East Texas gas company looks to cheaper power solution
Powering the Pump
Texas' natural gas is big business. Producers pump the invisible energy source out of the ground at the rate of 5.1 trillion cubic feet per year and a value of more than $100 billion, making Texas the leading producer in the United States. But taking natural gas from the ground and compressing it into pipelines for shipment to customers, both residential and commercial, can be an expensive process.
Preparing natural gas for pipelines takes power--and lots of it--and that costs money. For smaller gas producers in the state, the struggle to stay in business sometimes leads to innovative measures to keep the pumps moving.
"Carole [Keeton Strayhorn] coined us as 'mom and pop'--the small engines that run our economy," said Scooter Griffin of Kilgore's Geo Vest Inc.
Geo Vest produces up to 18 million cubic feet (MMcf) of natural gas per day. The company converted almost all of its gas compression engines from natural-gas-powered engines to engines powered by electricity.
A change in power
Typically, the same well supplying natural gas to consumers also runs the engine that compresses the gas into pipelines. Griffin began switching his company's compression engines over to electricity in 1991.
"We've been doing it for several years on a small scale," Griffin said. "We started with 40-horsepower (HP) motors and are up to 800-HP motors now."
Electric compression engines are not new but are not generally seen in large-scale applications. A 1,200-HP, natural gas-burning compression engine, called a driver, can burn as much as 340 thousand cubic feet (Mcf) per day, according to Griffin. At about $5 per Mcf, a figure Griffin used to reflect a recent average price for natural gas, that's about $1,700 a day in fuel costs. Electricity easily beats that with a cost about $600 per day, Griffin said.
"Electricity costs money, too," he said. "But even if you double the cost of electricity, that's $1,200 a day versus $1,700."
Griffin said the electric engines also save the cost of motor oil--about $800 monthly--spark plugs and other maintenance costs. Geo Vest switched from gas to electric on 14 of its 16 operable drivers.
There are electric compressors available for purchase, some with dual capacity to burn gas as fuel or use electricity, but new systems can be expensive. A standard, 1,000-HP natural gas package runs about $700,000. Griffin bought used equipment and refurbished it for Geo Vest's needs, including two 800-HP models that had been sitting idle and were converted for about $600.
"When you can take an old vehicle out of the junk pile and make it run in a good way, there's got to be some good come out of that," he said. "If you can convert 10 of these [drivers] a month, the dollar savings is tremendous, and the production can increase as well because you're not tapping into your supply as a fuel source."
Protecting that supply has taken on its own share of importance.
"In Texas today, we've found all the good stuff," Griffin said. "If you're pumping 2 MMcf the first month, you'll be down to 5 Mcf in two months, but it'll hold that for a long time."
Griffin said that because of declining supply, producers should reserve their natural gas to sell on the market, rather than to run their own machines.
"We have to break away [from the traditional method] sometime, and the time is now," he said.
But whether or not this type of power conversion will be an industrywide trend remains to be seen. Today's high natural gas prices make it cheaper to run electric-powered equipment, but that may not always be the case, according to A.L. "Poley" Guinn of Houston-based Hanover Compressor Company's Kilgore office.
"It will not fit all applications by any means," Guinn said. "And if the price of gas goes down, it may make more sense to go back the other way."
Hanover Compressors manufactures compression drivers for the oil and gas industry, and Guinn agreed the savings in fuel costs would be noticeable for gas producers. But he added that large amounts of horsepower need large amounts of electricity, which can be problematic in the often-rural settings of the natural gas industry.
"Unless you've got a lot of power to run electrical motors, it's hard to do with big horsepower engines," he said. "If you're close to a power pole, it's not a problem; but if you're four or five miles from a power source, then it can be a little difficult."
Time will tell if gas to electric conversion grabs a strong foothold in the Texas natural gas industry, something Guinn said will be hard to do.
"I don't see that that particular process will put a huge dent in the natural gas process," Guinn said. "It's a new concept, but like others, it has its little glitch, and that's the problem of having a nearby power supply."
Electric motors also produce fewer emissions than gas-powered engines, but Guinn said the reductions are probably not significant on a small scale.
"You have to be talking about big horsepower to worry about emissions," he said.
The replacement of gas-burning compression drivers with electric drivers does reduce emissions at the compression site. In 2002, internal combustion engines in Texas produced about 248,800 tons of emissions in the oil and gas extraction, production and distribution process, according to the Texas Commission on Environmental Quality (TCEQ).
"Gas-fired engines tend to be about the highest NOx-(Nitrous Oxide) emitting equipment in the industry," said Randy Hamilton, a TCEQ air permit engineer.
There are engines in the gas fields today that were built for service as far back as the 1930s, a testament to their durability but also remnants of an era before today's air quality concerns, Hamilton said. Moves by the industry towards cleaner air are welcomed by TCEQ.
"The bottom line is, it's really great when the market moves in the same direction as what we're looking for in reducing emissions," Hamilton said.
Exactly what the savings would be remains to be seen, Hamilton added, because changing over to electricity for fuel means emissions increases from an electrical generation facility, something that has not escaped the notice of the U.S. Environmental Protection Agency (EPA).
"We have not done any studies of this particular type of replacement to decide if [overall] this is a significant reduction," an EPA spokesman said. "It's going to increase emissions from the generation facility. It's much too early to tell, but it does have potential."