Without a Doubt – the Hottest Investment News on the Internet

February 4, 2017

In the midst of an energy crisis, while global warming is endangering the very existence of hundreds of animal species, oil and gas companies continue to flare billions of dollars of natural resources, every year.  

Oil site flaring gas

And, in doing so, they remain the largest contributor of green house gas emissions on this planet.    
Inter-governmental Panel on Climate Change

 WHY? 

In the midst of, both, an energy crisis and an environmental crisis, the oil and gas industry is squandering billions of dollars of energy, annually, according to the World Bank. 

Of even more concern, when so much environmental pressure is being exerted on so many industries, gas flaring is increasing, not decreasing!  In January 2017,  the World Bank released its latest gas flaring data, through its special purpose initiative, the Global Gas Flaring Reduction Partnership GGFR).  GGFR revealed a surprising, and disappointing, increase in flared gas volumes in 2015/2016 flaring statistics.

So what’s the story here? Why is it, that the largest contributors to the greenhouse effect and global warming, are  increasing their polluting practices?  And why do press releases, to shareholders, indicate that these companies are improving their environmental footprint, when the opposite is true?

NO SOLUTIONS?  NO WAY!

It is not very hard to search out a number of companies, which are able to conserve the flare gas, for the oil and gas industry.  So, how are their businesses dealing with the massive undertaking of extinguishing these toxic, gas-spewing chimneys?

Larger flares, which showed economic value to the O&G companies, have been conserved.  Most, of the waste gas, is sent to processing plants, where it is separated into commodities, such as propane, butane, and methane, and then sent to market.  The flares, being reported now, are the small flares. There is not an economic value in processing these flares,  due to the capital cost, and energy requirements,  needed to process this gas.  

So they burn it.  Rather than lose profits, they simply light it on fire, and burn it, without any filtration of the toxic components, contained in the waste stream. As such, the oil and gas industry continues to be the largest contributor to the global warming effect.

SOLUTIONS

 Not only are there solutions to this wasting of valuable gas (the world bank sets the value at $40 billion of energy going up in smoke annually)  there are solutions, which have already been field tested and proven reliable, on oil sites, in North America!

Gas processing systemGOOD       There are companies that will bring portable processors to the site, liquefy the gas and haul it away to market, at no cost to the oil company.

BETTER    Even better, are companies that will bring “flared gas turbine generator sets” right to the oil site. They own, install, and operate the equipment, with no charge to the oil site.

Flare gas powered electricity generator

 BEST The flare is extinguished; heat, for processing and electricity, is produced, and sold back to the oil site, at a discount.

 

A NEW FIRE IS WARMING INVESTORS

There is a strong economic story to be told about this, as an investment opportunity.
Several points stand out:

  • the majority of oil sites in North America sustain pumping operations for 8 to 20 years, or more
  • the gas chemistry remains fairly consistent, until the well is depleted, when, either water may come in, or pressure decrease
  • a power generator, as shown above, has an expected operating life of 60,000 hours (6.8 years)
  • the power generators can be rebuilt every 5 years, at 50% of their cost
  • rough cost to install 1 megawatt of power generation is $900,000
  • revenue from 1 megawatt of power  is $657,000
  • internal Return on Investment under 2 years

CANADIAN G.H.G. INITIATIVE STIMULATES INVESTMENT

The Emissions Regulatory Board of Alberta, Canada (ERA)  has led the way forward, with the strongest financial initiative of any country, towards the aggressive conservation of flared gas.  A high tariff was set in place, and became effective in January 2017. 

This eight year program offers an unprecedented tariff rate for the conservation of emissions, containing not just CO2, but also, combustible gases that could be utilized, as energy.  Flared gas is seen as a double negative to the environment. Not only are CO2 emissions being released, but fuel, which could be used as an energy source,  is being flared, as well. Open flares are very inefficient, allowing a high volume of toxins, and pollutants, to to escape into the environment.  Mechanical combustion of this gas, in either a turbine, or internal combustion engine, achieves  significant reductions in the exhaust pollutants, as well as turning a wasted energy resource into electricity. 

Flare Gas to Electricity – A Hot Investment

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