CASE STUDY - THE CHALLENGE: IMPROVING THE PERFORMANCE OF OIL WELL PUMPING UNITS
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Summary
OXY USA, a subsidiary of Occidental Petroleum Corporation, provided five oil wells at their Bemis Oil Field in Ellis County, Kansas for an experimental program aimed at increasing efficiency and performance of beam-type oil pumping units. By making electrical and mechanical modifications to these wells, OXY USA was able to reduce the wells' operating costs and identify specific modifications that can improve the efficiency levels of its other wells. The mechanical and electrical modifications reduced annual energy consumption by more than 12 percent, or 54,312 kWh, resulting in $2,227 of annual energy savings. Another $3,135 in annual savings was realized through reduced electricity demand charges, resulting in a total of $5,362 in annual savings from the project. The simple paybacks for each of the five modified wells ranged from 2.6 to 16.1 months, with a total project simple payback of 6.5 months. The total savings in both energy and demand charges amounted to about 77 cents per barrel of oil pumped.
Company Background
OXY USA operates oil and gas exploration and production facilities in Texas, Louisiana, Kansas, Oklahoma, California, New Mexico, Mississippi, Alaska, and the Gulf of Mexico. Its parent company, Occidental Petroleum Corporation, is involved in global oil exploration; crude oil and natural gas development, production, and marketing; natural gas transmission and marketing; and production and sales of basic chemicals, petrochemicals, polymers, and plastics. Incorporated in 1920, Occidental Petroleum Corporation has approximately 17,280 employees and annual sales in excess of $10 billion.
Project Overview
With the price of oil declining and their oil wells maturing, oil drilling companies in Kansas were faced with energy costs for pumping oil which at times exceeded 50 percent of the price of the crude oil extracted. As a result, many independent producers were forced to shut down marginally operating wells. These shut downs led to significant reductions in revenue for the state's electric utilities. As a result, the Kansas Corporation Commission (KCC), the state's utility regulatory body, funded a study seeking to identify specific technical modifications which could improve pumping unit efficiency and reduce costs. Some additional funding was provided by the United States Department of Energy.
The Center for Energy Studies at Wichita State University (WSU) and DynCorp Corporation analyzed Kansas' entire oil industry and identified various technical modifications which could improve oil pumping efficiency. OXY USA then instituted an experimental program on five of its beam-type oil well pumping units to implement and measure the effects of these modifications.
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Project Team
This Motor Challenge Showcase Demonstration project required the cooperation and teamwork of four organizations: OXY USA hosted the project; DynCorp Corporation was responsible for data analysis; Midwest Energy, Inc. (the local electric utility) contributed electrical metering, personnel, and additional funding; and WSU provided technical consultation during the project and co-authored a report with DynCorp. This report, An Investigation of Methods for Reducing the Cost of Pumping Oil in Kansas, constitutes a broad study of overall oil production in Kansas and includes recommendations on how to reduce the cost of pumping oil.
The Systems Approach
Each of the beam-type pumping units analyzed includes an electric motor, belt drive, gear reducer, crank arm with counter weight, walking beam, horse head, sucker rod, and underground pump. The pumps, which operate at a fixed speed 24 hours per day, 365 days per year, are usually only shut down for maintenance or because of operational problems. The only controls on these pumping systems are shut-off valves in the discharge line from the well head.
Analysis of the system showed that the total average demand (average apparent power) and annual energy consumption of the five wells were 765,624 kVA and 445,884 kWh respectively, for a total annual operating cost of $28,165. In order to identify modifications that could improve the operational efficiencies of oil pumping units, the Showcase Demonstration team ran a series of tests on the five oil wells. OXY USA performed dynamometer tests on all five wells, measured pump speed, fluid level, stroke length at both the surface and pump, and pump size. Using totalizing flow meters, OXY USA kept daily logs of the total liquid flow rate from each of the wells. In addition, Midwest Energy took short-term electrical power measurements using power analyzers and loggers, and long-term electrical power measurements using utility power meters. Finally, OXY USA supplied oil fraction and pumping speed statistics. Several months worth of data were taken to establish the motor system's capability with respect to the well requirements.
Taking a systems approach, the Showcase Demonstration team analyzed and modified both the electrical and mechanical components of the well pumps. Electrical modifications included: checking the service conductor sizing and losses, replacing one well's motor with a smaller-sized unit to better match the motor system's capability with the well requirements, and adding capacitors to correct the power factor. Mechanical modifications included: inspecting and lubricating gearboxes and bearings and replacing worn parts, dynamic balancing of the unit, inspecting and tightening belts and replacing worn belts, inspecting and adjusting the seal of the packing head, and adjusting stroke length.
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Project Implementation
After analyzing the five wells, the Showcase Demonstration team made the following electrical and mechanical modifications:
Well B4: Lubricated gearbox, inspected bearings, balanced beam pump, installed and tensioned new matched set of drive belts, adjusted pump stroke, greased and serviced beam pumping unit, and installed secondary capacitors;
Well B15: Replaced the oversized 30-HP 480 V. 3 phase NEMA D motor with a similar 10-HP unit, reduced pumping speed from 10.6 strokes per minute (spm) to 8.75 spm, greased and serviced beam pumping unit, and installed secondary capacitors;
Well B19: Repaired high resistance connection in one phase of the motor control center and installed secondary capacitors;
Well B20: Installed secondary capacitors; and
Well B21: Balanced beam pump, installed and tensioned new matched set of drive belts, adjusted pump stroke, greased and serviced beam pumping unit, and inspected bearings.
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Results
Because the operating point of each well changed during the evaluation period, the results obtained were normalized to provide a comparison between cases where the well output was the same. In addition, one common observation made throughout this project was that all five of these mature wells exhibited a steady deterioration in well performance over time. Since well B19 and B20 did not undergo any physical modifications at the well head, they were suitable for quantifying the magnitude of this long-term decrease in performance. Thus, by factoring out the effect of well deterioration over time, the Showcase Demonstration team was better able to gauge the impact of the mechanical and electrical modifications. Based on several months worth of data taken after the optimization measures were implemented, the mechanical modifications yielded varying degrees of improvement from well to well. The greatest decrease in energy consumption occurred in well B15, where the installation of a new, smaller motor and other mechanical modifications resulted in a 21 percent decrease in electricity usage. In all cases, the addition of secondary capacitors significantly improved the power factor, increasing it from an average of 0.58 to 0.76. This markedly decreased demand and represented more than half of the cost savings realized.
Using the adjusted measurements, the five wells show decreases in energy demand ranging from 24 to 40 percent. In addition, the wells that underwent modifications beyond the installation of secondary capacitors realized a drop in energy consumption ranging from 13 to 21 percent. The project's total annual cost savings of $5,362 were derived from reduced demand charges, which fell 32 percent, and reduced energy costs, which fell 12 percent. Taking into consideration that the oil industry considers simple paybacks of 12 to 18 months for small companies and 2 to 3 years for large companies economically viable, this Showcase Demonstration project's simple payback of 6.5 months demonstrates that the well modifications are economically worthwhile. In addition, the wells studied here were in generally good condition. Since OXY USA has a program to perform routine maintenance, it is estimated the oil wells studied are more efficient than the average well. A significant part of this difference is attributable to infrequent maintenance and oversized motors. Thus, implementation of a program of this nature to the general oil well population can be expected to yield much greater savings than those reported here.
For mature wells, where about one percent of the fluid pumped is oil and the rest is brackish water, this represented a savings of 8 kWh (about $0.32) per barrel of oil pumped. The total savings in both energy and demand charges amounted to about $0.77 per barrel of oil pumped. In addition to the electrical cost savings of this project, this Showcase Demonstration project also provided OXY USA with several other benefits. For example, the well analyses helped OXY USA prevent potential equipment failure by detecting problems before they were serious enough to cause downtime. For example, the high resistance connection in Well B19 was discovered during these tests. Furthermore, the varying energy measurements of specific wells provided OXY USA with data it can now use to examine the potential causes of low efficiency found in some wells. This information can be helpful in determining if a change in well operation is mandated or if a well has merely reached the end of its useful life.
Lessons Learned
The implementation of energy efficiency measures in this Showcase Demonstration project provided several practical lessons that can be applied to future analyses at OXY's Bemis Oil Field and elsewhere. First, using the smallest motor that enables the pump to operate can significantly improve oil well efficiency. Second, the total cost savings are a function of both energy saved and reduced demand. The value associated with each is a function of the rate structure of the utility. In this study, a large part of the savings was due to a reduction in demand charges. For situations where the power factor penalty is large, additional attempts to correct the power factor even closer to 1.0 may be economical. Finally, measuring liquid level in the well, along with power and flow, ensures that the correct elevation level is used when calculating the minimum energy required for pumping. Further analysis using this parameter can help determine if specific pumps are over- or under-pumped.