Shell Invests In Solar Power-Based Enhanced Oil Recovery Technology
Talk about irony! Solar power being used to boost fossil fuel production. The idea may sound pretty weird to some, but to Shell, this is an idea worth investing millions.
Royal Dutch Shell has teamed with a sovereign investment fund from Oman to invest $53 million in a company that manufactures solar power equipment designed for increasing oil production. Glasspoint Solar Inc. installs aluminium mirrors near oil fields that concentrate solar radiation on insulated tubes containing water.
The steam generated from heating the water is injected into oil fields to recover heavy crude oil. This concept of enhanced oil recovery involves high pressure injection of hot fluids to recover heavy crude oil. The use of renewable energy like solar power makes great economic sense, as the fuel cost associated with this enhanced oil recovery technology is practically zero.
Shell hopes to employ this technology in its oil fields in Oman. The company hopes to reduce greenhouse gas emissions associated with enhanced oil recovery operations. A large-scale successful implementation of this technology could be a game changer for major consumers like India and the US. Both have substantial oil reserves, but are unable to tap them due to high costs involved in heavy oil recovery.
Glasspoint Solar has been running a demonstration project in California since 2011, and now plans to participate in a large-scale commercial project in Oman. Solar power steam generators can reduce gas consumption and greenhouse gas emissions by 80% each, the company claims.
While the financial implications of solar-powered enhanced oil recovery are attractive, with prospective output at internationally competitive prices, there could be some serious environmental issues as well. Cost-free solar power will drive down price of oil production from fields currently seen as financially unsustainable. This may further boost the production of a fossil fuel like oil.
UPDATE: A representative from Glasspoint has pointed out that:
- “This technology is tailored for regions with high solar irradiation, so the global impact is not going to be strong enough to drive down the price of oil.”
- “Although the impact on the O&G industry is significant, it’s more of a win for the solar industry.”
Image: Glasspoint Solar Inc.
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