Cheap Natural Gas Is Displacing Diesel

From ABQ Journal

By Marc Levy

Advances in hydraulic fracturing have powered the American natural gas boom. And now hydraulic fracturing could be increasingly powered by the very fuel it has been so successful in coaxing up from the depths.

Oil- and gas-field companies from Pennsylvania to New Mexico are experimenting with converting the huge diesel pump engines that propel millions of gallons of water, sand and chemicals thousands of feet below to break apart rock or tight sands and release the natural gas trapped inside.

It’s the latest way for drillers to become consumers of the product that they are making broadly available in large amounts – and extremely cheap.

After the conversion, the engines will run on cheaper natural gas, or a blend of diesel and natural gas. That brings down costs and, theoretically, cuts down the sooty exhaust that comes from burning diesel.

“You’re going to see this spreading quite rapidly across the industry,” said Douglas E. Kuntz, president and CEO of Pennsylvania General Energy Co., based in tiny Warren, Pa.

PGE and contractor Universal Well Services, of Meadville, Pa., are converting a 16-engine pumping unit called a “frack spread” so that the engines will accept a blend of 70 percent natural gas and 30 percent diesel. It should be complete by May and is estimated to cost less than a quarter of what diesel alone costs.

Houston-based Apache Corp., one of the nation’s largest independent oil and gas exploration companies with operations in New Mexico, has worked with Halliburton, Schlumberger and Caterpillar to develop similar technology.

A 12-engine, full frack spread is operating in the field near Elk City, Okla., and another unit is in the process of being completed, Apache said.

Apache has been building compressed natural gas (CNG) fueling stations in southeastern New Mexico to help service its growing fleet of converted trucks, rigs and now, potentially, diesel pump engines in the state’s oil patch. As of last September, the company had CNG stations in Hobbs and Eunice, and it was in the process of building a third in Artesia.

No other companies operating in New Mexico have yet publicly announced conversion of diesel pump engines to natural gas, but many are converting trucks and drilling rigs. Oklahoma-based Williams Cos. Inc., for example, is switching all of its 1,600 vehicles nationwide, including 230 vehicles in the San Juan Basin, to natural gas.

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