Energy operators are increasingly aware of competition, not just for drilling knowledge, but also for scarce global water supplies, Shell Oil Co. President Marvin Odum said last week in Houston.

Competition has advanced innovation at a quick rate, and Royal Dutch Shell plc is attempting to be the pack leader, Odum said at the the company’s Innovation Summit. The global major on Wednesday relaunched the Shell Technology Center, which will house its largest team worldwide of researchers and developers.

One of the top innovations that Shell’s team is looking at relates to water. Producers need a lot of water to complete drilling operations, but they compete with the agriculture industry; global food consumption is forecast to increase by 50% by 2030, further straining the divide for securing water resources, Odum said.

Energy and agriculture “are so inextricably linked [to water], that if you don’t work…together, you don’t get to the best long-term solution,” Odum, who is chief of the U.S. arm of Shell, said. “It is important to us in terms of how we build this company’s long-term strategy.”

The “stress nexus,” as Shell calls it, refers to the competition for water between agriculture and energy; water requires energy for treatment and transportation; energy requires water for production; agriculture requires water and energy.

Charles Iceland, who manages the Aqueduct Alliance for the World Resources Institute, told the audience that more than 40% of U.S. irrigated crops are grown in regions with serious water shortages, some where growing oil and natural gas development is booming.

The stress nexus, Iceland said, also is critical in countries with high population density, including India and Ethiopia. Meanwhile, energy demand is expected to double by 2050, which in turn would stress water supplies for more than 50 power generation plants in energy-starved Asia.

“We are going to have to undertake large-scale adaptation to be able to manage our energy production in a quickly deteriorating water landscape,” Iceland said.

Shell’s technology center is focused on ways to conserve water. A pilot plant at a natural gas liquids facility in Qatar is testing a water purification system. Another pilot plant in British Columbia uses recycled sewage, said Shell’s Ed Daniels, who is executive vice president of global solutions.

Shell also is working to reduce its water footprint in the Marcellus Shale to capture and reuse its supplies, Odum said.

The company’s waterless hydraulic fracture (frack) technology would be the “next frontier,” said Matthias Bichsel, director of projects and technology. Some North American alternative water stimulation systems use propane.

Shell, however, is working on alternative solvents, as well as electric currents, as potential replacements for frack water. Engineers have had some initial success in a test project in Egypt, said Bichsel.

This rejuvenated center brings together in one place, for the first time in the U.S., the technological power of Shell’s science and engineering along the entirety of its integrated value chain, from finding and producing crude oil and natural gas to processing them into refined products for consumers.

The technology hub in Houston is Shell’s largest; the other two are in the Netherlands and India.

“These three hubs link to a network of other technology centers around the world which are, in turn, linked to Shell’s global businesses as well as their customers and partners,” Bichsel said. “Together, they nurture the skills, know-how and creativity that aim to make Shell the most competitive and innovative energy company in the world.”

The abundance of oil and gas resources in North America “offer a once-in-a-generation opportunity for development…Take the Haynesville Shale gas field in Louisiana, for instance…Louisiana estimates that it accounts for almost $4 billion in new household earnings for state residents. It has generated more than 30,000 new jobs in the state and more than $150 million in increased state and local tax revenues.”

But “every opportunity has risks associated with it; success is about managing those risks properly.” And there are “other energy-related issues as well…Take growing urbanization…Where will the energy come from to move people within cities? To keep them cool during the summer and warm during the winter?” Bichsel said.

To answer many of those questions, he said look no further than new technology, which “is a driving force for solutions” Shell, he said, spends more than $1 billion every year to research and develop new technologies.

Shell’s Houston center is to focus on “advancing technologies for developing unconventional hydrocarbon resources, such as shale gas, shale oil and heavy oil” and build on contributions made to develop deepwater assets, said Bichsel.

“Technology helps balance the risks involved in developing unconventional gas fields, through solutions to make drilling safer; to frack wells using less water; to reduce air emissions from drilling rig machinery; and to lessen the amount of truck traffic.”

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