Shell’s joint venture with Brazilian biofuel producer Cosan S.A., which has been linked to slave labour and violations of labour rights. Furthermore, the report lists cases of corruption and interference with politics in order to ensure business profits. The erratum, which should serve as a wake up call for Shell’s shareholders and board, is backed by an in-depth report about the 12 cases involving life threatening pollution, bribery, slavery and violation of national and international laws.

Paul de Clerck, coordinator of the corporates campaign at Friends of the Earth International, said: “We expect that the promises in the erratum we wrote for Shell will become reality. Shell is aware of the damage it is causing to the environment and of the violation of rights of local communities that it is involved in. We want the company to take measures to restore this damage and to prevent further wrongdoing”.

During the presentation of the “erratum” to Shell’s shareholders and board, today, representatives  from different communities affected by Shell’s wrongdoing were present:

Eric Dooh, a Nigerian farmer who is taking Shell to court in The Netherlands [2] for refusal to clean up oil spills in his fishponds and on his fields said: “Oil spills from Shell pipelines caused the water and agricultural land in our village to be severely polluted. We want Shell to clean up the pollution so we can fish and farm again”.

Lionel Lepine, representing the Athabasca Chipewyan First Nation in Canada said: “Shell’s tar sand operations are disrupting our traditional way of life. They are destroying our air, water, land and medicinal plants and the birds, fish and animals we depend on to sustain our people” Mr. Lepine also stated that “Shell’s footprint in our lands will have a multi-generational effect on our children not yet born, they are violating our Indigenous rights, the rights of our sacred Mother Earth and we are here at their AGM to put them on notice that we will stop them.”

Friends of the Earth International demands from Shell that the company:

*Cleans up pollution and compensates victims
*Improves maintenance of its operations to avoid new cases of pollution
*Reduces the carbon footprint of its operations
*Terminates operations posing severe risks to water supplies, health, agriculture  and biodiversity, such as high-volume gas-fracking, tar sands, Arctic and deep sea drilling
*Ceases the violation of human rights and compensates victims.

NOTES
[1] The spoof erratum can be downloaded here: http://www.foei.org/shell-report

[2] On May 19, Eric Dooh will for the first time face Shell in court during a hearing in The Hague. For more information about the court case and about what will happen on May 19, please visit: www.milieudefensie.nl/english/shellinnigeria