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ExxonMobil, Shell Launch Shale, Frack Advocacy Efforts

One day after Shell Oil Co. launched a public relations campaign to showcase its onshore natural gas drilling efforts, ExxonMobil Corp. on Thursday unveiled a website to "give context to the growth of natural gas resources in the United States."

The website unveiled by ExxonMobil and subsidiary XTO Energy Inc., which directs the oil major's North American gas drilling operations, will shed "more light" on how drilling is conducted and about fracking, said ExxonMobil's Ken Cohen.

"As the contribution of shale natural gas to our energy and economic security grows, people are seeking more information about how this resource is being produced," Cohen said.

Shell Oil President Marvin Odum said Wednesday the company understood the public's concerns about shale gas development and the need to have "more knowledge of how we operate. People have asked the industry for transparency; we have listened and are responding."

The U.S. arm of Royal Dutch Shell plc released a set of "rigorous" rules that it uses in its drilling operations during the 2011 Aspen Ideas Festival in Colorado. In addition, the oil major said it supported disclosing the chemicals that are used in fracking operations.

After buying XTO last year ExxonMobil became the largest gas producer in North America with a leasehold in every major shale basin in the United States and Canada. At the end of 2010 it had an estimated 15.3 Bcf of proved reserves in the United States alone. In June ExxonMobil disclosed that it had acquired another 317,000 acres in the Marcellus Shale (see Shale Daily, June 10).

Shell has a North American unconventional leasehold of about 3.6 million acres. Last year the company paid $4.7 billion to acquire East Resources Inc., which gave it a substantial foothold in the Marcellus and Eagle Ford shales (see Daily GPI, June 1, 2010). In addition to a tight gas position in the Pinedale Anticline in Wyoming, Shell also operates in the Haynesville Shale in Texas and Louisiana, and in Western Canada through the 2008 acquisition of Duvernay Oil Corp. (see Daily GPI, July 15, 2008).

Shell said it was "openly sharing these operating principles to address public concern about tight/shale oil and gas development -- especially regarding hydraulic fracturing" -- to encourage feedback from its stakeholders.

"We understand there is concern around the development of shale gas, and we must give the public more knowledge of how we operate," said Odum.

Because fracking's effect on water supplies "has attracted a great deal of attention in recent months," Shell describes in its principles how it mandates well construction to reduce the risk of contamination. Shell also said it supported disclosing the chemicals used in fracking fluids, as well as monitoring groundwater and reducing the amount of water used to drill wells. It noted, for example, that in the Marcellus Shale, it recycles "almost 100% of produced fluids, substantially reducing our fluid waste and reducing the amount of water volumes needed for hydraulic fracturing."

Shell pointed to the "abundance of natural gas" and the estimated 250-year supply estimated by the International Energy Agency (IEA), which said about half is contained in shales, tight sandstones, and coal beds. More than one-third of the global gas production increase, forecasted by the IEA over the next 25 years, could come from these sources, the oil major noted.

"If the innumerable benefits of natural gas are to be realized, we must address the concerns of citizens and share the principles that we hold ourselves to at Shell," said Odum. "These principles manage the risk we know exists when producing energy, but just as importantly, they demonstrate our operational integrity and focus on collaboration, underpinning our belief that natural gas can be produced safely and responsibly."

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