Shell invests $53m in solar power ... to increase oil production

Shell is investing millions of dollars into solar power equipment that will ultimately be used to increase the use of fossil fuels.

While the idea of developing renewable energy solely to boost oil production may seem somewhat contradictory, there is a clear financial incentive for the Dutch company.

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Shell is teaming up with a sovereign investment fund from Oman to invest $53 million into the project.

Glasspoint Solar will install aluminium mirrors near the oil fields that will concentrate solar radiation onto insulated tubes containing water. The heated water will then generate steam that is injected into oil fields in order to recover heavy crude oil. In economic terms, the project makes perfect sense as the fuel costs associated with this solar technology are almost zero.

Shell has earmarked the oil fields of Oman as the first test area for the project, but the solar technology has the potential to increase oil yields across the globe. The firm also hopes that the equipment could be used to reduce greenhouse gas emissions associated with oil production.

Countries like the US and India, in particular, are likely to be interested to hear of the project's success. Both nations have substantial oil reserves, but are unable to utilise them due to the high financial cost involved in heavy oil recovery.

Glasspoint Solar has been testing the project since 2011, but now plans to implement it on a larger scale across the oil fields in Oman. The technology is expected to cut greenhouse gas emission by 80 per cent compared to the traditional way of extracting heavy oil.

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Despite this, many environmentalists are likely to be concerned over the new project. The widespread implementation of cost-free solar powered oil production will see the exploitation of previously unusable oil fields and ultimately, the increased production of fossil fuels.