Shales – also known as tight gas and oil – continue to play an important role in meeting global energy demand. We use advanced, proven technologies, including hydraulic fracturing, and follow our operating principles to unlock these resources safely and responsibly.
Tight gas and oil resources are trapped in microscopic pores of dense shale or sandstone rock, normally thousands of metres underground. Hydraulic fracturing has been used for decades in the oil and gas industry to extract tight gas and oil. The process fractures the rock and releases the gas and oil into the well.
The shales portfolio within Shell’s Upstream business is currently focused on the Americas. We see shales as a future opportunity, one that we expect to become a significant growth priority for Shell beyond 2020. In 2016, we reduced spending by 20% but grew our portfolio value by 13%. From 2015 to 2016, our personal safety performance measured as total recordable case frequency, improved by 40% and our process safety events reduced in number by 50%. The number of spills has also reduced by 50%.
Protecting the environment while saving on cost
In 2016, we converted the hydraulic fracturing fleet in our Appalachia operations in Pennsylvania, USA, to electric power. In collaboration with oil and gas services company US Well Services, Shell deployed a technology for fracturing that required no diesel fuel. This significantly cut our air emissions and saw a reduction in noise and water use – all while saving costs and improving efficiency and reliability.
Raising the bar with differentiating principles
Shell upholds a set of five global principles, the Onshore Operating Principles, that govern the onshore tight or shale gas and oil activities where we operate and where hydraulic fracturing is used. The principles cover safety, air quality, water protection and use, land use and engagement with local communities. We support regulations that set comparable standards. We review and update our Onshore Operating Principles as new technologies, challenges and regulatory requirements emerge. In 2016, we updated the Principles to include how we manage any potential induced seismic events from our water injection or hydraulic fracturing activities. There have been no seismic events felt on the surface that were attributed to Shell's onshore operations in the Americas.
Collaboration, innovation and continuous improvement
In our own operations, we continue to take actions to address air quality and control fugitive emissions, reducing the potential for our impact on the environment. We strive to be transparent in our activities and work in partnership with communities and others in the industry to bring about improvements in the sector.
Shell remains an active member and certified operator under the Center for Responsible Shale Development. Through our commitments, we replaced or upgraded valves linked to methane leaks – known as high-bleed pneumatic controllers - that resulted in reduced methane intensity at our Appalachia operations.
Shell continues to participate in the Environmental Defense Fund’s "Methane Detectors Challenge", a technology collaboration which focuses on improving the techniques and tools to detect methane leaks. In 2016, we screened several methane detection technologies and have chosen a Canadian facility for a technology pilot.