Using natural gas to mine for oil sands – a strategy by Shell and Caterpillar

Image from Shell’s 2012 oil sands performance report

Shell Canada and Caterpillar are joining forces to save money and reduce emissions from oil sands mining in Alberta.

The companies have signed an agreement to test a new truck engine which would run mainly on liquefied natural gas (LNG) rather than diesel.

By using LNG, the pair expects to reduce emissions and costs. LNG will displace most of the diesel power resulting in a duel fuel truck. Through the agreement, Caterpilar will test the design at Shell’s oil sands operations located near Fort McMurray.

“To succeed commercially in the future, we believe we have to be able to compete both economically and environmentally. We believe that is what Canadians want,” Shell’s VP of oil sands, John Rhind, said in a statement.

Shell will also retrofit its existing trucks with the new engine for the trial.

Caterpillar says most of its customers are asking for LNG-powered equipment in order to reduce costs and environmental effects.

Field testing of the new trucks will last up to one year and will begin in 2016.

Mine trucks are a substantial source of CO2 emissions, as Shell noted in its 2011 performance report. The new trucks should help reduce oil sands operations’ contributions to emissions, which are currently 4-18% higher than from the average barrel of crude oil consumed in the US.

Shell Canada’s oil sands operations include the Muskeg River and Jackpine mines and the Scotford Upgrader, which it runs on behalf of the Atahabasca Oil Sands Project – a joint venture between Shell, Chevron and Marathon Oil.

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