KPI: Energy intensity

Chart 1: Energy intensity - in our refineries

We use the industry standard Solomon Associates Energy Intensity Index (EII™) to measure and rank the energy efficiency of our refineries.

According to this Index, our refineries have improved their energy efficiency since 2002. These gains have come from operating our refineries closer to full production capacity, running our Energise™ energy efficiency programme and conducting business improvement reviews (BIRs). Since 2002, our Energise™ and BIR programmes have reduced our GHG emissions by approximately 1.7 million tonnes a year and saved us a combined $180 million annually at our refineries and chemical plants.
 
But compared to 2007, energy efficiency worsened in 2008 (see footnote below). This was partly because we had more unplanned shutdowns. It was also due to refineries running below their full production capacity, hence less efficiently, as demand for their output dropped during the year. In addition, we were unable to sustain some of the gains from our 2002-5 EnergiseTM efficiency programme.

We are stepping up our efforts to improve energy efficiency in our refineries and chemicals plants. For example, we are rolling out Energy Management Systems that allow plant operators to spot energy losses faster and immediately make small corrections to stop the losses. These systems have already improved efficiency by more than eight percent at our Geismar chemical plant in the US. They were implemented at four more plants in 2008. We plan to install them at a further five plants in 2009.

Footnote on EII; Solomon Associates changed their proprietary Energy Intensity Index calculation methodology in 2006, reported historical values have been recalculated based on this revised methodology

Chart 2: Energy intensity - in our chemical plants

Lacking a standard way in the industry to measure energy intensity, we devised our own: Shell’s Chemical Energy Index, which compares the energy used to make a tonne of product to a 2000 baseline of 100.

Based on this measurement our chemical plants have boosted efficiency by nearly 7% since 2000. In 2008, our chemicals plants were not able to further improve their performance mainly because of unplanned shutdowns in US plants resulting from Hurricane Ike. Starting up plants after a shutdown requires extra energy.

Chart 3: Energy intensity - in Exploration & Production

Across the industry, the energy needed to produce each unit of oil or natural gas is rising fast as fields age and more heavy and harder-to-reach oil is produced. Shell is no exception. Our upstream energy intensity has risen by around 27% since 2000. To help us slow that rise, we launched a major energy efficiency programme in Exploration and Production in 2007. In line with this programme, all our upstream operations are putting energy management plans in place.

Learn more about our Exploration & Production business.

Chart 4: Energy intensity - in Oil Sands

Producing petrol from oil sands requires significantly more energy than producing it from conventional oil. Our Athabasca operation includes energy saving technologies – like using lower temperature water to wash the oil from the sand, and using highly efficient cogeneration and heat integration with other facilities. Energy intensity rose slightly in our oil sands business last year due to plant shutdowns, maintenance, and construction activities. We continue to look for ways to reduce energy use.

Learn more about our Oil Sands business.