Digital Gas Licenses High-Temperature Fuel Cell Method for Oil Shale Production and Electricity Co-Generation
Digital Gas has signed an agreement to partner with a private US-based company that owns the exclusive rights to a high temperature fuel cell (HTFC) method to be applied to in-situ geothermic production of oil shale and other unconventional sources of synthetic crude.
The method is expected to dramatically reduce the cost for oil and gas recovery, as well as reduce the environmental footprint.
The broadly-patented HTFC approach is designed to make it possible to economically produce oil and gas from unconventional resources, such as oil shale, tar sands, heavy oil deposits, and coal bed methane, while producing electricity as a byproduct.
Oil shale is a fine-grained sedimentary rock containing kerogen—a solid organic precursor to oil and gas—from which oil and gas can be obtained through the application of heat. Oil sands, with their bitumen content, are similar, requiring heat to begin the processing of the oil precursor.
There are two basic approaches to processing oil shale: mining the rock and heating it in a surface retort, and heating the rock in the ground (in-situ), to then pump up the resulting oil.
In-situ processing is a developing technology, offering lower financial and environmental costs than the traditional mining and retorting methods. That said, there are still many uncertainties in both of those areas: the financial and the environmental.
|Shell’s in-situ shale processing. Click to enlarge.|
Shell has been working on its In-Situ Conversion Process (ICP) for more than two decades—ever since the collapse of the first run at oil shale in the 1980s. (Earlier post.)
In its in-situ process, Shell drills holes into the resource, inserts electric resistance heaters, and slowly heats the subsurface to around 343º C (650º F) over a 3- to 4-year period. During this time, very dense oil and gas is expelled from the kerogen and undergoes a series of changes, including the shearing of lighter components from the dense carbon compounds, the concentration of available hydrogen into these lighter compounds, and the changing of phase of those lighter more hydrogen rich compounds from liquid to gas.
These gaseous lighter fractions are now far more mobile and can move in the subsurface through existing or induced fractures to conventional producing wells from which they are brought to the surface.
A wide array of other types of heaters has been developed to apply thermal energy to the ground. Many have been electrical resistance heaters, but there have also been many direct-fired burners, including “flameless combustors.” Other approaches have involved hot air injected into hydrocarbon formations to support in-situ combustion. Some of these geothermic techniques have achieved limited economic success in specialized fields, such as conduction heating for detoxifying contaminated soils.
In the new Digital Gas approach, however, a high-temperature fuel cell stack is placed within the formation to heat the ground rather than an electric heater, burner or steam.
Solid oxide fuel cells are assembled inside a steel casing to create a tubular heating element. (Solid oxide fuel cells operate in a range of about 700º–1,000º C.) The assembled cylinder is lowered and secured into a vertical borehole. The fuel cell stack is then fed with pressurized fuel and air from the surface, to produce electricity with an efficiency of up to 50%. The balance of energy in the fuel stream is converted to heat, which then passes by conduction into the ground.
As with other in-situ production processes, as the ground is heated, hydrocarbon liquids and gases are released from the resource into neighboring collection wells.
A portion of the gases are processed and returned to the fuel cell stack, with the remainder available for sale into the energy markets. Thus, after an initial warm-up period (during which the cells are fueled with an external source of natural gas), the process essentially becomes self-fueling from gases liberated by its own waste heat.
Raising the temperature of the formation increases fluid pressures in the heated zone by 100 to 200 pounds per square inch over and above the native hydrostatic pressure. This pressure is often sufficient to fracture otherwise impermeable formations like oil shale. Alternatively, the formation can be pre-fractured to enhance the flow of hydrocarbons and accelerate communication between the heating wells and the collection wells.
This self-fueling system, in steady-state operation, produces oil, electricity and surplus natural gases. The result is a geothermic heater that produces, according to Digital Gas, a net energy ratio (NER) of approximately 7. By contrast, the Shell method is estimated to have an NER of 3.7.
According to company figures, in an oil shale application, a 500-foot fuel cell stack would produce 37 barrels of oil per day, plus 3,600 kilowatt hours of electricity. Instead of consuming hundreds of kilowatt hours of electricity per barrel of oil produced, geothermic fuel cells would yield approximately 100 kWh of electrical energy for every barrel of oil recovered, significantly lowering the operating cost of the system in unconventional oil recovery.
Digital Gas estimates that operating costs can decrease to approximately $10 per barrel when offset by revenues associated with the sale of surplus gases and electricity produced.
On the environmental side, there are a number of benefits:
Minimal air emissions. Since there is no combustion process in our system—fuel cells produce electricity through an electrochemical reaction—there is negligible production of NOx, SO2, particulate or toxic emissions.
The system is essentially self-sufficient in process water. Fuel cells produce steam as an exhaust which is re-circulated through fuel pre-reformers , thus obviating most if not all needs for outside process water.
The system produces minimal surface impact—one of the core benefits of in-situ processing.
The other interesting aspect of the approach is that is could, in essence, begin to upgrade the synthetic crude in the ground by varying pressure, steam and other aspects of application control.
Digital Gas will make an equity investment in the developer of the HTFC method, be responsible for drilling contract and funding matters on its properties, and will have the right to use the HTFC method on properties it acquires independent of the company, subject to a royalty payment. Digital Gas expects initial HTFC units to be operational during 2006.
The developer is currently accumulating mineral interests in oil shale reserves within the Green River Formation of Colorado, Utah and Wyoming. Their proprietary HTFC technology will subsequently be deployed to produce oil, other hydrocarbon products and electricity for sale into North American energy markets.
One of the DOE’s labs has reviewed and endorsed the HTFC approach, and is following through on its interest by working to form a partnership with the developer to produce commercial versions of the HTFC technology.
The HTFC method could also be applied, according to the developer, to oil fields currently considered non-commercial because the residual hydrocarbons are too viscous to extract with conventional technology.
The HTFC technology can also be developed for application to accelerate and enhance recovery of coal bed methane. Digital Gas expects the HTFC system to dramatically accelerate production for coal bed methane companies. Since the HTFC produces electricity without any air emissions, their deployment will create the equivalent of emission free power plants. The electricity produced by the HTFC wells can be used to power pumps used in pumping water out of coal bed methane fields as well as powering compressors required to feed coal bed methane into feeder pipelines.
The fuel cells produce a very pure carbon dioxide exhaust gas stream that can be either sequestered underground or harnessed for industrial or agricultural applications, such as the farming centers to be commercialized by a Digital Gas subsidiary.