Fracking with natural gas to trim fuel costs 40%

01 07, 2013 by Fuel Fix

Apache Corp this month is set to become the first company to power an entire hydraulic fracturing job with engines running on natural gas, cutting fuel costs by about 40 percent, an executive said.

The Houston-based oil and gas company has been working in recent months with Schlumberger, Halliburton and Caterpillar to advance its use of natural gas in oil field operations, Mike Bahorich, Apache’s executive vice president of technology, told FuelFix.

The goal is to reduce costs, while increasing use of the domestically produced fossil fuel and cutting emissions, Bahorich said.

Other companies, including Apache, have fueled part of their frack jobs with natural gas, but the company plans to be the first to run a full spread of 12 hydraulic fracturing pumps on the fuel this month, Bahorich said.

“What’s really motivating Apache is, if you think about it, I would challenge you to think of an idea that could generate more value for our economy and our environment than switching from oil to natural gas,” he said.

Because Apache is using modified diesel engines to power its fracking operation, it will employ a dual-fuel approach that will still use a small portion of diesel along with the natural gas, he said.

Even then, fuel costs for a single frack job are expected to drop substantially, according to the company’s calculations. Based on December prices, Apache estimates fuel costs for a frack job would drop from $123,386 on diesel to $74,473 using the dual-fuel engines.

Read more: Baker Hughes using natural gas in fracturing jobs

A typical frack job in the Granite Wash play of Texas and Oklahoma can use around 36,000 gallons of diesel, the company said.

The national average price for a gallon of diesel is $3.91, according to AAA figures published Monday.

Apache is also working with Green Field Energy Services to test engines that would run on 100 percent natural gas, Bahorich said.

The two companies collaborated on a recent effort that showed the engines would work successfully in a hydraulic fracturing job running on gas produced at a nearby well.

The use of field gas, tapped directly from a nearby well, would cut costs even further, Bahorich said.

In 2012, the oil and gas industry used more than 700 million gallons of diesel for hydraulic fracturing, at an estimated cost of around $2.38 billion, according to Apache. Switching to field gas, the industry could cut its fuel costs by 70 percent, or about $1.67 billion, the company estimated.

For now, however, the majority of efforts to use natural gas in oil field operations will revolve around engines that are converted for dual-fuel use, he said. Using 100 percent natural gas would require a new engine with a different combustion system, Bahorich said.

Still, employing natural gas, even in dual-fuel efforts, can be a challenge, he said.

First, there is the process of getting the gas to the site, which will likely be moved by truck.

While the preference might be to use liquefied natural gas, which takes up less space and would require fewer trucks and lower overall transportation costs, LNG can be difficult to find and process in some places, he said.

Compressed natural gas will likely be the fuel of choice for most fracking operations, Bahorich said.

But that will still require the gas to be hauled in on trucks running on diesel, he said. Apache and other companies are working to cut down transportation costs and emissions by switching truck engines from diesel to natural gas where possible, he said.