Shell, UT to study better shale production method

HOUSTON –Shell Oil is donating $7.5 million to establish a program at the University of Texas at Austin to study improved methods for extracting oil and gas from unconventional rock formations containing vast energy resources. 

The 5-year program’s chief goal is to enhance understanding of the subsurface characteristics of shales, coalbed methane and other tight, complex formations so resources can be extracted more efficiently and economically, as well as in a more environmentally sensitive way, said Scott Tinker, director of UT’s Bureau of Economic Geology, which will manage the program.  

“At the end of the day, everyone wants to know what the best answers are,” he said.

Oil and natural gas activity is increasing in shale formations from Texas to New York and oil companies are beginning to export the technology to countries outside North America.  

Shale gas, tight gas and coalbed methane accounted for 50 percent of U.S. natural gas production in 2009 and could rise to 75 percent by 2035, the U.S. Energy Information Administration estimates. 

But critics complain the leading exploration and production methods threaten groundwater supplies, sully the air and harm the landscape. 

Officials of UT and Shell Oil, the Houston-based arm of European oil giant Royal Dutch Shell, said the two institutions will work to develop new ways to discover and safely produce unconventional gas and oil.  

The agreement is an important milestone in Shell’s effort to bring more energy to market through innovation, Shell Oil President Marvin Odum said in a statement.

It is also one of the largest university collaborations ever undertaken by Shell, spokesman Jaryl Strong said. 

Exxon Mobil Corp., the nation’s largest natural gas producer, has a similar research program in place at the University of Texas, and the school works with dozens of other oil companies around the world on complex energy problems, Tinker said.  

The new $7.5 million infusion from Shell won’t necessarily solve issues around shale gas, he said, but “it’s a good start.”