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Tapping into tight and shale gas
In the coming decades the world must find more energy at a reduced cost to the environment. Natural gas is the cleanest burning hydrocarbon and is plentiful. Technology is playing a major role in helping Shell to unlock major resources of natural gas trapped tightly in rock, known as tight and shale gas, and contribute to an energy supply revolution.
The world has enough natural gas to meet current demand for over 230 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. From the extraction of the fuel to the generation of electricity, modern gas-fired power plants emit around half the CO2 of modern coal plants.
Traditionally most natural gas has come from rock formations that, once drilled, allow the gas to flow freely. But supplies of this easy-to-access gas are declining.Many of the remaining vast resources gas lie trapped tightly in dense rock, previously considered too costly or difficult to access. Now we are using advanced technology to unlock them, contributing to global growth in natural gas production.
Shell: tight and shale gas image gallery
Shell is exploring for and producing tight and shale gas at locations across the world, including in the USA, Canada, China, Australia, and Ukraine.
Breaking through barriers
Tight and shale 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 safely, economically and in a way that helps protect the environment.
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.
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 into the well bore at high pressure, a technique known as hydraulic fracturing.
The fluids are around 99% sand and water, with 1% chemicals added to help the gas flow more freely. This creates hairline fractures in the rock, opening the microscopic pores in which the gas is trapped, allowing it to flow out and be captured.
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.
Now we are producing enough gas to meet the energy needs of nearly 6 million homes from six locations in North America: Groundbirch and Deep Basin (Canada); Pinedale (Wyoming); Haynesville (Louisiana); Eagle Ford (new Texas acreage) and Marcellus Shale (acquisition of East Resources in Pennsylvania.)
At Pinedale alone we produce around 350 million cubic feet of gas a day, enough to power 1.6 million US homes. 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.
Building on our experience in North America, we are developing tight and shale gas operations globally, including in South Africa and, together with XOM, in the Lower Saxony Basin of Germany.
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 including the Sichuan and Ordos Basins.
In Australia we acquired Arrow Energy in 2010 in 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 2011, we re-signed an agreement with the largest state gas production company, Ukrgasvydobuvannia, to jointly explore and produce tight gas in Eastern Ukraine, and in 2013 we signed a production-sharing agreement to develop the approximately 8,000 km² Yuzivska field in the same area.
Treading with care
At all our tight gas operations we use hydraulic fracturing to break open rock and release the gas.
A recent study conducted by the Royal Society and Royal Academy of Engineering on behalf of the UK government concluded that fracking is safe “as long as operational best practices are implemented and robustly enforced through regulation”.
Other research, such as the European Parliament report on the environmental impacts of shale gas and shale oil extraction activities1 and a study conducted by the Royal Society and Royal Academy of Engineering on behalf of the UK government, support these findings.
The technology has been developed and refined over 60 years, and is today used in drilling thousands of wells each year. We take many steps to protect the local environment.
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.