At an onshore oil drilling site, it’s not uncommon to operate around the clock and throughout the year. Fueling the mobile generators that keep oil production high can be a costly business expense. Diesel fuel, even at today’s relatively low rates, plus delivery can add up to a significant fuel cost. Wellhead natural gas, on the other hand, is a free fuel source when extracted as part of the oil drilling process. Harnessing natural gas to operate a natural gas generator results in dramatically lower operating costs and is a greener solution compared to other ways of disposing by-product gas. Let’s look at the various reasons that operating a natural gas generator to power oil production makes business sense.
Fuel Cost Savings
The obvious advantage of a natural gas generator is fuel savings. There is no comparison between a free fuel source and one that has ranged in price per gallon from $2 to nearly $3 in the last 12 months. When you do the math, the cost savings are staggering. In a onemonth time span, a diesel generator operating 24/7 in an oilfield can consume upwards of $20,000 in fuel costs. During the course of a year, that adds up to more than $240,000 in fuel costs to operate a diesel generator, while the fuel cost of a natural gas generator is $0.
The significant fuel savings afforded by a natural gas generator translates to an eight- to 14-month total return on investment (ROI). The favorable return on investment compensates for the slightly higher purchase price compared to a diesel unit, which has an average ROI of three to five years.
Reducing Flare Gas
Operating a natural gas generator is also an environmentally friendly and economic alternative to burning associated gas, known as “flaring,” because of the visible flame that often results. Flaring wellhead gas can release carbon dioxide, a greenhouse gas, into the atmosphere. The effects of flaring have caused some areas of the country to take steps to restrict the practice. In 2014, the North Dakota Industrial Commission (NDIC) adopted flaring restrictions and established operational and financial penalties for companies that don’t comply. The NDIC regulations are intended to reduce flaring in North Dakota by more than 50 percent before the first quarter of 2016.
A natural gas generator is a logical solution for complying with flaring restrictions — it consumes the wellhead gas as a fuel source and, in turn, provides power to the well site. So, not only does a natural gas generator reduce fuel costs, it also reduces flaring emissions and helps avoid the penalties used to enforce the restrictions.
Operating a natural gas generator begins with a gas sample analysis. Untreated wellhead gas is a variable that not only differs by region, but from oilfield to oilfield. A gas analysis helps determine if sufficient methane and Btu levels are present for operating a natural gas generator. Knowing the makeup of the wellhead gas also allows the generator to be properly rated by the manufacturer based on the Btu levels and presence of hydrogen sulfide (H2S), as well as average ambient temperature and altitude. Hydrogen sulfide is highly corrosive, and associated gas with H2S higher than 25 ppm can damage the engine and shorten the lifespan of the equipment.
Even with a gas sample analysis, variables remain, including changes in gas makeup and fluctuations in pressure. If wellhead gas pressure is lost some natural gas generators automatically switch to an auxiliary propane fuel tank until adequate wellhead pressure returns.
A gas analysis is also helpful in detecting moisture and impurities, such as sand and salt, that diminish gas quality and performance. Poor gas quality represents about 75 percent of reliability issues in equipment at any given well site and in some cases can cause machine failure, resulting in costly downtime. Therefore, all wellhead gas must undergo a “scrubbing” process that removes debris and excess moisture that can de-rate a generator and shorten the engine life. Some natural gas generators are equipped with a self-contained scrubbing system, while other units may rely on separate componentry that requires additional setup, maintenance and added expense.
A knowledgeable dealer is essential when renting or purchasing a natural gas generator. Rating a generator based on the gas analysis and installation at a well site requires specialized training. However, once a natural gas generator is properly set up and regularly serviced, it typically has a machine lifespan of 30,000 hours before engine rebuild.
Shorter Service Intervals
Natural gas generators require more frequent service, including oil changes every three to four weeks, or 500 to 750 hours. On the flip side, natural gas generators don’t require diesel exhaust fluid (DEF) or a regeneration process that is common among diesel engine generators.
In fact, when you break down a natural gas generator next to its diesel counterpart, the primary difference involves the fuel source. Natural gas generators are equipped with diesel engines that are gasified to operate on wellhead natural gas. It’s a small difference but one that gives natural gas generators a distinct operational advantage within the oil and gas industry.