Breaking Into The Flare Business

LPP Combustion's quest to build, prove and provide the Bakken with an innovative flare capture technology reveals the opportunities and challenges for any firm attempting to provide flare capture and utilization technology to Bakken gas producers.
By Patrick C. Miller | November 11, 2014

North Dakota isn’t the only place in which LPP Combustion LLC is receiving interest in its gas capture technology, but the Bakken is where company CEO Richard Roby hopes the system will prove its commercial worth.

After wrapping a month-long tour of its Lean, Premixed, Prevaporized liquid fuels system around North Dakota, the company will take its demonstration unit to Colorado and then Texas. Roby says LPP is in discussions with major New England utilities and also presented its technology at a flare management and reduction conference in Dubai of the United Arab Emirates.

“There are a number of places around the world dealing with similar kinds of problems, and our technology is seen as having international implications,” Roby says. “But we’d love to be able to say that it was first proven in North Dakota.”

Toward that end, the Columbia, Maryland, company spent much of October and part of November demonstrating its LPP system around the state, especially in western North Dakota where it caught the attention of oil and gas operators and oil service companies in the Bakken.

Chris Broemmelsiek, LPP’s vice president of sales and marketing, says the North Dakota marketing blitz paid off with two requests for proposals from potential customers who want LPP systems operating at their sites within six months.

With the potential to help address flaring, logistical, environmental, safety and economic concerns in the Bakken, it’s no surprise that LPP’s demonstrations attracted the attention of industry, the news media and politicians, including state legislators, and members of North Dakota’s congressional delegation and the state Public Service Commission. 

“With any new technology, there’s always this hurdle you have to get over—you have to find the first adopter,” says Roby, co-inventor of the patented LPP system. “That’s always the toughest part, getting someone to take the risk of being the first customer.”

Investing In The Demonstration
To LPP, the issue of gas flaring in the Bakken represented a major opportunity to help potential customers overcome their reluctance to try something new.

“All this fuel was going up in smoke because nobody knew how to properly burn it in a combustion engine to generate electricity,” Roby says. “We had this technology, and there was a huge economic driver, as well as an environmental driver.”

Given the declining price of Bakken crude, LPP’s technology also provides a way for operators to cut costs.

“Typically, diesel fuel is being used to power operations in the Bakken. It cost about $5 a gallon delivered,” Roby says. “You put a significant premium on even the market price of diesel fuel. We can reduce the fuel waste and pollution. We can also create an economic value for the drillers, for the operators and for the oil producers because we can give them power to run their operations.”

When LPP tried calling potential customers in the Bakken, Roby says the skeptical response they received wasn’t unexpected.

“We talked to a number of people who said, ‘Yeah, we’ve got some of those engines and they’re collecting dust in our back lot. They all failed because they couldn’t run on the hot gas,’” he relates.

However, the reaction wasn’t entirely negative with some saying that they might be interested if LPP could demonstrate its system using flare gas on site.

“Ultimately, we took a lot of time, effort and expense to put together this demonstration system,” Roby says. “Now that we’ve come out and done that, we’re getting the response that we expected.”

What’s unique about LPP’s technology is its ability to use any combination of light hydrocarbons in the natural gas liquids of Bakken crude which include ethane, propane, butane, pentane and hexane. By increasing or reducing the nitrogen level, the process can be adjusted to work with the changing composition of crude throughout a well’s production life.

“There are different combinations at different wells and within a well,” Roby says. “As a well ages, the composition of the gases changes. You have to have a system that’s robust enough to handle those changing compositions. That’s what we can do.”

The system typically operates with a 6 MW generator, but can run a generator up to 30 MW. The cost of running a diesel-powered generator is 35 to 44 cents per kWh while LPP says its system is about 12 cents per kWh.

Knowing the company needed someone in the state familiar with the business landscape, LPP added a key member to its team by bringing on legendary North Dakota entrepreneur Sylvan Melroe as a consultant. He served as the Melroe Co.’s vice president of international marketing and helped make the renowned Bobcat skid steer loader a global success.

“Syl Melroe has just been fantastic for us,” Roby says. “He immediately understood the value our technology had for North Dakota. He’s been really helpful in opening doors for us and helping us with the planning of the demonstrations. I just can’t thank him enough.”

However, all the demonstrations, business connections and marketing in the world wouldn’t matter if LPP’s technology didn’t work as advertised. What sets it apart from other gas flaring solutions is its ability to cleanly and efficiently use raw or “hot” gas that has a significantly higher heating value than natural gas.

According to Roby, this type of gas is what typically causes problems for conventional natural gas-burning combustion systems.

“What we do is modify that fuel stream and bring it back to a heating value of natural gas on a volumetric basis, which is what these gas turbine combustion systems are designed to operate on. That’s the unique aspect of our system,” Roby explains.

A gas turbine can’t tell the difference between pipeline-quality natural gas and the raw natural gas that’s been heated and diluted to look like natural gas. The gas turbine is attached to an electrical generator to meet electricity needs on site. The heat produced can also be used to make hot water for fracking operations.

Currently, many drilling sites use diesel-powered generators to produce electricity. Not only is trucking in diesel fuel expensive, but it also increases traffic congestion and the generators create air pollution.

Roby says that during the demonstrations, LPP consistently heard three positive comments from potential customers.

Besides lower power production costs and reduced air pollution, “They liked the fact that we can use the entire energy content of the flare stream,” he notes. “We don’t have to do any kind of separation, and they don’t have to figure out how to get rid of what they can’t use.”

In addition to solving the gas flaring issue, LPP’s technology provides the reliability of a gas turbine, which has longer periods between overhauls than a diesel engine.

Roby believes LLP’s solution can also help the oil and gas industry with the issue of Bakken crude’s volatility for rail shipment. He says the volatile organic compounds are left in the crude to reduce flaring and to recover the value of the light liquids.

“If we can provide the economic value for those light liquids at the well site, then that reduces the need to put it into the crude, and the crude doesn’t have to be as volatile,” he explains.

The History Of LPP
Roby, who has more than 35 years of experience in combustion technology related to energy emissions and power production, says that it’s taken 10 years to bring LPP’s system to the commercialization phase.

“It’s been a long, arduous process,” he relates. “This wasn’t some backyard mechanic kind of a deal.”

The development of LPP technology is one of those serendipitous events that sometimes occurs during research. Roby was part of a team trying to solve the fire safety problem of gases in the headspace of liquid fuel storage tanks being ignited by a lightning strike or static spark.

“The idea we hit on is that instead of taking these liquid fuels and vaporizing them into hot air where they can start combusting, we’d take the oxygen out of the air so the mixture couldn’t burn,” he explains. “We took the nitrogen that was left and vaporized the fuel into hot nitrogen, using the nitrogen both to help in the vaporization and also to dilute it back down.”

Years of experience in designing gas turbine combustions systems sparked the idea of trying to trick a gas turbine into acting as if it was burning something other than natural gas.

“We knew that gas turbine combustion systems looked for a certain volumetric heating value,” Roby says. “If we could keep all those liquids in the vapor phase and dilute them down enough so that the heating value looked like natural gas, then the gas combustor should perform like it was running on natural gas.”

That led to a bench-top experiment. It worked, but more research and testing was needed to convince gas turbine manufacturers that the lean, pre-mixed, pre-vaporized combustion process wouldn’t harm their turbines.

LPP followed the same rigorous testing and development process used by gas turbine OEMs such as GE, Siemens, Westinghouse and Pratt and Whitney. To prove the concept, they ran the LPP process on a Solar Turbines Taurus 70 gas turbine using kerosene and No. 2 heating oil.

“The next step was to publish our results in the peer-reviewed literature of the American Society of Mechanical Engineers,” Roby says. “The gas turbine combustion community could examine this and say ‘Yes, their data is right.’ At that point, we could go back to the original equipment manufacturers and, more or less, get their blessing that it would be OK to put this on the front end of their gas turbine.”

As Roby pointed out during a demonstration at North Dakota State University, “The beauty of our technology is that our gas turbine doesn’t do anything different. It runs exactly the same as it does running on natural gas. In that sense, it’s boring, but this is a place where boring is good.”

Although it’s too soon to know how much of an impact LPP Combustion will have on oil and gas operations in the Williston Basin, Roby is optimistic about the future.

“We’ve learned from experience that necessity is often the mother of invention,” he says. “When there’s a big economic driver, risk is reduced because of a big economic payoff. And that’s what we’re seeing in the Bakken.”

Author: Patrick C. Miller
Staff Writer, The Bakken magazine
701-738-4923
pmiller@bbiinternational.com