A Solar Enhanced, Zero- Waste Energy Management Solution How it Lowers Pump Jack Operating Costs An Industry White Paper
Overview This white paper describes the energy inefficiencies that exist in the operation of most pump jacks and how a solar enhanced, zero- waste energy management solution eliminates these inefficiencies and reduces maintenance requirements, allowing the pump jack operator to reduce their overall operating cost. The Problems > Inefficient Energy Use Most pump jacks are very inefficient at energy use and energy costs money. > Peak Power The current industry standard to start electric motors is the use of combination starters (know as across- the- line starters) that start motors with full voltage and run the pumps at full rated speeds. Across- the- line motor starts require up to eight (8) times the rated current draw, creating an inflated peak demand (peak demand results in penalties, but more critically, it is also the benchmark used to set utility rates). Along with across- the- line starters, timers and pump off controllers (POC) are used to trigger the run and stop cycles on wells with reduced production allowing the wells to replenish. Each of these starts requires this inflated in- rush or current draw. > Low Power Factor Imbalance between the rod and counterweights on pump jacks create motor regenerative energy, or regen. This regenerated energy is considered dirty power by the utilities because of the imbalances in harmonics. This dirty power, combined with motor inefficiencies, results in a low power factor requiring the utility to make power factor corrections to maintain their desired levels and the integrity of the power grid. This results in power factor penalties accessed against the pump jack operator, increasing their energy costs. > Wasted Power Some pump jacks make use of a standard variable speed drive (VSD) to reduce peak demand by replacing the across- the- line starters, but these standard VSDs do nothing to utilize the regenerative energy produced by the movement of the pump jack. Instead, the regen is either expelled as heat through brake resistors or pushed back to the grid with the use of an AC regen unit. In cases where the AC regen units are used, the energy can only be used for other asynchronous loads on the same meter and where the pump jack is the only load on the meter the operator is given no credit from the utility for this excess energy. Page 2 of 8
Currently unused energy is pushed back to the utility, with no credit to the operator, or it is expelled as heat through brake resistors. In situations where brake resistors or AC regen units are not used on standard VSD controllers to expel excess energy, operators must pay close attention to the balance of the pump jack to prevent over current faults or nuisance tripping that results in downtime. The following three graphs illustrate the amount of wasted power (shown below the 0% line) on three sample wells sites (LT Daniels, Joe Daniels, and Akin Daniels) before the Solar Jack system was installed. On page 6, in the Operational Data section, pre- and post- Solar Jack system data is presented on these same three well sites. Page 3 of 8
> High Maintenance Costs > Violent Motor Starts Across- the- line starters cause violent motor start- ups, decreasing the life of the motor and belts and necessitating repairs. The violent start- ups can also cause downhole damage resulting from vibrations passed through the rod. The bottom line of the operator is not only hurt by the cost of repairs, but also by the lack of production during the downtime. > Speed Adjustments For the majority of pump jacks, speed adjustments are made by taking the pump jack off- line and performing pulley and sheave changes. In addition to the labor cost incurred, this process results in wasted production time adding to the expense. Speed adjustments are made to optimize the strokes per minutes and reduce the affects of fluid pound. Page 4 of 8
The Solution: Solar Jack s Energy Management The Solar Jack Energy Management captures and combines the otherwise wasted regen energy created by the pump jack combined with solar energy, lowering the energy cost for pump jack operators. The system also allows operators to easily optimize the strokes per minute of pump jacks, both saving energy and lowering maintenance costs. The Solar Jack Energy Management captures and combines the otherwise wasted regen energy created by the pump jack and combines it with solar energy, lowering the energy cost for pump jack operators. (Photo Solar Jack installation in OK) > A New Twist on Solar Power for the Oilfield Currently, it is not practical or cost effective to use a solar energy collection system to produce all of the power needed to operate a pump jack (see Comparison to Traditional Solar Installations on pg 8). With that in mind, we have a new twist on solar for the oilfield. Solar Jack takes the solar energy captured by our system and combines it with the regenerative energy produced by the pump jack to decrease the amount of power needed from the utility (for on- grid systems) or generators (for off- grid systems), saving pump jack operators a considerable amount of money. > Zero- Waste A pump jack s natural motion causes motor regeneration; energy is needed to lift the pump jack beam on the up- stroke and rotational kinetic energy is created as the beam falls on the down- stroke. Solar Jack takes this regen energy, combines it with solar power captured by our system, and applies it back to the operation of the pump jack. This is done through either Net Metering or by utilizing the Solar Jack Energy Management s on- site energy storage option (see below). Both options substantially lower the pump jack s energy cost. > Utility Net Metering Our grid- connected, net- metering model meets all requirements for smart grid applications and allows customers to qualify for a Net Metering /power purchase agreement, aka spinning the meter backwards, Page 5 of 8
in most states. This system can eliminate power factor penalties and lower peak demand (lowering peak demand will lowers the utility rate schedule). > On- Site Energy Storage Our on- site energy storage model captures the regen energy and solar energy, stores it on- site, and uses it for the operation of the pump jack. The unused energy generated from the down- stroke of a stroke cycle combined with the solar energy captured by our system is used to help power the up- stroke of the next cycle, or can be used to power other nearby devices such as disposal wells, submersible pumps, or other pump jacks. In some cases the utility may not offer renewable energy credits or retail power purchase programs. This process allows pump jack operators to reap the cost savings of the regenerative and solar power captured by the Solar Jack system, without the need for an interconnection or net metering agreement with their utility. In off grid sites where utility power is unavailable and a diesel, NG, LP or solar/battery generator is used; the system will allow the regen to be used to offset the amount of fuel (or solar/battery bank size) needed to run the generator. > Less Maintenance Our system allows pump jack operators to dial in (literally by turning a dial) the strokes per minute of the pump jack. By optimizing the strokes per minute the operator is able generate the same levels of production (barrels per day) with fewer strokes of the pump jack s walking beam. The decrease in stokes means less energy is needed per operational hour of the pump jack. Also, as with any mechanical device, a decrease in the overall number of movements of the mechanism means less wear on its components. This leads to an increase in the life span of the machine and a decrease in the amount of maintenance needed, thus lowering the operating cost. By optimizing the strokes per minute the operator is able generate the same levels of production with fewer strokes of the pump jack s walking beam. Another benefit of optimizing the strokes per minute is the reduction or elimination of periods of fluid pounding, which can lead to down- hole problems such as parted rods and casing damage. In addition to a reduction in strokes per minute, the variable speed soft start technology used in the Solar Jack system eliminates the violent starts and stops of the pump jack motor. Using this soft start technology increases the life of the pump jack motor and belt. The maintenance benefits realized by using the Solar Jack system means less dollars spent on maintenance and avoiding the loss of well production from maintenance downtime. > Tax Credits The Solar Jack system qualifies for the 30% Federal Renewable Energy Tax Credit (expiring on 12/31/16), as well as all applicable state tax incentives. Solar Jack systems also qualify for all applicable utility energy rebate programs. Page 6 of 8
Operational Data > Pre- and Post- Data Comparisons Below are comparisons of three well sites in Oklahoma showing pre- and post- Solar Jack system utility and maintenance costs. These sites are owned and operated by Solar Jack customer Arrow Energy. Shown is twelve (12) months of data from 2012 prior to the installation of the systems, and twelve (12) months of data from 2013 after the systems were installed. These are Net Metered systems. Well: LT Daniels Pre Post Pre vs Post Power Bill $6,000 $1,380 ($4,620) Belts $0 $283 $283 Pulling Unit $6,614 $0 ($6,614) Pump Unit Repair $0 $180 $180 Fittings $0 $50 $50 DH Pump Repair $2,053 $0 ($2,053) Totals $14,667 $1,893 ($12,774) Well: Joe Daniels Pre Post Pre vs Post Power Bill $6,900 $1,464 ($5,436) Belts $176 $0 ($176) Pulling Unit $7,960 $0 ($7,960) Pump Unit Repair $0 $155 $155 Fittings $0 $255 $255 DH Pump Repair $1,420 $0 ($1,420) Totals $16,456 $1,874 ($14,582) Well: Akin Daniels Pre Post Pre vs Post Power Bill $6,000 $1,380 ($4,620) Belts $441 $114 ($327) Pulling Unit $1,250 $0 ($1,250) Pump Unit Repair $6,335 $155 ($6,180) Fittings $97 $83 ($14) DH Pump Repair $1,949 $166 ($1,783) Totals $16,072 $1,898 ($14,174) Page 7 of 8
> Comparison to Traditional Solar Installations The data below assumes that a 30 HP pump jack producing 5 BBL/day has a monthly power bill of $500 at a rate of $0.10 per kilowatt- hour and that a traditional solar installation costs $4.00 per watt*. ROI Comparison to Achieve a 77% Energy Cost Savings on a 30 HP Pump Jack Traditional Solar Energy ROI Solar Jack Energy Management ROI 17 YEARS (204 MONTHS) 21 MONTHS In order to achieve the same results as shown in the three well site examples in the Pre- and Post- Data Comparisons section above, roughly a 77% decrease in the power bill, it would take an installation of at least 15 eight- panel traditional solar energy systems at a cost of between $90,000 and $120,000*. The return- on- investment time, after taking the 30% Federal Renewable Energy Tax Credit, would be approximately 17 years for the traditional solar energy system installation; whereas the return- on- investment time for an equivalently sized Solar Jack Energy Management system (taking the 30% tax credit and considering maintenance savings of $7,500/year) would be approximately 21 months. *Data provided by Outward Resource, Inc. Conclusion The harnessing of energy inefficiencies in the operation of pump jacks in the oil & gas industry will yield substantial cost savings to pump jack operators. With each stroke of a pump jack, operators are losing energy that could otherwise be used to offset energy costs. Solar Jack offers the industry a cost effective answer in the form of a solar enhanced, zero- waste energy solution that allows the regenerative energy and solar energy captured by the Solar Jack system to accrue to the benefit of the pump jack operator. By combining the benefits of variable speed soft start technology, regenerative energy, solar power, custom energy management, and custom algorithms the Solar Jack system reduces the overall lifting cost for the pump jack operator. We can also include custom dynamic energy storage in our system to further reduce energy requirements. Solar Jack s patent pending solar enhanced variable speed system allows pump jack operators to reduce power usage and maintenance costs using a clean, renewable solution. Solar Jack is a solar enhanced, variable speed energy management system that gives oil producers the ability to capture the regenerated energy from their pump jacks, combined with solar energy, to offer a solution for reducing energy consumption and energy cost, as well as reducing maintenance downtime and cost. Solar Jack, LLC is a joint venture formed by North Creek Energy, LLC and P&J Energy Services, LLC. 2014 Solar Jack, LLC Solar Jack, LLC 929 New Leicester Hwy, Suite 7 Asheville, NC 28806 888.562.1005 www.solar- jack.com Page 8 of 8