Co-Gen and Waste Heat Power Generation Co-Gen and Waste Heat Power Generation

Potential in the Upstream Oil & Gas IndustryPotential in the Upstream Oil & Gas Industry

53rd Canadian Chemical Engineering Conf.53rd Canadian Chemical Engineering Conf.October 29, 2003October 29, 2003

Bruce Peachey, P.Eng.Bruce Peachey, P.Eng.New Paradigm Engineering Ltd., EdmontonNew Paradigm Engineering Ltd., Edmonton

Oil & Gas Sector Energy Use

Estimated sector energy use 1300 PJ/yr Energy value = $5 billion/yr assuming $4/GJ Vents, Flares and Fugitives value = $0.5 b/yr Most producer energy use is “off-the-books”

Loss in potential revenue, not a direct cost Many energy streams (fuel, vents and flares)

are not adequately measured, monitored or assessed

First Prize - Increase Efficiency

Potential Economic Energy and Emission Reductions

Over $ 1 Billion per year for the oil & gas industry• 15% reduction in energy use = $ 780 million/yr • 45% reduction in other emissions = $220 million/yr**

GHG emissions reductions = 29 MtCO2e/yr Excludes potential energy revenue or savings from

cogeneration and other sources in the industry

* Sources: NRCan, Clearstone Engineering, AEUB ** Alberta onlyPrepared by PTAC - Petroleum Technology Alliance Canada www.ptac.org

Cogeneration After Deregulation

Husky Lloydminster (TransAlta) - 220 MW (1999) Dow Ft Saskatchewan (TransAlta) - 118 MW (1999) Syncrude Mildred Lake - 80 MW (2000) Nova Chem Joffre (EpCor/Atco) - 416 MW (2001) Suncor Poplar Creek (TransAlta) - 356 MW (2001) Imperial Oil Cold Lake - 170 MW (2002) TransCanada Power Alberta - 392 MW

• Cancarb - 27 MW; Bear Creek - 80 MW; Carseland - 80 MW; MacKay River - 165 MW; Redwater - 40 MW

Over 1750 MWe - All made possible by deregulation of generation

Co-Generation Basics

Usually use exhaust of power generator to heat a process stream.

Just requires addition of heat exchange Brings power generation up to efficiency of

steam generation.

CoGen Potential for Oil and Gas?

Oilsands Mining

Gas Plants

Thermal Heavy Oil

Petrochemicals

?

Gas Transmission

Oil and Gas Production

Upstream O&G Energy Use Distribution

0

10

20

30

40

50

60

70

ConventionalProduction

OilSands PipelinesSh

are

of

En

erg

y C

on

sum

pti

on

(%

)

Electrical Power

NG + Products

Gas Transportation Energy Distribution

Ont32%

Man15%

Sask7%

Que10%

B.C.14%

Alberta22%

Ref: CAPP Pub #1999-0009

Second Prize - Co-Generation

May, 1991 CAPP Study - “CO2 Reduction Through Energy Conservation” - Co-Gen Potential

• Main sources considered - 34 Major Sour Gas Plants• Cogeneration potential - 12% of industry energy use• Power from Cogen - 1100 MW• Almost 20% of Alberta’s Current Power Use

Actions taken back then:• Little or none mainly due to regulated power

So this prize is still there!

Why No Co-Gen in Gas Plants?

Most plants are older (1950-1980)• A few have cogen for own power needs due to necessity

Few new large gas plants being built Extremely difficult to economically and efficiently retrofit

cogen into an old plant• Has to be intimately integrated into the process• Construction while a sour plant is in operation is hazardous

to workers• Months of downtime would not be acceptable

Why no Co-Gen in Oil and Gas Production?

Thousands of facilities that are small and often isolated from power lines

Heat loads and power loads don’t match and are geographically dispersed

• Often power loads goes up over time while heating loads drop

Power companies not interested in dealing with multiple small sources

• Often a safety issue, but also a lot more hassle

Third Prize - ORC Power from Waste Heat

Organic Rankine Cycle (ORC) Power Generation

• Used in Geothermal Applications (e.g. Birdsville Australia)

• Propane, Butane or Pentane power fluid

• Adapt to use heat from any waste heat source > 60 oC

Gold Creek ORMAT Energy Converter - 6 MW

Photo from www.ormat.com

Gold Creek, Alberta

6.5 MW ORC installed on a gas turbine exhaust Air cooled process Operational since 1999 Fully automatic, self regulating Unattended (2 hr/day check by operator of station) Availability in excess of 95% Avoids 40,000 tons/yr of CO2 emissions $1/MW total for Operations and Maintenance

Taken from ORMAT Presentationby H.M. LeibowitzPTAC Climate Change and GHG Workshop May 2002

Benefits of ORC Power Generation

Power with minimal incremental fuel or emissions Uses energy that is currently lost Proven for many years in Geothermal applications

around the world Can use low quality energy streams like hot water or

exhaust gases Potential for use in compressor stations, gas plants, oil

production or thermal heavy oil

Reservoir Losses10%

Wellbore Heat Loss15%

Power15%

Produced Water5%

Vent Gas Flare5%

Treater Stack and Aerial Cooling

5%

Steam Generator Stack15%

Payzone Heating30%

E.g. Thermal Heavy Oil

Combine Cogen & ORC to Displace Power from Coal

E.g. “Geothermal Energy” - Swan Hills, Ab

Heat energy in Produced Water between 80 to 60 oC = 38.5 MW(h)

• Over 40,000m3/d produced water at 80 oC produced with the oil

» (NB - Over 1 million m3/d of produced water in Alberta)

• Could produce 2-6 MW(e) of power with a propane ORC system (more in winter)

Combine with picking up waste heat from gas plant, oil battery and compressors

• Gas Plant already has a propane refrigeration process Displace part of the 12 MWe of purchased power. Prize =

$3-6+ million/yr at this site. (over $100M/yr in Alberta?)

What’s Hindering CoGen/Waste Heat?

Efficiency isn’t a major business focus• Shareholders don’t see the energy losses

Many losses are not measured• You can’t manage what you don’t measure

Power Deregulation and GHG Rules Still Fuzzy• How do you decide if you want to be in the power game?

Everyone is overworked• Producers don’t have time to understand the potential• Aren’t any vendors for low cost systems

Systems can’t be seen to hurt oil and gas production

What is changing?

Power prices higher and volatile• Producers want to get off the grid• Feeding the grid more attractive now

Gas prices higher and will continue to go up• Increasing demand, decreasing supply• Energy efficiency needed to stay profitable

Shareholders and Markets forcing “off-the-books” costs into the open

Focus on GHG reductions

What is Needed?

Research - More people working on understanding ORC systems and looking for ways to reduce costs

• Modeling of ORC systems• Process studies• Good work for graduates which would attract NSERC and

Kyoto funding Motivation - Continued pressure on producers to

become more energy efficient Innovation - Combining the research and motivation into

profitable applications

Summary

There is enormous potential for Co-Gen and Waste Heat Power Generation in the Upstream Oil and Gas Industry

Co-Gen for large centralized heat intensive operations Waste Heat for smaller distributed generation In Canada, systems will need to be flexible, easy to

retrofit, and economic Now we need people to get interested in it!

Contact Information

New Paradigm Engineering Ltd.

10444 - 20th Avenue

Edmonton, Alberta

Canada T6J 5A2

tel: 780.448.9195

fax: 780.462.7297

email: bruce@newparadigm.ab.ca

web: www.newparadigm.ab.ca