Tapping into tightly trapped gas

The world has enough natural gas to meet current demand for 250 years, says the International Energy Agency. And for most countries, using more natural gas for power generation can make the largest contribution to meeting their emission reduction targets. It emits 50-70% less carbon dioxide (CO₂) than coal when burnt to generate electricity. Shell is working to produce more natural gas and by 2012 our production will be more gas than oil.

We are using technological advances to open up sources once considered too costly or difficult to access. Production of gas trapped tightly in rock pores, known as tight gas, is a rapidly growing part of the picture. In 2009 we increased our tight gas production in North America by over 60%.

“This natural gas supply revolution has increased energy security for North America,” Peter Voser, Shell Chief Executive, said in a speech in September 2010. “And it has the potential to alter the energy landscape for the world as a whole.”

Shell and tight gas image gallery

Shell is exploring for and producing tightly trapped natural tight gas at locations across the world, including in the USA, Canada, China and Sweden.

Breaking through barriers

Tight gas is natural gas held in rock pores up to 20,000 times narrower than a human hair. Often the gas will not flow freely into a well, or it flows at a much slower rate than in normal gas reservoirs. The amount of gas that would be recovered from each well would be low but the overall volume of available gas in the reservoir can be much higher than conventional gas reservoirs. Technology is needed to produce it economically.

Shell has decades of production experience with tight gas – in the North Sea, mainland Europe, the USA and Canada. Over time we have found ways to safely develop the fields and produce the gas with greater efficiency, lowering costs and limiting our environmental impact. At our operations at Pinedale in Wyoming, the USA, for example, we are now able to drill wells over twice as fast and at 30% less cost than when we started.

Engineers must drill many more wells than in a conventional field to access volumes large enough to make a project worthwhile. Shell uses seismic sensors and advanced software to map out underground fields and pinpoint the best locations to drill. We use steerable drills to extend many wells horizontally into the rock, often up to 2.5 km (1 mile) away, from one location on the surface. This also helps to increase efficiency and lower the environmental impact of our operations.

We crack open the rock  at selected intervals within the well by pumping fluids (mainly water) into the well bore, a technique known as hydraulic fracturing. This releases the gas and helps it to flow.

Supporting a revolution

Shell started producing tight gas in the early 1950s in south Texas, but it is only in recent years that technologies and improved efficiency have allowed us to produce high volumes of gas economically from some tight gas fields. One of our current major tight gas projects in the USA is at Pinedale in Wyoming. We produce around 350 million cubic feet of gas a day at Pinedale, enough to power 1.6 million US homes. Elsewhere we are working in partnership to explore the Haynesville field in Louisiana.

In Western Canada we acquired the Duvernay natural gas company in 2008. We also produce enough tight gas in the Groundbirch area of British Columbia, Canada, to meet the needs of over 400,000 Canadian homes.

Most recently we bought land containing shale gas in the Marcellus field in north-east USA and in the Eagle Ford field in south Texas. These acquisitions brought Shell’s total tight gas land holdings in North America to over 14,500 square kilometres.

Going global

Our operations extend well beyond North America. We are producing 117 billion cubic feet of tight gas a year at the Changbei field in China – enough to power 12.5 million Chinese homes– and we are exploring for more resources in other parts of the country. In Australia we acquired Arrow Energy in 2010 in a A$3.5 billion joint deal with PetroChina, to produce another form of tight gas called coalbed methane – natural gas found in coal seams.

In Germany we are in a joint venture to explore for tight gas in the Lower Saxony Basin. And we are in the early stages of assessing potentially major resources of shale gas in Sweden and South Africa.

Treading with care

At all our tight gas operations we use hydraulic fracturing to break open rock and release the gas. This is a safe and proven technique according to the US Environmental Protection Agency, 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. Government legislation is designed to protect drinking water aquifers including from potential contamination by fracturing fluids and this is a high priority for Shell.

Fracturing typically takes place a kilometre or more (thousands of feet) below drinking water supplies. We insert concrete and steel barriers into the wells as standard practice to prevent any drilling or fracturing fluids from entering into local water supplies.

As we expand our activities we remain sensitive to specific social and environmental challenges. These vary according to region. Pinedale, for example, is situated in the rural Rocky Mountain region and teems with wildlife: antelope, mule deer and sage grouse are common here. We have implemented a number of environmental measures with the aim of protecting local biodiversity, keeping air and water clean, and reconstructing the land once drilling ends.

In the Shaanxi Province of China we have supported a programme to train doctors and we have helped to develop and equip schools.

China and Europe are not yet experiencing the same transformation in energy security as North America. But tight gas is expected to play an important role in providing these regions with a cleaner, more secure energy supply and we are working to develop its potential.