PBOG – When Black Gold Turns to Green

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The Permian Basin is gradually becoming a hatchery and laboratory for some forward-thinking green initiatives.

By Paul Wiseman

PBOG Magazine Cover When Black Gold Turns GreenThe oil business has always been about turning black gold into green—but the shade of green has begun to change in the last few years. While still representing money, “green” is a term that now denotes a mindfulness of the environment. It’s a direction some in the industry are embracing, while others seem to be getting dragged along, leaving heel prints in the sand.

“Green” thinking takes many forms, including reduction of the volumes of fresh water used in fracturing and other procedures, as well as the practice of recapturing vented hydrocarbons, capture of waste heat, and use of compressed natural gas in fleets.

Jared Blong, president and CEO of Octane Energy, a drilling startup, is among those who are enthusiastic about greening up the oilfield. Blong, who is the son-in-law of recently deceased PBPA Chairman Mark Merritt, is a 33-year-old entrepreneur who sees himself as new enough to the industry to think outside the box yet savvy enough to know which green initiatives are as yet impractical. The common fallback statement, “We’ve always done it this way,” is Blong’s least favorite expression. “I live to make that statement sound foolish,” he declared. “We’ve got to start behaving differently if we want the public to continue to allow us to do what we do—instead of just feeling entitled as oilmen, which is our general propensity,” he added, with a chuckle.

It was through his conversations with industry veteran Dr. Richard Erdlac, an expert in geothermal energy and other environmental concepts, that Blong learned of a way to capture waste heat and convert it to electricity. “When I heard that I said, well gosh… why hasn’t anybody ever done that before?”

Erdlac is connected with Gulf Coast Green Energy, based in Bay City, Texas, which markets a product called the Green Machine. The device, developed by ElectraTherm in Reno, Nev., collects waste heat from a variety of sources and uses that heat to generate electricity.

Basically, the Green Machine operates by transferring heat from a hot liquid, such as produced water or fluid from the radiator of a diesel generator, over a refrigerant whose boiling point is 53° F. The now-hot refrigerant turns the twin screws in an expander, which operates an induction generator. The incoming hot liquid is cooled in the process.

Octane Energy plans to use AC drilling rigs, which run 100 percent on electricity, all of which is generated on the well site by “almost locomotive-sized diesel engines running almost 24 hours a day,” as Blong describes it. The best diesel engines use only around 40 percent of the energy burned to do their work—the other 60 percent is ejected as heat. Blong wanted to recapture at least some of that other 60 percent, thereby reducing diesel fuel use and cutting CO2 emissions.

“What it looks like we’ll be able to do is to power all the ancillary trailers on the location, like the company man’s trailer, our pusher’s bunkhouse, and our crew houses,” he noted. “All of our jobs are camp jobs because the folks that we’re employing, we want to bring in from outside the Permian Basin because we’ve got a labor shortage.” Blong looks forward to furnishing electricity to those facilities for just the cost of the equipment.

He also believes that, because the producer is usually the one paying for these things, his company will be able to offer this as a value-added proposition for its own customers.

Octane is also looking at running a dual-fuel operation, which could use some wellhead gas to generate that electricity. This, in Blong’s view, would both keep the gas out of the atmosphere and save on the use of diesel in the generation process.

His vision in all this is to establish credibility as an environmentally sensitive company and to invite producers to join them in that vision. Heat capture, dual-fuel use, and other efforts do create an extra investment cost, but Blong feels it shows corporate responsibility and, “It’s the right thing to do.”

A startup, Octane plans to begin building rigs in the fourth quarter of 2013, to start drilling by the end of January 2014, and to have four more rigs operating by the end of 2014.

Meanwhile, Erdlac, no less a visionary himself, is excited about this and other uses for the Green Machine, especially its ability to generate electricity from flares. A typical unit generates 65-80 KW of electricity and, Erdlac noted, “A really large flare could require multiple units.”

Erdlac said there is interest in this technology but, as is common, people are hesitant to be early adopters. “We really need to get people off dead center on this,” he urged.

Read the full story at http://pbog.zacpubs.com/when-black-gold-turns-to-green/

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