Natural Gas Use at the Wellsite: Makes Sense (and Cents)

America’s oil and gas industry has gone through many changes since it started in Titusville, Pennsylvania, more than 150 years ago. But one thing that hasn’t changed with the times is the industry’s culture of innovation – a constant drive to find new and better ways of developing and delivering the energy that supports our way of life. That’s what brought us the combination of horizontal drilling and hydraulic fracturing in deep shale formations, which is probably the best-known oil and gas innovation in decades, thanks to the hundreds of thousands of jobs it’s created and billions of dollars it’s saved consumers in lower energy costs.

The culture of innovation continues to bring down the cost and lighten the environmental footprint of responsible oil and gas development. For example, companies are starting to convert the machinery at well sites from diesel to natural gas. According to a recent report from Reuters:

“Apache Corp, the largest U.S. company focused solely on oil and gas exploration and production, is in the process of converting its first rig to run on power generated by liquefied natural gas (LNG). Canada’s Encana … already has 15 of its more than 40 rigs driven by gas, and plans to convert even more.”

Reuters says some of Encana’s gas-fueled rigs used trucked-in LNG, while others used gas from the well itself. So what’s the big attraction? Another report from Bloomberg spells it out:

“Encana, Canada’s largest natural-gas producer, reduced fuel costs 47 percent, or $830,000, compared with diesel use, at a shale-gas drilling site in the Haynesville formation which spans the border of Texas and Louisiana…

The savings were based on consumption of almost half a million gallons of fuel and average prices of diesel of $3.28 a gallon and $1.11 a gallon for LNG over a period of about 160 days. The company plans to use LNG at more of its operations…

Gas emits 20 percent to 30 percent less carbon dioxide than oil-based fuels and has a fraction of the emissions of nitrogen oxides, sulfur oxides and particulate matter, which are linked to respiratory health problems such as asthma, according to the U.S. Environmental Protection Agency.”

Another selling point, according to Reuters, is that natural-gas engines are quieter than their diesel counterparts. That could be a big help in shale-development areas that are densely populated, like the Dallas-Forth Worth region and parts of Pennsylvania. Prometheus Energy Group, which operates mobile LNG storage and vaporization units that can fuel the machinery at well sites, tells Reuters customers are lining up:

“’We’ve seen interest just kind of explode in the last six to eight months,’ said Ron Bertasi, chief executive officer of Prometheus…”

But Reuters points out there’s more than one innovation in this field:

“Chesapeake Energy Corp, the most active U.S. driller, is working to convert its rig fleet to run on diesel natural gas (DNG). Chesapeake aims to have more than 40 rigs running on DNG by the end of the year.

‘To our knowledge, this will by far be the largest rig fleet utilizing natural gas,’ Kent Wilkinson, vice president of Chesapeake Natural Gas Ventures, said.”

This may be an emerging practice, but it actually builds upon what the industry has been doing for a long time – harnessing the energy of natural gas to get it from the well to the customer. According to the Department of EnergyGreen Energy Sources, roughly 9 percent of the gas produced from U.S. wells is actually used to power the equipment that processes and transports the fuel to homes and businesses across the country.

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