Shell Canada – Company Critique and Comparison by Faisal SIDDIQUI # 101963673

This report evaluates Shell Canada’s environmental performance as well as their reporting
methods in their 2006 Sustainable Development report. Shell Canada is one of the largest
integrated petroleum companies in Canada. Their activities can be classified into exploration &
production, oil products and oil sands. The exploration and production activities involve
exploration and production of natural gas, natural gas liquids, bitumen and sulfur. Shell Canada
owns 60% of the Athabasca Oil Sands Project in Alberta and produces natural gas in Nova
Scotia.2 Shell also owns and operates four natural gas processing facilities in Alberta. Shell’s
Exploration and Production activities include exploring and marketing natural gas and natural
gas liquids from basin-centered gas fields in Western Canada and facilities in Alberta.1 Shell’s
Oil Sand operations include Alberta’s three main oil sands deposits. Various projects are
undertaken to mine bitumen in Northern Alberta, transform bitumen obtained from oil sand
operation into synthetic crude oil, producing oil from deeper deposits of bitumen using cold and
thermal techniques.1 Shell’s Oil Products activities include the manufacturing, distribution and
sales of refined petroleum products across Canada. They also acquire crude oil and raw materials
for refineries within Canada. These refineries operate to convert crude oil into low sulfur
gasoline, diesel fuel, asphalt, lubricants, aviation fuels solvents and heavy fuel oils.1 Shell’s
parent company Royal Dutch Shell owned 78% of Shell Canada until 2007 when they acquired
100% ownership of Shell Canada.2

An overview of Shell Canada’s Sustainable Development (SD) Report 2006 reveals that the
document is an appealing well spread out format listing various informative topics in progressive
order. The use a number of unnecessary large photographs and fonts provides an impression of
richer level of content than what is actually provided. The insufficiency of proper and detailed
label of every picture and to show its relationship to Shell’s activities reduces its legitimacy and
leaves room for criticizing. The report is primarily directed to stakeholders and that is obvious
throughout the report as with every section especially those pertaining to environmental aspects,
engaging with stakeholders are deeply stressed. Shell makes clear that based on feedback from
readers and discussion with stakeholders they have produced a shorter report than previous years.
In order to produce this shorter report they are only able to voice the opinions of limited number
of stakeholders in each section. This is found to be very questionable as they are likely to express
only the positive views from the limited number of stakeholders rather than a proper all round
analysis. Care is taken to include photographs of stakeholders particularly aboriginal
stakeholders which although space consuming, adds to the validity of the quotes.

In order to critique this report, the following sections each discuss the performance and
presentation of environmental aspects among other factors. These are a selection of those
sections that are included in the “Environment” section of the Sustainable Development report
by Shell Canada.

Air Pollution/Emissions:

As a goal of the Green House Gases (GHG) management, Shell states that they plan to decrease
emissions from their base businesses by 6 percent from 1990 to 2008. This objective seems
somewhat unrealistic since from 1990 to 2006 which is a span of 16 years the GHG emission
decreased by 4.3 percent. Therefore it appears to be quiet impossible to target a farther 1.7
percent decrease in less than 2 years. Moreover the data for 2006 shows an increase in the level
Shell Canada – Company Critique and Comparison by Faisal SIDDIQUI # 101963673

of GHG emissions from 2005 level. Table 1 below shows Shell’s voluntary reporting
methodology which shows the indirect and direct emissions and the decrease since 1990. Figure
1 shows Shell’s general trend in reducing GHG emission with respect to the 1990 level. The total
GHG emissions decreases slowly and even with the establishment of Climate Change Advisory
Panel it is not clear how Shell will actually undertake the additional 1.7 percent reduction in
under 2 years. Figure 2 shows the Sulfur Dioxide emissions for recent years. It shows a slow
improvement in SO2 emission since a steep rise in 2003 due to the introduction of Athabasca Oil
Sands Project (AOSP).

Table 1: Estimated GHG Emissions1 (Thousands of tones)

EMISSIONS 1990 2000 2001 2002 2003 2004 2005 2006
CO2 emissions
Total direct 2 6306 5997 5878 5692 5590 5672 5494 5606
Indirect 1185 1384 1455 1473 1517 1621 1581 1573
Total CO2 emissions 7491 7381 7333 7165 7107 7293 7075 7179

Nitrous oxide (N2O) equivalents 81 64 63 61 62 62 61 58

Methane (CH4) equivalents 478 521 494 482 464 462 464 467
Total other emissions 559 585 557 543 526 524 525 525
Total GHG emissions 8050 7966 7890 7708 7633 7817 7600 7704

Figure 1: Base Business Green House Gas Emissions1 Figure 2: Sulfur Dioxide Emissions1

Water Consumption and Recycling

The Sustainability Development report strongly suggests that water quality and responsible use
of water are one of the top priorities for all Shell facilities. Some of Shell’s stakeholders have
expressed concern regarding the negative impact to the local fisheries by the lowered water
levels in Athabasca River. Water from Athabasca River is the main source for several of Shell’s
oil sand projects including Athabasca Oil Sands Project (AOSP). Figure 3 shows the freshwater
consumption since 2002 at Shell’s various sites.
Shell Canada – Company Critique and Comparison by Faisal SIDDIQUI # 101963673

Shell has reported that they have been continuing

to look for ways to reduce the amount of water
intake from the Athabasca River. One method
for reduction in water use was attributing to the
ability to recycle water at the site. The
Sustainability Development report states the
river water use at the Muskeg River mine
dropped from about 21.5 million cubic meters in
2005 to about 8.4 million cubic meters in 2006.
The report also states that fresh water
consumption from Peace River dropped from
about 2.4 million cubic meters in 2005 to about
2.3 million cubic meters in 2006.

Figure 3: Freshwater Consumption at various plants1

Even though Shell has reported the reduction in water usage in 2006, the reduction can be
primarily attributed to storage of large volume of excess water on site and temporary shutdown
of a main oil transmission pipeline rather than ability to recycle water. This raises concern about
future water consumption by Shell’s plants when the excess stored water is depleted and the
main oil transmission pipeline becomes operational.

Land Usage and Preservation

Shell’s approach to reclamation as mentioned in their website is to reclaim land with ecosystems
which are comparable to or better than what was there before the beginning of Shell’s
development. Shell stresses that they do not wait for mining to finish before starting to reclaim
the land and uses innovative techniques to optimize the reclamation activities.3

However in an article by Casey Brenan, Energy and Mining Program Manager for Wildsight,
spoke disappointedly about Shell Canada’s impact on the abandoned Crowsnest Coalfield in
British Columbia. He states

“We are certainly relieved by Shell’s departure, but regret the damage that was done by
the company’s fruitless efforts. While we accept that Shell used best management
practices for the industry and complied with provincial regulations, we documented
numerous significant impacts from drilling. An open and unlined pit for the disposal of
drill cuttings, failed attempts to mitigate erosion, a substantial landslide, and Shell’s
decision to drill in the narrow valley bottom of Michel Creek were all evidence of the
unacceptable sacrifices this industry imposes on our sensitive ecosystem.”4

Based on this third party assessment, it is possible that Shell may not actively pursue reclamation
activities as vigorously as they claim to be.
Shell Canada – Company Critique and Comparison by Faisal SIDDIQUI # 101963673

Energy Usage and Conservation Schemes

As mentioned earlier, Shell has set a goal of reducing GHG emissions by 6 percent from the
1990 level. In order to achieve this Shell claims to have invested in energy efficiency initiatives
such as cogeneration, heat recycling etc. As mentioned earlier since it appears that Shell may not
be able to meet its 6 percent reduction in GHG emissions by 2008, this could be attributed to
possibly an unsatisfactory performance of the energy efficiency initiatives undertaken by Shell.

Community Involvement

In the Sustainability Development Report, Shell has stressed their extensive engagement with the
Aboriginal stakeholders. Shell claims that they understand the impact of its activities affect the
Aboriginal lives, land and communities.

As part of giving back to the Aboriginal community Shell claims to participate in initiatives that
increase employment opportunities and economic benefits for Aboriginal communities. However
in the Sustainability Development Report Shell has presented no such example of how Shell’s
initiatives achieve this objective. Shell also claims to have taken two programs to preserve
indigenous knowledge and about to initiate a third regarding the use of traditional indigenous
medicinal plants in the Athabasca region. However Shell falls short of explaining its programs in
sufficient detail or with examples. Therefore the above statements can be taken to be vague
statements and gives no testimony to what outcomes actually were gathered. One the positive
side Shell talks about its support to National Aboriginal Outreach Program providing young
Canadians with positive hands-on learning experience in science, technology and engineering
and have benefited nearly 31,000 Aboriginal youth so far. Shell also supports National
Aboriginal Achievement Foundation, with scholarships of $100,000 per year in business and
engineering.

References
[1] Nixon, A (2007). Sustainable Development Report 2006. Retrieved
August 4, 2007, from Shell Canada Limited Web site:
http://www.shell.ca/static/ca-en/downloads/society_environment/sd06.pdf
[2] (2007). Shell Canada Limited Company Profile. Retrieved
August 4, 2007, from Yahoo! Finance Web site:
http://biz.yahoo.com/ic/54/54121.html
[3] (2007). Reclamation at the Muskeg River Mine. Retrieved
August 4, 2007, from Shell Canada Limited Web site:
http://www.shell.ca/reclamation
[4] (2007). Abandonment of Crowsnest Coalfield by Shell Canada and Chevron Shows Energy
Economics Not Worth Environmental Costs of Coalbed Methane. Retrieved
August 4, 2007, from Dogwood Initiative Web site:
http://dogwoodinitiative.org/newsstories/crowsnestcbmabandoned
[5] Shook, B. Shell and Suncor Plan Oil Sands Expansions . (2007, Aug 01). Energy Intelligence
Group Inc.