News

Shale Flares Heat Up Natural Gas Production, But Not For Long

Tension between the Environmental Protection Agency (EPA) and the oil industry is decreasing as air emissions and flares from shale oil reserves come under regulation. While the EPA gives companies until January of 2015 to fully comply with the new regulations, gas and oil companies have to start changing their ways now to meet that target, especially regarding flares. The regulations are expected to cut emissions that harm air quality by 90 percent, per the Washington Post.

Why Flaring Happens

A byproduct of increased production to meet the increased demand for NG, flares allow dangerous gases to burn off. These occur when there is a lack of storage space for produced gas. The flares allow equipment to keep up with the flow of gas, and get released through pressurized valves in the equipment. Not only does flaring release methane and other gases into the air, it wastes energy to the tune of $100 billion of unused gas a year, according to Reuters.  The shale reserves fueled unprecedented expansion of America’s gas production, but the infrastructure that allows gas to be captured and stored before flaring hasn’t grown as fast. The result: Industry waste, energy lost, missed growth opportunities, and environmental concern. The World Bank estimates that gas emitted in flares is roughly equal to the annual energy consumption of France, about 360 tons of CO2, again per Reuters.

Green Solutions

Complying with EPA regulations is good for public opinion and for profits, as the wasted fuel can be used — thereby saving costs at gas production sites — or sold. How can companies cut down on flaring to get on the right side of the EPA regulation? For example, plants could turn the gas flares into power, cutting down on energy consumption and fuel waste. Ways to comply include:

  • Installing pollution-control equipment: Many of the newer wells are already capped with pollution-controlling equipment to cap flares. Existing gas production sites can be retrofitted with these measures to cut flares. So-called green completions are mandatory after 2015 and voluntary beforehand.
  • Implementing Technologies to Reuse the Gas: Escaped gas can be piped back into the ground and used to push more gas toward the surface, increasing production, per GE. Escaped gas can also be stored and used as fuel with compressor technologies. GE is now doing this in Qatar.
  • Decreasing Isolation: Flares often occur when captured gas cannot be put into the pipeline. Extending pipelines gives remote sites storage access and prevents flares.

Are you inspired by the cost savings of reusing produced gas? What’s your plan to green for 2015?

-Mark

Eurozone and the US Economy

In an election year, news coverage focuses mostly on local and national politics so it can be hard to follow world news. Since the 2008 financial crisis, however, smaller European countries including Greece and Ireland, as well as major Euro players like Spain and Italy have been struggling to stay afloat. Now the Eurozone is teetering on the edge of collapse with countries like Greece threatening to leave and revert to their old currency. What is happening on the global stage and what effect does it have on U.S. gas and oil price?

Recently, the BBC reports that the Eurozone agreed to a deal that relaxed strict European lending laws that have made it so hard for struggling countries to get back on track. These measures should help Italy, Spain, and Greece; however, some experts worry that Greece is only postponing a decision to leave the Eurozone. By and large, though, this spells good news for Europe and global stock markets. Markets rose after the deal was reported.

While Europe seems to be getting a handle on finances, its countries are a bit stuck in the mud, so to speak, when it comes to growth. This means less U.S. trade and a sluggish American economy because Europe’s our largest trading power. Other ways Europe affects our economy:

  • U.S. banks invest in European banks
  • Stagnant European market spells reduced profit for American companies
  • Stocks and money markets are losing value

As the U.S. recovers financially, chaos in Europe could lead America back into recession. Financial drama on the global stage makes everyone nervous because it hits close to home. There’s another way the Eurozone crisis can affect Americans: Oil prices that impact everything from the gas in your car to the cost of the diesel fuel for the generator that can power your AC in a summer brownout.

After this great deal hammered out in Europe, oil prices stopped their 90-day downward slide and rose over 9%. At the same time, gas prices hit a 6-month low. Sanctions on Iranian oil and a tanker leak in the North Sea mean oil supply will be limited for some time. Will oil and diesel prices climb higher? Are you prepared to foot the bill if they do?

Let’s face it: Summer is a time of high energy demand. When the grid overloads, hurricanes loom large, or storms knock out power lines, generators can keep your company operating and power that much-needed AC. Natural gas generators cost less to operate than diesel generators. With oil prices climbing and European instability having the potential to make or break the cost of diesel, which type of fuel do you want to be putting in your generator?

-Mark

Cost of Diesel and Natural Gas Generators

When planning to purchase or to rent a generator for your business, the kind of fuel that the generator uses–typically natural gas or diesel–may not be your primary consideration. If you’re ordering a generator because a storm is imminent and you need to know that you’ll have the power you rely on to do business, chances are that you’ll be more concerned about weathering the storm. If you’ve lost power in storms before, you know it can damage your bottom line to go without power for anywhere from a few hours to a few weeks. I’m sure you never want that to happen again! Many people purchase a generator for their business for that very sense of security.

True Generator Costs

When shopping for a generator, you’ll get more bang for your buck if you can remember that generator costs don’t end once you purchase the unit. No matter which type you go with, generators require fuel to run. If you choose a diesel generator, a fuel supplier will need to deliver that fuel to your generator.

Oil Prices and Generators

While natural gas prices fluctuate throughout the year, the fuel is widely abundant in the U.S.–and the world–and less expensive than diesel. In May, 2012, natural gas cost $2.30 per million BTU, a measure equivalent to approximately 8,000 gallons. In contrast, diesel fuel cost $4 per gallon in May, 2012, per CNN. Since late 2008, oil prices have been rising steadily; by June, 2012, oil cost double what it did in December 2008. Because the cost of oil fluctuates extremely, the cost to refuel your generator can go up hundreds of dollars overnight and could continue to rise unchecked.

At Worldwide Power Products, we offer a range of natural gas generators, both new and used, for rental and for sale. By choosing a natural gas generator, you will avoid paying more over time for your generator in fuel costs. Do you have a story about rising oil costs impacting your bottom line? I’d love to hear it!

-Mark