DOE Program Uses Stranded Gas to Revive Oil Production

July 31, 2007 // Published as a news service by IHS

The equivalent of about 45 megawatts of potential electrical generation has been identified as stranded gas.

The breakthrough is bringing previously idle oil fields back into production and could boost domestic oil production by 28 million barrels per year within the next 10 years, helping to reduce the U.S.'s dependence on foreign oil sources, said the DOE.

Stranded gas is natural gas that is uneconomic to produce because:

• The energy, or British thermal unit (Btu) content, may be too low.
• The gas may be too impure to use.
• The volume may be too small to warrant a pipeline connection to the gas infrastructure.

Non-commercial gas is sometimes produced along with oil becoming an environmental liability. This unwanted byproduct of oil production has become a major problem in California oil fields where producers have been forced to abandon sites early, leaving valuable reserves of domestic oil untapped, said the DOE.

According to the DOE, there are three ways to deal with stranded gas:

• Venting or flaring the gas contributes to air pollution without any beneficial offsets from the gas.
• Using electrical energy to re-inject the gas incurs significant extra costs.
• Shutting down oil production leaves valuable oil in the ground.

Researchers have found another way to solve the stranded gas problem. A project managed by the DOE Office of Fossil Energy's National Energy Technology Laboratory (NETL) called the Oil Field Flare Gas Electricity Systems (OFFGASES) project turned this waste gas into valuable fuel for distributed generation power units at marginal well sites in California, said the DOE.

According to the California Oil Producers Electric Cooperative, electricity accounts for 40-to-60% of the operating cost of oil production and delivery and it represents one of the highest expenses in producing marginal oil wells.

In California, equipment such as pump jacks are all run by electricity and this power must be purchased from the utility grid. According to the DOE, this figures heavily in deciding which sites remain economical to produce as oil production declines and which ones must be abandoned.

By using microturbines to harness the stranded gas and generate low-cost electricity - usually at 20-to-40% of the costs of utility grid electricity - the OFFGASES project increased oil production in previously hopeless fields.

The project conducted four field demonstrations - three have shown success - with fuels of varying energy contents and quality, said the DOE. The successes included:

• A demonstration using high-Btu gas, containing more than 1,600 Btu per standard cubic foot of gas, boosted oil production in its three-well marginal oil field from 10 barrels per day to 23 barrels per day.
• A demonstration with medium-Btu gas, which does not meet the quality requirements for commercial pipelines in California, produced 150 barrels of oil per day in a 19-well field that had been at risk for abandonment.
• A field containing "harsh" gas, which contains naturally high levels of nitrogen, carbon dioxide and hydrogen sulfide, was brought into compliance with air emissions regulations by scrubbing hydrogen sulfide from the gas using a patented sulfur-treating system.

The fourth demonstration dealt with ultralow-Btu gas, as little as 15 Btu per standard cubic foot of gas. This gas is not immediately flammable and therefore cannot even be flared; operators spiked the weak gas with purchased commercial natural gas just to flare it.

As part of the NETL-funded project, operators are now using FlexEnergy's Flex-Microturbine, a technology that uses catalytic combustors and actually runs on 15 Btu gas. While the microturbine is working, improvements are still needed and researchers are testing the equipment needed to turn this field into another success, said the DOE.

The project was awarded under DOE Office of Fossil Energy's Preferred Upstream Management Practices program, which aims to slow the decline in the U.S.'s oil production by pairing "best practices" and solutions from new technologies to an active campaign of disseminating information to domestic producers.

Source: U.S. Department of Energy (DOE) Office of Fossil Energy.