ELECTRICAL POWER COST REDUCTION METHODS IN OIL AND GAS FIELDS

Based on a workshop sponsored by PTTC’s Central Gulf Region on October 13, 1998, in Shreveport, LA, and March 24, 1999, in Lafayette, LA.

BOTTOM LINE

Operators can reduce electrical power costs by improving artificial lift efficiencies, using total well management, generating their own electricity, and seizing opportunities created by electric restructuring.

PROBLEM ADDRESSED

Electric power can account for 10 to 40% of total lifting costs. At lower oil prices, the impact of lifting cost reductions on reserve economics is amplified. To reduce power and lifting costs, operators must employ a systems approach, understanding the well and lease equipment and evaluating a variety of options. While no one solution will apply to all situations, there is a proven methodology for tackling the problem.

KEY WORDS:

Electrical Power Costs, Optimizing Artificial Lift, Well Management, On-lease Power Generation

SPEAKERS

Improving Rod Pumping:
Russell Ott, Artificial Lift Solutions, Inc.

Well Management:
Dieter Becker, Echometer Co.

Electric Restructuring:
David Dismukes, LSU Center for Energy Studies

Self-generation of Electric Power:
John Gibson, Global Power Systems LLC

Case Study:
Ray Lasseigne, TMR Exploration, Inc.

TECHNOLOGY OVERVIEW

Total well management analyzes the reservoir, wellbore, downhole pump, rod string, beam pump, prime mover, and other components as one entity. Wells with a pump efficiency of less than 35% should be further studied. For those above 35%, it may be necessary to conduct more analysis if the wells have a high producing bottomhole pressure or fluid level. An evaluation of the inflow performance can determine if more production is possible, while a pump performance test can determine leakage. It also is important to check the counterweight balance and size of the prime mover as compared to calculated requirements.

The total well management process takes less than three hours per well and can lead to significant savings. Timers and pump-off controllers are one option to increase savings. Pumping during off-peak hours also can reduce power costs; some operators have shown that it can be done without sacrificing production. Operators should understand the components of their power bill and analyze bills closely to identify savings opportunities. Negotiating win-win agreements with utilities is a possibility. Operators also have the option of self-generated power.

Opportunities from Electric Restructuring.
Historically, the power industry has been vertically integrated, with the utilities generating, transmitting, and distributing electric power. In 1978, the Public Utilities Regulatory Policy Act (PURPA) allowed nonutilities to generate electricity. Since then, non-utilitygenerated power has doubled. Wheeling or bulk power transfer between utilities is common. Also, regulators are disallowing portions of generation investments from base rates, which encourages non-utility generation and demand-side management. Smaller, lower-cost generators with shorter lead times and higher operating efficiencies make self-generation more feasible.

This trend toward self-generation of power is expected to continue, as the further-restructured electrical market will unbundle operations, establish independence for the transmission system, and create a new marketing structure. Prices will vary considerably, pressuring endusers to make energy-efficient decisions and minimize risk. In addition, the legal impediments to power selfgeneration will be dropped. Large users, including those in the oil and gas industry, must determine whether self-generation makes sense for them. With it, portions of transmission and distribution costs may be avoided, and self-generated costs will fluctuate less than utility rates. Those using some of these technologies also may be eligible for tax breaks.

Self-Generation. The savings from electrical self-generation, which can be significant, are affected by the utility’s rates and demand charges; the cost of fuel; and the cost of equipment. For a 275 kw load, with utility power averaging $0.05/kwh and fuel costing $2 per mcf of gas, annual savings approach $80,000. Induction generators, which are excited by utility power, operate in parallel with the utility system and match its frequency and voltage. Self-excited synchronous generators are subject to significant frequency and voltage variations. Stand-alone synchronous generators must be oversized to handle startup, while induction generators can be sized for steady load, with extra power for startup provided by the utility.

CASE STUDIES

Counterweight Balancing. Optimizing the counterweight balance on rod-pumped wells reduces power costs. Artificial Lift Solutions, Inc., noted how power costs for 12 wells (and an injection pump) on the University Waddell lease was reduced by 16% after properly balancing counterweights. These savings were calculated from power bills for three months before and after the counterweights were balanced.

Total Well Management. Cobra Oil & Gas operates five wells on the Vogtsberger lease in Texas. One of these wells (RVOGTA8) pumped 8.2 barrels of oil per day (bopd) and 35 barrels of water per day (bwpd) on a rod pump. A well performance analysis, conducted by Echometer, looked at the well’s history and diagnostic data from the acoustic liquid-level measurements, dynamometer tests, and a pressure buildup analysis. It showed that the downhole gas-separator system did not perform properly. The pump fillage was low, even though liquid existed above the pump, which had ample capacity for the well. Cobra installed an improved gas separator and a timer, allowing intermittent operation. As a result, electrical efficiency increased from 35 to 59 percent, cutting power costs in half. Payout was projected at about eight months.

Power Shaft System. By using an additional shaft and sheaves, power shaft systems slow conventional beam pumps, reduce equipment wear, and help reduce costs. Increased torque may allow smaller motors to be used. Larger pumps are required for slower operations. TMR Exploration tested a power shaft system in Louisiana’s Carterville Field. Prior to installation, the well was pumping 10 bopd and 90 bwpd at 11-1/2 strokes per minute (SPM) with a 1-1/2-in. pump. With the new system, the unit was slowed down to 3-1/2 SPM using a 2-in. pump. The well operated for six years before it needed a pulling job.

Self-Generation of Electricity. TMR Exploration, Inc., has 90 producing (and 3 saltwater disposal) wells in the Murray Lake Field, in Webster Parrish, Louisiana. The field produces 510 bopd, plus over 11,000 bwpd. TMR operates five induction generators (one as a backup) that operate in parallel with the utility system. They yield all the necessary power on this 500 kw lease, although utility power is still available for electrical motor starting and peak requirements. Since 1990, TMR has saved $1.3 million by generating its own electrical power.

CONNECTIONS:

Dieter Becker,
Echometer Co. 
5001 Ditto Lane Wichita Falls, TX 76302
Phone 940-767-4334, Fax 940-723-7507

David Dismukes,
LSU Center for Energy Studies
One Fraternity Circle, Baton Rouge, LA 70803-0301
Phone 225-388-4343, Fax 255-388-4541, E-mail david@enrg.lsu.edu

John Gibson,
Global Power Systems LLC
5410 Kennon Lane, Bossier City, LA 71112
Phone 318-741-1073, Fax 318-741-1175

Ray Lasseigne,
TMR Exploration, Inc.
PO Box 5626 Bossier City, LA 71112
Phone 318-746-3616, Fax 318-746-6218

Russell Ott,
Artificial Lift Solutions
PO Box 9789, Midland, TX 79708
Phone/Fax 915-697-5541

For information on PTTC’s Central Gulf Region and its activities contact:
Bob Baumann, Special Assistant to the Provost/Energy Programs,
Louisiana State University, One East Fraternity Circle, Baton Rouge, LA 70803-0301
Phone 225-388-4400, Fax 225-388-4541, E-mail rbaumann@lsu.edu

Disclaimer: No specific application of products or services is endorsed by PTTC. Reasonable steps are taken to ensure the reliability of sources for information that PTTC disseminates; individuals and institutions are solely responsible for the consequences of its use.

The not-for-profit Petroleum Technology Transfer Council is funded primarily by the US Department of Energy’s Office of Fossil Energy, with additional funding from universities, state geological surveys, several state governments, and industry donations.

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