Shell Direct GHG Emissions Up 9%

by | Apr 14, 2011

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Royal Dutch Shell’s direct greenhouse gas (GHG) emissions from its facilities rose by 9 percent in 2010, and its natural gas flaring rose by 32 percent, according to the company’s 2010 sustainability report.

Direct GHG emissions in 2010 were 75 million tons, up from 69 million tons in 2009. Shell attributes most of the rise to increased production, including higher output in Nigeria due to an improved security situation there.

Flaring, or burning off, of natural gas in Shell’s upstream business – the division that extracts oil and gas – rose to 10.3 million tons of CO2 equivalent in 2010. That was up 32 percent on 2009’s level of 7.8 million tons. The increase was mostly due to increased Nigerian production and to the start of Shell’s contract in Iraq, the company said.

Flaring made up almost 14 percent of Shell’s direct GHG emissions in 2010, the company reported. About a fifth of it was operational flaring, carried out at the start-up of facilities, or for safety reasons. Shell said it aims to minimize such flaring.

The other four-fifths was continuous flaring from facilities where there is no infrastructure to capture the gas that is produced with oil, and about four-fifths of the continuous flaring took place in Nigeria. In that country, a still-poor security situation and lack of government funding has slowed Shell’s progress on projects to capture the gas, the company said.

Another ten percent or so of the continuous flaring came from the Majnoon field in Iraq, where Shell became the operator in 2010. This flaring is likely to rise in future years because production will increase, but equipment to capture the gas cannot immediately be installed, Shell said.

“When we acquire or become the operator of an existing facility that is already flaring or venting (releasing gas into the atmosphere) it takes time before these activities can be stopped,” the report said.

The company’s indirect GHG emissions from energy purchases in 2010 were 10 million tons CO2 equivalent, 11 percent higher than in 2009. Shell estimates that the CO2 emissions from the use of its products were around 670 million tons in 2010.

Shell says that its upstream business (excluding oil sands) did improve its overall energy efficiency for oil and gas production in 2010 by two percent, from 0.83 to 0.81 gigajoules per ton of production. This was due to increased production, new fields coming on-stream and improved field management techniques. This improvement will be difficult to maintain, Shell warns, because its fields are aging and production will start to come from more energy-intensive sources.

Energy intensity in Shell’s oil sands business worsened by one percent, from 6.8 to 6.9 gigajoules per ton of production.

Shell is active in six major “tight gas”, or shale gas, projects in the U.S. and Canada, and in 2010 it acquired several more sites in the U.S. The company is also assessing potential shale gas resources in Australia, Europe and southern Africa.

The report defended Shell’s use of hydraulic fracturing, or fracking, a method which has come under attack recently from environmental groups and regulators. Shell is one of 24 gas companies participating in a national registry, launched this week, which discloses the chemical additives used in the fracking process.

In 2010 Shell filed a regulatory application for Quest, a project to capture and store over 1 million tons of CO2 per year at one of the company’s Alberta oil sands operations.

Also last year, Shell received approval for its Prelude floating liquid natural gas (FLNG) project off the Australian coast, one of the first facilities of its kind. The facility will tap into offshore natural gas fields, processing and liquefying the natural gas on board, before immediately transferring the LNG to a carrier and shipping to markets. By eliminating the need for pipelines and onshore processing plants, Shell says it will reduce environmental impacts.

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