California Program Demonstrates Value of Cutting Power Consumption

(Tech Connections Column, July 2004, American Oil and Gas Reporter)

At the depths of the oil price crash a few years ago, the Petroleum Technology Transfer Council focused on operating costs, and they are still relevant with strong oil and gas prices. Power is a primary expense for producers, especially in mature U.S. reservoirs. This is especially true in California, where very high water cuts are common, juxtaposed with high power rates and a stretched power supply system. Although critical in California, power savings are relevant across the country.

Because of its strong economic driver, energy-saving opportunities have been identified in the California oil patch. Under a grant from the California Energy Commission and the Electric Power Research Institute, a study of 1,000 wells performed by PTTC’s West Coast Region found 45 percent to be energy inefficient. Thus was born a rebate program through the California Public Utilities Commission to stimulate use of cost effective technologies.

Global Energy Partners administered the rebate program, working through PTTC’s California Trouble Shooters to reach producers. Program results were shared in a May Web-cast workshop in Los Angeles. Several producers have now participated in the rebate program, making changes in 140 wells that realized energy savings of 15,722,910 kilowatt-hours (as of May 20). Changes made to realize the savings varied widely, and several producers shared their experiences during the workshop.

BreitBurn Energy Co. LLC was able to replace older, less efficient submersible pumps with newer, high-efficiency models. BreitBurn realized energy savings of $230,000 a year, and the available rebates shortened payout to within two years. Beyond mere savings, production was increased with newer, less worn equipment.

Bentley Simonson Inc. used the rebate program to change from a KOBE lift system to primarily hydraulic rod pumps with long, slow strokes. In two sites with 39 wells, energy savings approximated $180,000 a year. A more than 50 percent reduction in pump failure rates with longer, slower strokes is saving another $330,000 a year. Rebates amounting to 13 percent of the $1.38 million project brought payback periods down to the 2- to 2.5-year range.

Berry Petroleum Company used the rebate program to install variable drives on four wells. With a rebate amounting to 29 percent of the $58,000 total cost, payout with energy savings of $21,500 a year is just over two years. Brea Canon Oil Co. reduced its power consumption by 40 percent in 10 wells by installing pump-off controllers. Fewer failures are anticipated, as well. Based on its overall experience, Lufkin Automation noted that optimized pump-off controllers generally reduce per-barrel power costs by 20 percent, and reduce repair and maintenance expenses by 25 percent, while production increases from 1 to 4 percent.

One can adjust the speed of submersible pumps nominally without damaging the equipment. Reducing frequency during high-rate periods reduces power consumption. Operating the pump at higher frequency during low-rate periods makes up the lost production. Taking this approach, Schlumberger reported on a submersible pump application where power consumption was decreased 7 percent without losing production. This does require thorough analysis and a control system, but it is an option.

Energy conservation doesn’t have to involve new motors/equipment; it can be as simple as improving the field power system. According to American Energy Management, using surge suppression, line filtration and capacitors will allow one to achieve a higher power factor and reduce line loss. Installing oil production units near the loads is more effective than correcting at a central location. When working with field systems, one benefits from synergism–that is, power savings for a total field system where individual loads have been optimized will be greater than summing individual measured savings. Bridgemark had savings of 22 percent and a simple payback of less than four months.

There were some common elements in the information shared. Few of the technologies were rocket science; that is, they have been around for some time, but for whatever reason, operators haven’t been applying them.

Other benefits (increased production, fewer failures, longer equipment life) often equaled or exceeded the benefits from power savings.

Payouts varied widely. Some changes were “no-brainers,” with payout occurring within a few months, even without rebates. Some changes, even with rebates and benefits other than power savings, took a couple years to pay out. Each situation must be examined on its own merits, and there are many instances where rebates are helpful to stimulate application.

Active participation by vendors in planning and executing changes was essential to the success of the projects.

Readers are encouraged to check the West Coast regional Web site (www.westcoastpttc.org) for the archived Web cast, or contact Iraj Ershaghi, PTTC’s West Coast director, e-mail ershaghi@usc.edu. Most of the techniques described and benefits realized are broadly applicable. The economics of any individual’s power rate structure will vary from provider to provider.