Shell is considering using nuclear power to operate its controversial tar sands programme in Canada.
Tar sands extraction - mining oil from a mixture of sand or clay, water and very heavy crude oil - uses a huge amount of energy and water. Environmentalists say it results inmore than three times as many emissions of carbon dioxide as conventional oil production.
Now Canadian firms AECL and Energy Alberta have proposed building a nuclear reactor near the site of Shell's vast Athabasca tar sands development. The boss of Energy Alberta has said the C$6 billion ($8.25 billion) reactor has the backing of a large unnamed company that would take 70 per cent of the reactor's energy.
A spokeswoman for Shell Canada refused to confirm that the company would take electricity from the reactor but said: "We have had a number of power options presented to us. Yes, it includes nuclear.
"If it proceeds, we would look at it based on a wide range of factors such as economics, sustainability and the energy [required]."
She added that the company was also looking at building biomass, renewable or co-generation plants.
Analysts say Canada's huge tar sands give it the world's second-largest oil reserves after Saudi Arabia.
Walt Patterson, associate fellow at think-tank Chatham House, said: "Extracting oil from tar scares the pants off me. The whole idea is fundamentally perverse in the context of our present environmental situation. To then power it with nuclear, it seems to be the worst of all worlds."
The Independent on Sunday has also been told that this year Shell Canada contacted French nuclear firm Areva to find out how much it would cost to build a reactor for the oil sands project, but did not pursue this option because of the cost. The Shell Canada spokeswoman could not confirm this.
Shell and its Athabasca partners pump more than 155,000 barrels of oil a day from the tar sands but want to increase this by five times over the next 20 years. This would need more than an extra 1000MW of generating capacity. Most of the project's existing power comes from a gas-fired plant, but gas production in North America is declining.
