Managing Risk With Proven Technologies
by Don Duttlinger
To be a producer in the domestic U.S. in this market, you have to be comfortable dealing with business risk. Through the 150 workshops around the country annually that PTTC facilitates or participates in, we are witnessing many ways operators handle technological risk. The response ranges from those who readily adapt and apply technologies to strengthen their bottom line to others who choose not to make any changes regardless of the potential value or mitigated risk. All decisions regarding technology usage determine if the business remains viable in the future.
To apply new or unfamiliar technology, one must first learn about it. Unawareness can eliminate thousands of operators across the country from ever upgrading the way they do business. Looking at the 6,000 plus that attend PTTC workshops directly or additional attendees of other industry meetings, there are still many that are not reached directly. These are often smaller independents that do not have the time and resources to attend, particularly large regional or national meetings.
Producers who are exposed to creative ideas must determine if the application makes economic and environmental sense. Cost must be such that it can be afforded, and payout periods must be reasonably short. Producers look to case studies—examples of others applying the technology—to help them assess if technologies are proven and fit their situation. The Petroleum Technology Digest within World Oil, coupled with other case studies within PTTC's website network, is one way PTTC makes technology accessible.
State organizations also play a role in reducing risk. In California Global Energy Partners (GEP) has been selected by the California Public Utilities Commission to manage a rebate program assisting small and medium-size onshore producers (maximum 6,000 bopd) within Southern California Edison's system that are willing to optimize their pumping equipment and reduce electric consumption. The project is striving to reduce electric peak demand by 1.76 MW. For qualified producers, the program provides free energy consumption audits and incentives up to 50% of installation cost for qualified energy efficiency measures. PTTC's West Coast Region participated in the precursor study leading to GEP's program and is now assisting GEP with technology transfer as they implement their program.
It makes good economic sense for states to support their O&G industry. Reflecting on California, Rick Finken, a California consulting engineer, noted in an article in Harts E&P (Nov 2002): "As a group, the independent producers have improved recovery overall in fields that they operate. The settled production decline apparent in mid-1986 was arrested by mid-1995 and has remained basically flat since then."
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Each year PTTC's West Coast Region recognizes companies whose products/services have economically benefited producers' operations. Nominations and awards are made by members of the regional Producer Advisory Group. For 2002, the recognized companies, and their products/services, are: