July-August 2004

Oil Producer Installs Cogeneration System With Ultra-Low NOx Emissions

To help meet America's growing energy demand, oil producers are striving to increase production at existing wellfields. This involves more than just drilling additional holes in the ground. Wellfield infrastructure also needs to expand—but such expansion carries a risk of increasing air pollution.

At one California wellfield, however, a new gas-turbine cogeneration system has increased the electric-power supply while actually reducing air pollution. The 1.4-megawatt turbine, model GPB15X, was manufactured by Kawasaki Gas Turbines - Americas, a division of Kawaskai Motors Corporation, USA, which is owned by Kawasaki Heavy Industries in Kobe, Japan.

This turbine incorporates a combustor supplied by Catalytica Energy Systems Inc. of Gilbert, AZ, and Mountain View, CA. Catalytica's Xonon Cool Combustion module contains a paladium-oxide catalyst that burns fuel flamelessly at temperatures too low to promote the formation of oxides of nitrogen (NOx), a major air-pollution concern in California. Xonon is "no NOx" spelled backwards.

The Kawasaki/Catalytica package paves the way for expansion of a 1,500-acre wellfield near San Luis Obispo, CA, owned by Plains Exploration and Production Company of Houston, TX (listed on the New York Stock Exchange as PXP). The firm is a major oil and gas producer with more than 224 million barrels of proven oil reserves.

The wellfield now has 135 oil wells producing 1,700 barrels (71,400 gallons) a day. Its output travels by truck to a ConocoPhillips pipeline pumping station near Santa Maria, CA, just south of the San Luis Obispo/Santa Barbara county line. PXP wants to drill 95 more wells at the field in an effort to increase production to as much as 4,000 barrels (168,000 gallons) a day, says Paul DeLorenzo, operations supervisor.

PXP opted for a cogeneration unit because the San Luis Obispo wellfield uses superheated steam to help tease the oil out of the ground. "Our crude oil is very viscous," DeLorenzo explains. "Without heating, it won't move through the formation, so we put in steam at 500° Fahrenheit to loosen it up." The wellfield now has 50 steam injectors; the expansion plan includes 30 more.

Producing the steam are five 50 million - British thermal unit steam generators, huge boilers fueled by natural gas. Due to maintenance and backup requirements, they don't all run at once. With two in operation, they vaporize 252,000 gallons of water a day into 6,000 barrels of steam.

"The Kawasaki allows us not to start another steam generator," notes DeLorenzo. It augments the steam supply because the waste heat in its exhaust (17.58 pounds per second of air heated to 995°F) flows directly into a 20 million - British thermal unit heat-recovery steam generator (HRSG - pronounced "hersig"). The HRSG produces an additional 900 barrels of steam daily from 37,800 gallons of water.

Before the Kawaskai went on-line, PXP bought all of its electricity - about 1.8 megawatt-hours a day - from Pacific Gas and Electric Company, a unit of San Francisco, CA—based PG&E Corporation, via 12-kilovolt overhead transmission lines. "We're a fully electric field here, from our oil-pumping units to the pumps that inject steam into the wells to our water-disposal pumps," DeLorenzo says. "PG&E could supply more electricity, but if we were to expand our field, we would have to pay about $5 million for a substation, plus the cost of the additional electricity."

Moreover, the PG&E supply is interruptible. "We wanted a non-interruptible source," DeLorenzo says.

For the moment, the onsite gas turbine has replaced almost 70% of PG&E's supply at a cost of $0.04 to $0.05 per kilowatt-hour, compared to PG&E's rate of $0.09 per kilowatt-hour. As the wellfield expands, PXP will begin to take more power from PG&E again until, at some point, the economics of the operation may dictate installation of an additional onsite generating system.

PXP gets natural gas from two sources: its own wells and Southern California Gas Company (SoCal), a Los Angeles, CA - based subsidiary of Sempra Energy in San Diego. The onsite wells produce about 24,000 mcf (thousand cubic feet) of natural gas a month, which PXP cleans to pipeline specifications in a gas plant at a cost of $1 to $2 per million cubic feet. PXP buys about 63,000 mcf of gas monthly from SoCal at spot rates that fluctuate daily, averaging about $5 per thousand cubic feet. By contrast, the steam from the cogen system's HRSG is practically a free good.

Key to the Kawasaki unit's ability to keep pollutant emissions well below allowable limits is the novel catalyst technology of its Xonon combustor. "Xonon is the world's first and only commercially available catalytic combustion system for a gas turbine," says Megan Meloni, Catalytica Energy Systems' investor-relations and marketing-communications director.

Unlike the catalytic converter in a car, which reduces pollution by processing unburned byproducts of combustion after they have formed in the engine, the Xonon module prevents pollution by processing a straight air-fuel mixture as it burns in the engine. Meloni explains that chemical combustion in the Xonon module occurs at 1,260°C to 1,480°C (2,300°F to 2,696°F), temperatures at which nitrogen and oxygen in the fuel-air mixture being burned don't react to form NOx_.

"NOx begins to form at 1,500° Celsius [2,732°F]," she notes, "and the flame temperature in a typical gas turbine would be 1,600° Celsius to 1,800°C [2,912°F to 3,272°F]. A flame-based gas turbine produces 15 to 25 parts per million or more of NOx. Air-quality regulations typically restrict a new gas turbine to NOx emissions of 3 to 5 parts per million or less, so a new flame-based turbine would need an external selective catalytic reduction [SCR] emissions control system."

The combustion process in the Kawasaki unit begins in a pre-burner that increases the air temperature to a point above the catalyst's light-off temperature. In the pre-burner, a modest amount of NOx does form. "With further development, theoretically we could have a pre-burner with a catalyst," Meloni says.

From the pre-burner, the heated air moves into a mixing zone, into which natural gas is injected to create the fuel-air mixture that passes into the Xonon module.

Kawasaki's Xonon module, a cylindrical container about 16 inches in diameter and 1.5 feet long, weighs 50 pounds. It has a nickel-alloy exterior. Inside are special metallic foils corrugated and rolled into a cylindrical shape to increase their surface area and create channels about 1 by 2 millimeters through which the fuel-air mixture flows. This substrate is coated with a ceramic support that contains the catalyst, consisting primarily of paladium oxide. In some portions of the module, platinum is added. Meloni calls this proprietary combination "our secret sauce."

Inside the channels, a portion of the fuel oxidizes on the catalyst surface, increasing the temperature of the gas to about 950°C (1,742°F) as it exits the catalyst. As the process extracts energy from the mixture, producing carbon dioxide and water, the nitrogen passes unchanged through the channels. The rest of the temperature rise and heat release occurs in a burnout zone downstream from the Xonon module. Then the hot gases expand to turn the blades of a jet engine connected to a generator, which in turn spins and generates electricity. "There is no loss of turbine efficiency or power output through the use of Xonon," Meloni emphasizes.

The Xonon module has a guaranteed life of 8,000 hours, roughly equivalent to a full year of baseload operation. "It's like the razor blade in a razor," Meloni says. "You swap it out every year during scheduled maintenance." This involves opening the silo-shaped combustor area above the engine, unbolting the Xonon module to remove it, and installing a new module. Replacement takes a day or so.

"We have not publicly disclosed our pricing information," Meloni says. "We sell Xonon modules for systems ranging in size from 1 to 15 megawatts, and the average price in that range is on the order of $150,000."

By comparison, the cost to install a downstream SCR for a flame-based 1.4-megawatt gas turbine would be $175,000 to $250,000, and operating costs would run about $25,000 a year, says Lance S. Green, Kawasaki Gas Turbines - Americas' regional sales manager in Thousand Oaks, CA.

In a typical SCR, a toxic reagent, such as ammonia, reacts with the catalyst to reduce the NOx. The catalyst has a three-year life, but the ammonia must be replenished constantly. "Somebody has to physically monitor the ammonia level," Green notes. "You have to store ammonia on-site or truck it in when you need it. You're going to be venting some ammonia into the air, and there's always the risk of a spill." An SCR also consumes about 250 square feet of additional land, making it impractical for use where space constraints exist.

Another theoretical alternative, a diesel generator designed for backup rather than baseload use, might be cost-effective but couldn't run all the time without exceeding emissions limits.

Also helping keep the Kawasaki turbine package's emissions low are its sophisticated fuel and generator controls and remote-control capability.

The fuel control system consists of sensors, flow meters, and computer controls that optimize the use of natural gas in the turbine, helping minimize emissions while maximizing the system's power-generating capability.

The generator control system provides a comfortable interface with the power grid, using options to allow load following as the wellfield's electrical demand varies with the time of day and production requirements. "This control system allows you to track that load and maintain the proper generator output," Green says. "Systems lacking that capability are constantly seeking back and forth, turning on and off. Having it smooths out the operation and maintains a steady state."

The remote-control feature, called the human monitoring interface (HMI), enables an operator using a computer with special software to view and adjust the system's status from any distant location. Glenn Asher, director of operations for Kawasaki Gas Turbines - Americas, says about 150 devices on the turbine, gas compressor, and HRSG generate some 900 separate signals. "They include thermocouples, valves, vibration transducers, and devices that measure the temperature of bearings. Many send out multiple signals. It's like flying an airplane without wings," he says.

The HMI also provides data logging, allowing the operator to ascertain how much power he or she was using and what the system's thermal output was during a given period of time.

Before the Kawasaki unit was approved, two previous attempts to install an onsite generating system at the wellfield foundered due to cost and pollution constraints, reports Dean Carlson, air pollution control engineer for the County of San Luis Obispo Air Pollution Control District.

The wellfield's previous owner - Cal Resources LLC, a subsidiary of Shell Oil Company - applied in 1995 for a permit to operate a generating system that would have emitted 42 parts per million of NOx. It was rejected in 1996.

PXP acquired the wellfield in December 1997, and applied in 2001 for a permit for a 3.1-megawatt Solar Centaur turbine from Solar Turbines Inc. of San Diego, a subsidiary of Caterpillar Inc. in Peoria, IL. It would have had an SCR and NOx emissions of 5 parts per million. PXP later cancelled that application and applied in December 2002 for the Kawasaki permit, which was granted in June 2003.

Three factors pointed to the choice of the Kawasaki system, explains PXP's DeLorenzo:

• Availability: "We didn't have to wait for Kawasaki to build a gas turbine for us," he says.

• Emissions technology: "We're in a highly sensitive area," he notes. "We didn't want to have ammonia tanks in our wellfield. Also, in California we have to use the best available control technology. The Kawasaki turbine with the Xonon module is it."

• The additional cost of installing and operating an SCR

In the fall of 2002, PXP was considering an agreement with a vendor who would have purchased and installed an entire turnkey system, including the Kawasaki unit, but then PXP determined that the vendor lacked the expertise to complete the project. At that point, says DeLorenzo, PXP took over the project, bought its components directly, and did most of the installation work. The total system cost was $3 million, including $1.25 million for the Kawasaki turbine package, which includes a Baylor generator from National-Oilwell Inc. of Houston, TX.

Other key components include the HRSG, made by Struthers Industries Inc. of Gulfport, MS, and acquired from Bill Young, a consultant in Winfield, KS; and the gas compressor, supplied by Industrial Flame Spraying & Grinding Inc. of Bakersfield, CA.

Engineering assistance was provided by TJ Cross Engineers Inc., a Bakersfield, CA, civil and mechanical engineering firm; and Thoma Electric Company Inc. of San Luis Obispo.

PXP's own personnel selected the site, excavated and compacted the soil, installed rebar and poured the concrete foundations to support the turbine and HRSG, hired a crane to offload the Kawasaki and other large components from the trucks that brought them to the site, and fabricated much of the metal that ties everything together.

Once on their pads, the turbine and HRSG were bolted to anchors embedded in the cement. The foundations are designed for Seismic Zone 4 (the most rigorous classification for protection from earthquakes under the 1994 Uniform Building Code and subsequent codes based on it). "Last December 22," DeLorenzo says, "we had an earthquake that registered 6.4 on the Richter scale. Nothing happened here, even though we're just 30 miles from the epicenter. Houses were damaged farther away than that, but they weren't built to Seismic 4."

The installation also includes

• a gas line from the compressor to the Kawasaki gas turbine;

• a feedwater line that feeds soft water to the HRSG;

• an "exhaust boot" - a 12-foot length of double-walled pipe that carries the turbine's waste heat to the HRSG;

• a steam-out line that goes to the steam header, from which distribution lines run to the steam injectors;

• electrical connections from the generator to the switchgear; and

• the interconnection with PG&E's utility-power grid.

The Kawasaki package is 22.08 feet long, 6.5 feet wide, and 13.66 feet high. It weighs 27.5 tons. The entire installation - including the turbine, HRSG, gas compressor, and control room - is 65 feet long and 40 feet wide. "That's 2,600 square feet - about the size of a nice house," Asher says.

"An equivalent internal-combustion engine would weigh three times as much and be lucky to get up to 41% overall efficiency. Including cogeneration, this package achieves an overall efficiency of 77.1% at ISO standards" (14.985°C or 59°F ambient temperature and 60% humidity at sea level).

The Kawasaki package started up in October 2003 and passed its first emissions-source test in the first five days of December. Carlson's agency issued a permit with an upper NOx limit of 3 parts per million. "We would have said 5 parts per million," he admits, "but they proposed 3 parts per million."

The initial test results - 1.2 - parts per million NOx actual measure and 1.4 - parts per million reference at 15% oxygen content - left Carlson scratching his head. "It's unusual to have that low of an emission," he says. "It's probably the lowest of any turbine in the United States or the world right now. We had to refine our source test methods to get an accurate reading down that low."

PXP is required to hire a contractor with a testing van to check the system's emissions once a year, and to use an "NOx box" (portable monitor) more frequently, but the portable devices won't give accurate readings at such low NOx levels.

"We can look at other parameters," Carlson says. "The system's upper limit for carbon monoxide is 10 parts per million, so if it starts creeping up, we can infer that it might be time to change the catalyst."

The wellfield is located about 15 miles south-southeast of San Luis Obispo, and 3 miles up a canyon from the town of Pismo Beach. Within a mile are upscale hilltop homes that overlook the Pacific Ocean.

The Kawasaki unit is a good neighbor, Green says. "It's not generating pollutants or noise that would bother the people in these homes," he emphasizes.

To ensure that noise wouldn't be a problem, PXP put silencers on the unit's air intake and exhaust, put shrouds around it, and placed it in an enclosure. "The noise rating is 85 decibel-amps at 3 feet," Green says. "It's not as noisy as a lawnmower. A truck driving by on the street makes more noise."

PXP even repainted the equipment to make it visually unobtrusive. It was gray when it arrived on the site; now it's green. "As you drive up Price Canyon from those exclusive homes, you don't really see this thing. It blends in with the scenery," Green says.

PXP even bought a new diesel engine for a farm at the north end of the county but not as a random act of community service. It was an emissions offset required by the Air Pollution Control District. "The new turbine was at an oil field with other pollutant sources, which together have the potential to emit more than 25 tons per year of NOx, so PXP had to supply emissions offsets for any increase in NOx or VOCs [volatile organic compounds]," Carlson explains.

"They could have offset the emissions elsewhere in their wellfield or bought credits, but the problem with buying is supply. Few credits are available for purchase, and people want a lot of money for them, so we're looking for creative ways to get those offsets."

Carlson's agency is participating in a statewide program to replace old, high-emissions agricultural engines. Star Farms near San Miguel, CA, missed a submission deadline, so Carlson arranged instead to have PXP replace a diesel irrigation-pump engine there with a cleaner, lower-emitting unit. "PXP paid $49,800 to replace the old agricultural irrigation-pump engine," he says. "They received 2.82 tons of NOx emissions-reduction credits and used 1.37 tons for the Kawasaki project. The balance is in the bank. They plan to use it when they expand the wellfield."