When Brian Hageman of Arizona-based Deluge Inc. developed an engine to run on renewable energy sources -- biomass, solar or geothermal -- he had no idea that one day his technology would be used to optimize stripper wells, breathing life back into marginal fields.
"We always figured we were going into environmental or agricultural applications," said Hageman, the inventor of the pollutant-free Natural Energy Engine™. "The crude oil industry just sort of happened. Our future revenue base is going to be based upon the sale of crude oil."
Today, Deluge owns and operates a nine-well oil field in Kansas where each wellhead is equipped with an NE Engine™, replacing traditional pump jacks in the field. Not only is the surface footprint of the engine significantly smaller than that of a pump jack, but the operational cost savings achieved from replacing conventional diesel- and gasoline-powered engines with geothermal energy also are significant.
Hageman estimates that a nine-well field requires about 16 horsepower to operate -- using his engine, Deluge has cut that energy consumption to about two horsepower.
"It works better, mechanically, when you have your engine right over the borehole," Hageman said. "Your line of power on a horse head electrical motor goes from the crank case through the cantilever system and into the borehole. The transfer of power is much more efficient with the NE Engine™," he said. "We have a whole lot more torque at low RPMs."
Geothermal waters represent a new form of abundant and cheap energy that's sequestered in underground aquifers across North America. The renewable energy stored in these subsurface aquifers is sufficient to power geothermal heat pumps and heat exchangers, generating electricity for municipal, residential and various industrial applications.
San Bernardino, Calif. boasts one of North America's largest space heating projects -- electricity produced from low-temperature geothermal waters powers 37 municipal buildings, including a 15-story high-rise. Geothermal waters are transported through 15 miles of pipelines within the city.
Assets for Strippers
Historically, the economics of geothermal energy projects have failed due to the high costs associated with drilling and completing wells. The oil and gas industry, however, may be poised to take advantage of its unique asset base -- the inventory of well bores that tap into these warm, subsurface aquifers.
Viewed by many as a liability, the low-temperature geothermal waters that are co-produced with oil and gas are being transformed into an asset, extending the commercial lives of stripper wells.
Imagine a marriage of convenience between an end user like a municipality situated on the doorstep of a large oil field.
Liz Johnson is a geothermal officer with the California Division of Oil, Gas and Geothermal Resources. Johnson, an engineer, confirmed that California is the only state in the country to combine oil and gas and geothermal resources under one regulatory roof -- and that's because California is the country's largest producer of electricity from geothermal.
Approximately 5 percent of California's total electrical power generation originates from geothermal sources. In late 2004, the U.S. Department of Energy's Energy Information Administration issued a report on "Renewable Energy Trends," stating that electrical power generation from geothermal across the United States surpassed wind and solar combined.
According to Johnson, low-temperature geothermal waters -- and not the high-temperature steam geysers of California fame -- do not exceed the boiling point of water at the altitude of occurrence. At sea level, the boiling point of water is 212 degrees Fahrenheit.
"There's a huge amount of overlap when it comes to drilling the wells," Johnson said of the technologies employed to extract both renewable and non-renewable resources.
In California, oil and gas comes primarily from sedimentary provinces, she said, while geothermal originates from fractures in metamorphic and igneous rocks.
"Other than that," she added, "the rigs are the same."
A Heat Wave
During its R&D field trials, Deluge tested the engine in a single-well configuration at a commercial oil field in Bakersfield, Calif. The mature field produced oil from a geological formation at 2,000 feet depth, and was under steam flood, creating what Hageman called a "man-made geothermal source."
The stripper well co-produced water and oil, which were separated at surface. Geothermal fluids were run through a heat exchanger at surface, in a closed loop system. The engine contains a "working fluid," a high-pressure, liquefied carbon dioxide that is heated and cooled, causing expansion and contraction -- this change in volume pushes and pulls on a piston, creating mechanical energy.
In turn, the piston drives a pump that lifts oil from the well bore.
AAPG member Joel Renner agrees with the concept behind Hageman's engine design -- it's critical to place the heat exchanger on the surface, and not down the well bore.
Renner is the group leader of the geothermal program for the Idaho National Engineering and Environmental Laboratory in Idaho Falls. According to Renner, down hole heat exchangers don't work in well bores.
"If you're relying on conductivity in the borehole, you typically just don't get real good heat exchange," he said.
Renner likens a heat exchanger to a "radiator in a car," where two working fluids are separated on different sides of the unit. His Idaho-based group evaluates the economics of geothermal energy and, in particular, the drilling of wells for geothermal sources -- but his team hasn't run any economics on an application like the NE, which can reduce down costs by taking advantage of pre-existing boreholes.
With respect to tapping low-temperature geothermal for large, direct use space-heating projects, Renner said, "It might be a hard sell because people are reluctant to spend money on power generation."
However, he added, "economics should get better all the time as the cost of gas goes up."
‘Power to Spare'
Last September Deluge and the Rocky Mountain Oilfield Testing Center (RMOTC) won the 2005 Outstanding Technology Development award from the U.S. Federal Laboratories Consortium, for field-testing the NE Engine™ at RMOTC's stripper field near Casper, Wyo.
During a 30-day test, Deluge demonstrated that its engine was capable of pumping an oil well at depths ranging from 400 to 1,600 feet, with power to spare.
Brian Meidinger, a project engineer at RMOTC, worked collaboratively with Deluge to put the engine through its paces. RMOTC's mission, according to Meidinger, is to provide a venue for innovation, and a proving ground for full-scale testing of technologies in the field under "near world" conditions.
"RMOTC shortens the timeline from a bench top to full scale implementation," he said.
Meidinger, a mechanical engineer, discussed the liability issue, and why the oil and gas industry is often reluctant to allow companies test their new technologies down producing boreholes.
"But at RMOTC the well bore liability is minimized," he said, "because a stripper well field allows us to take a certain amount of risk."
At RMOTC, Deluge conducted a two-well test configuration, using a producing oil well and a hot water supply well that produced 175-degree Fahrenheit water from the Madison Formation. A cooler water supply (68 degrees Fahrenheit) came from a nearby water storage tank. Produced waters were discharged -- by permit -- on the surface.
"For the NE Engine™, you have to have a hot water source and a cold water sink," Meidinger said.
In order to simulate a 1,600-foot-deep well test, additional weight was added to the rod string.
"We went through several prototypes," Meidinger said. "We tested the engine, and it did work. The engine seemed to have more than enough pressure for the thermal expansion; it was impressive.
"This technology uses low quality heat and gets useful work out of it," he added.
Meidinger pointed to other potential applications for the engine, including powering a desalination system through a reverse osmosis membrane, which requires a huge amount of pressure.
Kicking in Kansas
After 10 years of R&D, Deluge's 20-acre oil field in Kansas is the company's first commercial operation. The field consists of nine new oil wells, each equipped with a four-cylinder NE Engine™ at surface.
Additionally, the field contains one gas well producing from a different formation than the oil, a fresh water well and a water disposal well.
According to Hageman, this "closed loop system" uses natural gas to create the hot water, and has a cold water system with its own cooling tower.
"We're recycling those BTUs in the closed loop," Hageman said.
Hageman has created Deluge Oil Services in order to leverage on the company's new business model -- and he's actively purchasing mineral leases in various parts of the country.
Hageman also is developing a pollutant-free water injection engine, designed to reduce the power required to pump water at oil fields.
In the meantime, he's looking for "entrepreneurial innovators" in oil and gas companies who are willing to test drive his new, energy-saving technology.