Towards the end of the life of an oil field or a natural gas field, the operating cost of managing the waste water is the main reason why fields are shut down, wells are plugged and abandoned. Oil and gas wells produce a lot of water.
For many well operators, once the water cut becomes too expensive to deal with, they’ll consider shutting the well. But if they can save money by using the water to generate electricity, the equation changes. An Ormat device has shown how that can be done and the US DOE has tallied its output.
For most well operators, faced with decreasing oil flow, the idea of investing money in more equipment makes no sense. The natural tendency in a declining business is to cut costs as much as possible. But the economics could change as the cost of energy rises, more oil or gas wells enter the last stages of their life, and the gallons of co-produced well fluids increasingly outnumber the gallons of oil produced.
In the US, this amounts to a total of between 20 and 25 billion gallons of water a year, according to the DOE. There are more than 37,000 small oil wells along the Gulf coast.
By taking a waste by-product of hot produced water and extracting value from it in the form of generated electricity, the field can stay economic longer, resulting in more total oil production and more reserves. The amount of electricity that can be produced is not enough to make it worth sending to the grid, but if it is enough to power machinery on site, reducing operating costs, and thus keeping the drilling business in the black, it becomes viable.
For this reason the US Department of Energy funded a test beginning in 2008, where Ormat pioneered a demo model for the US Department of Energy in Wyoming, in order to provide two years of data.
The DOE has now done the final tally of the output and found that the 250 kW Ormat device operated at an average power output of 225 kW and produced 586,000 kWh yearly of electricity, from 3 million barrels of co-produced hot fluids.
With the success of the project, dozens of executives from the oil and the gas industry are now touring the DOE site to find out about the economic and technical solutions provided by the Ormat device.