Oil sands

Canada’s oil sands in Alberta and Saskatchewan are among the largest oil reserves in the world. In 2015, we opened the Quest carbon capture and storage (CCS) facility in Alberta to reduce our carbon dioxide emissions.

Oil sands are a mixture of sand, water, clay and heavy oil called bitumen. Shell has a 60% interest in the Athabasca Oil Sands Project (AOSP) which includes Shell Albian Sands (Muskeg River and Jackpine mines) and the Scotford Upgrader, which processes bitumen into synthetic crude oil. During 2015, we improved efficiency in water and energy use. This was part of our ambition to become more economically and environmentally resilient and competitive.

In 2015, we took the decision to stop construction of our Carmon Creek oil sands project in Alberta.
 

Managing GHG emissions

Oil sands emit 4–23% more greenhouse gas (GHG) emissions – from production through to use as a transport fuel – than the average crude oil used in the USA, according to research in 2013 by Cambridge Energy Research Associates. Since the start-up of the Quest CCS in 2015, the GHG intensity of Shell’s oil sands operation has decreased. These emissions are now closer to the average GHG emissions of North American oil. (See Carbon capture and storage).

Overall, we have reduced our energy intensity by 8%. Two programmes are currently in place at Albian: one uses waste heat from tailings to reduce the demand for steam; and the other programme has installed a pressure-reducing turbine that converts steam to electricity. We also explore advanced energy-efficiency techniques with other oil sands producers through our membership of Canada’s Oil Sands Innovation Alliance (COSIA) – an organisation that aims to accelerate the development of environmental technologies by sharing information among oil sands operators.

In 2015, the government of Alberta announced a new climate plan, which affects the oil and natural gas industry, and includes a carbon-pricing regime and an emissions limit for the oil sands. This is a policy that aligns with our own advocacy to support carbon pricing. (See Mitigating climate change).

Water use and recycling

Oil sands mining operations require water to separate bitumen from the sand. Shell is committed to exploring ways to minimise water use in our oil sands operations. We use water efficiently and recycle as much as possible: in 2015, we increased water recycling in our mines by 3%.

Reductions in our water use are due to a number of efforts. This includes increased tailings monitoring and increased reclamation capacity by transferring processed water between the mines.

Tailings

The separation of bitumen from sand creates tailings – a mixture of water, sand, clay and residual hydrocarbons, as well as naturally occurring traces of heavy metals and other chemicals. Tailings are stored in ponds to allow the sand to settle at the bottom, so that the water can be recycled and the solids can be used for reclamation. We carefully manage our tailings to prevent contamination of local surface-water courses and groundwater.

Tailings ponds at the Muskeg River and Jackpine mines covered 42.9 km² at the end of 2015. This is in line with the planned development of the mines, as the size of the ponds has increased to support ongoing production and facilitate reclamation of older ponds.

The Alberta government has introduced a new Tailings Management Framework to minimise the growth of tailings ponds and accelerate reclamation. Shell supports these regulations. We have invested approximately C$465 million during the past decade to develop technologies that speed up the drying process for fluid fine tailings, and have processed around 3.4 million cubic metres of fluid fine tailings during that period. In 2015, we processed around 5.1 million cubic metres of fluid fine tailings at our Athabasca site.

Indigenous communities

Shell has been working closely with indigenous communities in Canada for many years to reduce the impact of oil sands development on traditional land use and culture, as well as bring benefits to these communities. Since 2005, Shell has spent more than C$1.8 billion with local indigenous contracting companies (See Contractors and suppliers).

Reclamation

We aim to reclaim the land used in our oil sands mines by refilling the mined-out areas with dried tailings and restoring the contours of disturbed land. We will then place topsoil and plant suitable vegetation on the sites in question. Reclamation is an integral part of our mine development.

We work with local and indigenous communities on our reclamation work. To date, Shell has salvaged and stockpiled nearly 47 million cubic metres of soil for future reclamation. A total of 185 hectares of land has been permanently reclaimed at our Albian mines.