Ken Carlson, professor of civil and environmental engineering and director of the Gas Technology Center at Colorado State University, breaks down the major issues confronting the oil and gas industry into four segments: efficiency, water, transportation and renewables. He explained in an interview with the Business Report:
Question: Where are producers looking for ways to streamline operations?
Answer: Colorado’s oil and gas companies are working to be more efficient before they even drill a well. Instead of purchasing oil and gas leases in a checkerboard fashion, they are now purchasing them so that they are contiguous to each other. This layout allows them to use centralized infrastructure, decrease the scale of water delivery and water collection, and use fewer drilling crews.
The advantages are fewer trucks, fewer air emissions, less disturbance of the environment and fewer traffic accidents. The biggest benefit is a reduction in costs. By concentrating the infrastructure for numerous wells in one place, costs go down.
One big concern about the development of oil shale is the emission of greenhouse gases from the operations. The industry knows that some methane is being released but it doesn’t know exactly how much. That’s why finding a way to gauge the leak and to find uses for that wasted methane is at the top of the agenda for energy researchers.
Q: Water is a scarce resource in Colorado. Are there breakthroughs in the future that will help producers be better stewards of the water they use and produce?
A: Water pollution and water recycling connected to fracking operations have been major hot-button issues in the state, so researchers are working with industry to come up with viable solutions. The state of Colorado and the Colorado Oil & Gas Association are testing out a new system that will monitor groundwater contamination in real time.
We’re in the process of putting together a demonstration site that would install what we’re calling surrogate water monitors. They measure things in real time that are related to contamination from oil and gas operations, but not the actual contaminants themselves. This project will go into operation in Weld County this summer.
As far as what to do with all of the contaminated water that is produced as part of fracking operations, CSU is developing tools that would allow the industry to clean it up and release it back into the environment more efficiently. Our belief is that when we can do it more efficiently, they’ll be driven to do it. We’re trying to create a market incentive to recycle water, without regulation.
Q: Oil and gas companies are under tremendous pressure to reduce the impact of their vehicles. Can electric vehicles play a significant role yet?
A: Because electric vehicles won’t replace fossil fuel-powered ones in the near future, the challenge is to find ways to make these vehicles more efficient. CSU’s Engines and Energy Conversion Laboratory is working on a way to convert diesel engines to natural gas.
A lot of oil field operations, drilling and fracking engines are diesel. There’s a push to convert those to natural gas, the fuel that is there. Why not use the fuel that is there? It is cheaper and much better for the environment. Diesel has a lot of air contaminants, air emissions. It is more expensive and they have to bring it in, which means more truck traffic.
Q: Are there ways to use stable, consistent traditional fuels in tandem with the highly variable renewable resources, such as wind?
A: There are ways to pair natural gas resources with wind. Because wind energy is intermittent, it needs to be used with a fossil fuel that can be turned on and off quickly. Coal is not very nimble, but natural gas can fire up and dispatch quickly. We have several researchers working on how to integrate the two into the electric grid.
How a business manages its inventory can have a tremendous impact on the financial health of the company. Managed properly, inventory can be a great source of increased margins, higher revenue, or a combination of the two.