Legislature(2011 - 2012)BUTROVICH 205
01/18/2012 03:30 PM Senate RESOURCES
| Audio | Topic |
|---|---|
| Start | |
| Presenation: Heavy Oil Solutions, Stephen Yarbro of Los Alamos, New Mexico | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
SENATE RESOURCES STANDING COMMITTEE
January 18, 2012
3:35 p.m.
MEMBERS PRESENT
Senator Joe Paskvan, Co-Chair
Senator Thomas Wagoner, Co-Chair
Senator Bill Wielechowski, Vice Chair
Senator Lesil McGuire
Senator Hollis French
Senator Gary Stevens
MEMBERS ABSENT
Senator Bert Stedman
OTHER LEGISLATORS PRESENT
Senator Cathy Giessel
Senator Joe Thomas
Senator John Coghill
Senator Charlie Huggins
Representative Lance Pruitt
Representative Alan Austerman
COMMITTEE CALENDAR
PRESENATION: Heavy Oil Solutions; Stephen Yarbro, SNT Ventures,
of Los Alamos, New Mexico
- HEARD
PREVIOUS COMMITTEE ACTION
No previous action to record
WITNESS REGISTER
STEPHEN YARBRO, SNT Ventures
Los Alamos Laboratory
Los Alamos, New Mexico
POSITION STATEMENT: Gave presentation on SNT Ventures' new heavy
oil technology.
ACTION NARRATIVE
3:35:12 PM
CO-CHAIR JOE PASKVAN called the Senate Resources Standing
Committee meeting to order at 3:35 p.m. Present at the call to
order were Senators Wielechowski, French, McGuire, Paskvan and
Wagoner.
^Presenation: Heavy Oil Solutions, Stephen Yarbro of Los Alamos,
New Mexico
Presenation: Stephen Yarbro, Los Alamos National Laboratory and
owner of SNT Ventures LLC; Heavy Oil Solutions
3:36:26 PM
CO-CHAIR PASKVAN announced a presentation about new heavy oil
technology, an area that has opened up a lot of resources in
North America including the shale gas revolution in 2006 that
has led to increased throughput from individual wells using
fewer drill rigs. He invited Dr. Yarbro to present his thoughts
to the committee.
STEPHEN YARBRO, Los Alamos National Laboratory (LANL), New
Mexico, said he is also an owner of SNT Ventures, LLC. He said
he would describe a new technology that he thinks will be
beneficial for the State of Alaska, but before that he wanted to
review his credentials. He first started working in natural gas
processing with Phillips Petroleum and then went to work for
Rockwell International's Hanford Atomics Products Operations at
their plutonium facility. From there he went to Los Alamos
National Laboratory (plutonium facility) and has been there for
the past 28 years. Explaining the series of events which lead to
the current technology, he said 10-15 years ago the laboratory
was working on recovering radioactive waste from underground
tanks on the Hanford site and he was part of a multi-
disciplinary team that was developing a "super critical water
oxidization process" to remove the organics from the waste, so
that the waste could be sent for vitrification.
After several years that project was completed and he moved from
the plutonium facility to a part of the laboratory where he used
his experience to analyze foreign countries' nuclear weapons
programs. As such, he is part of an organization that has the
nuclear emergency search team that looks at various issues
worldwide. As part of that charge, they developed very high
energy radiography. During the British Petroleum (BP) 2010 Gulf
of Mexico oil spill, LANL was asked to deploy that radiography
to look at the underwater well casing, so if they had to develop
explosive closure devices they would know where to place them.
He looked at lot of the real-time feeds from under water and
began to consider how the high pressures (5,000 psi) depth could
be used to process the oil. He reflected upon his early
experience with super critical water; the two came together and
now he has developed this "super critical water treatment" which
takes heavy oil with the consistency of peanut butter and makes
it the consistency of water. This process could have application
to Alaska's vast heavy oil deposits which is difficult to pump
into the TAPS because of its high viscosity.
3:40:56 PM
He recounted how conventional oil production is going down and
that drilling to find more is expensive. Huge amounts of heavy
oil are available globally, but it has been hard to exploit.
It's hard to transport because of its high viscosity; it's
typically $10 to $20 a barrel less than conventional oil and
only about one in four US refineries can process it.
MR. YARBRO said Alaska is very fortunate in that it has
somewhere between 24 to 33 billion barrels of heavy oil deposits
split between the Schrader Bluff, West Sak and Ugnu Fields.
Heavy oil is fairly shallow so overcoming the viscosity issue
would make it relatively easy to get and it doesn't require very
expensive offshore drilling.
3:42:38 PM
The issue around development of heavy oil is its viscosity. So,
more wells must be drilled to recover heavy oil than for
conventional light oil and some type of thermal technique has to
be used, such as steam recovery, to get the oil out of the
ground. In California that is not a problem, but it is in Alaska
with its permafrost. Also he said that heavy oil is somewhat
depleted in hydrogen compared to light oil, so fewer products
can be derived from it. It also sells at a lower price than
conventional oil. Typically the economics is what have held back
heavy oil development.
3:43:31 PM
Alaskan oil is somewhat unique in that between the West Sak and
Ugnu Fields there is a "grading viscosity" everywhere from
syrupy oil in the West Sak all the way up to honey and almost-
like-peanut butter in the Ugnu Fields. However, BP, for example,
is beginning to successfully develop and produce heavy oil at
its Milne Point S Pad using the CHOPS (Cold Heavy Oil Production
with Sand) process.
3:44:03 PM
He said his solution to the problem is to use "supercritical
water extraction and refining" (SCWER) that uses the unique
properties of water at very high pressures and temperatures
beyond its critical point to dissolve the heavy oil. He
explained that oil dissolves completely when water passes its
critical point (applying high temperatures and pressures to
thermally crack the oil). This process takes long chains of
complex oil molecules (c12, c50, c 60 and higher) and thermally
cracks them down to smaller c-chains (like c5s and c6s), the
higher-value components of conventional oil. The high energy of
the water essentially just tears it apart. Water at those
temperatures also provides some of the hydrogen needed in order
to get the hydrogen value up. It's very unique in that respect.
CO-CHAIR PASKVAN asked if he used the SCWER to remove the
hydrocarbons from the source when he worked with plutonium. How
did that process relate to this one?
MR. YARBRO answered that super critical water oxidation can
completely destroy organics. It can take a fairly complex
organic to carbon dioxide, so you get almost complete
conversion. You just don't run the conversion all the way to
complete. You use it to break up the molecules just enough to
get the ones you want (the c5s and c6s) and then stop. Or if
needed, you can go all the way to the end and produce carbon
dioxide. In fact it's so complete the military has licensed a
variant of this type of process for chemical weapons disposal.
He said they have carefully looked at the conditions to get to
the point of getting just enough thermal degradation to get the
products of value.
SENATOR WIELECHOWSKI asked if heavy oil is 5,000 ft. down in the
ground, do you inject water into the ground or bringing the oil
up first.
MR. YARBRO replied that they intend to integrate with the
current BP process, CHOPS, that uses large progressive cavity
pumps down-hole to pump the material out with the sand. The
advantage to that is that it has been thoroughly tested in
Canada's oil sands. The disadvantage is that you don't get all
of the oil; a lot is left in place. Going the next step of using
the thermal recovery technique (like California has developed)
of injecting steam into the reservoir that melts the oil and
then pumping it out provides for much higher recovery. His
process can use either the steam that is pumped down-hole as it
comes out or the waste heat that is generated in the production
process to inject down-hole to help recovery.
3:48:14 PM
SENATOR WIELECHOWSKI asked if they can pump up all the heavy oil
they can get and then pump in steam to separate the remaining
oil and water and to make the oil less viscous.
MR. YARBRO responded that when the oil comes off the well head
is when it gets mixed with the steam and that is when it becomes
less viscous. It enables transport to and through the pipeline.
If they want to inject steam down-hole, they could integrate
with that process or with CHOPS that doesn't use that process.
They are flexible, but the plan is to integrate with CHOPS and
inject the steam at the well head as it comes up.
3:49:05 PM
SENATOR FRENCH said it's a fascinating idea and asked what
becomes of the injected water.
MR. YARBRO replied that this is the unique part of this process.
The oil and water becomes a single phase because when dropped
below the critical point, water behaves like water and the two
separate very cleanly. Then all you do is use a gravity settler
to skim the oil off.
SENATOR FRENCH asked if the water would stay combined with the
oil through its shipment down TAPS.
MR. YARBRO answered that they intend to recycle the water at the
well head to keep water usage low. That way the low viscosity
oil can be transported without the water; whatever trace amounts
are left can easily be removed at the refinery or later on.
3:50:37 PM
SENATOR WIELECHOWSKI asked how much water is used per barrel and
assuming they are heating the water with natural gas, how much
of that would be used.
MR. YARBRO answered that it depends on the oil feed. It will be
somewhere between two to three barrels of water per barrel of
oil; but the water gets recycled, so the overall water usage is
low. They intend to use electric heaters to heat the water up to
get the reaction going and then the reaction itself gives off a
fair amount of heat. So, again the overall energy use is
relatively low. Comparing this to energy use in a typical
refinery, this is probably in the middle to low end of energy
use per barrel produced.
SENATOR WIELECHOWSKI asked how many megawatts of power would be
needed.
3:52:12 PM
MR. YARBRO replied for 25-barrels per day, the heaters would be
225 kilowatts to get the temperature up; but once the reaction
is started it generates about 220 kilowatts of power.
3:52:39 PM
SENATOR FRENCH asked if oil stays light as long as the water is
still in it.
MR. YARBRO replied that once the water has been added, the oil
has been upgraded to conventional oil. It starts off like peanut
butter and ends up with "light phase" floating on top of the
water. Once the two are separated, the oil is essentially like
water.
3:53:24 PM
SENATOR FRENCH said the reaction upgrades the oil at the well
head; so the water is almost a waste product.
MR. YARBRO replied yes; it's a re-agent that they recycle and
use to react the oil from the consistency of sticky creamy
peanut butter to oil-like water.
3:55:09 PM
CO-CHAIR WAGONER asked what happens to the oil chemically that
makes it lighter and still allows it to continue being oil.
MR. YARBRO replied that the large heavy oil molecules sometimes
have up to 100 carbon molecules in chains and rings. Water at
high temperatures and pressures is a very aggressive environment
and it literally "just tears these things apart." As it tears
them a part and fractures them, one can think of a glass
breaking into fragments that can keep being broken down to the
sizes wanted. So, you break it down to the distribution found in
conventional oil. As the chains and rings are broken, ends are
exposed and they combine with the available hydrogen that is
produced in the heated water. This process produces a product
that looks like conventional lighter oil.
CO-CHAIR WAGONER asked if that uses up the hydrogen in the
water.
MR. YARBRO answered yes; so, they bleed off a small make-up
stream. The water can continue to be purged of sulphur or
metallic impurities and used.
3:57:46 PM
CO-CHAIR PASKVAN asked him to expand on the extraction of
sulphur as part of this process.
MR. YARBRO explained that it's very dependent on the type of
oil. The complex structure of the oil molecule has sulphur
compounds bound up in it. Those bonds tend to be weaker than the
carbon-hydrogen or carbon-carbon bonds and can actually be
broken quicker than the other bonds; then it reacts with the
water to make a variety of different compounds that are soluble
in the water phase and not in the oil phase. So, when you
separate them, you get this nice clean water and oil phase and
the sulphur compounds are in the water. You can bleed a small
amount off and take that to waste treatment and disposal and
then bleed a small amount in.
He said that because the molecules are very complex, they don't
completely understand all the reactions, but they know that as
long as they run the process within the right conditions they
get pretty good sulphur removal (50 to 60 percent).
MR. YARBRO said a dramatic reduction in viscosity is what you
want, because BP is now doing a great job of producing heaving
oil at the Milne Point S Pad, but they have to use conventional
oil to essentially dissolve the heavy oil to get the viscosity
where it needs to go. And this technology will take them
directly to that at the well head without having to do blending
which leads to more volume in the pipeline. He added that this
process right now doesn't use exotic equipment and they don't
need proprietary catalysts.
4:00:09 PM
SENATOR STEVENS joined the committee.
MR. YARBRO said the processing equipment fits in an 8X8X20 ft.
common transfer container (25 barrel a day base industrial size
that they intend to put in the field). It has typical valves and
high pressure pumps and things that are very familiar to the
petrochemical industry.
Their proposed pilot project from the bench scale to being
industrially ready uses two standard 8X8X20 ft. transfer
containers, one to house the individuals that would be working
with the equipment and the other for the equipment itself.
MR. YARBRO said they intend to develop collaborations with the
University of Alaska (UAA), tapping into its petroleum
development laboratory, and use the facilities at the UAF
Pipeline Training Center.
CO-CHAIR PASKVAN asked if he had contacted the University and
the Pipeline Training Center yet.
MR. YARBRO replied yes. He has had an ongoing dialogue with Dr.
Patel and his associates, and his associate, Jerry Myers, is
meeting with the individuals running the pipeline school to get
a plot plan to finally place the five-barrel per day unit on the
facility so they can begin work there.
4:02:45 PM
He said their path forward and the collaborations that are
important for the project's success are clearly to develop
collaborations with UAA and UAF Pipeline School because of their
enormous experience and knowledge about how to integrate this
process with the production process and about how it would
interface with the actual oil field operations. They would like
to build and test a five-barrel per day unit, which would give
them a lot of the industrial skill experience. Then they would
like to go to a 25-barrel per day unit, which they think is the
smallest industrial block that could effectively be fit together
depending on the production assets in the field. Because those
blocks could be built in the Fairbanks area, a lot of jobs would
be associated with their fabrication and deployment. They can
build any size needed, but it is a standardized process.
4:04:36 PM
CO-CHAIR WAGONER asked what temperature the oil is after the
water is separated out.
MR. YARBRO replied about 350 to 400 F. Waste heat might need to
be removed or it may need to be blended at those temperatures.
When you reduce the viscosity and remove the sulphur, metallic
impurities and neutralize the naphthenic acids, it reduces
corrosion in the pipeline and increases the value of the oil.
Originally they thought about developing this for the California
heavy oil fields that already have extensive infrastructure.
California has steam-assisted gravity drainage and a special
high-speed heated train to transport. If they can increase the
value of a barrel of oil by $15 or $20 and keep the processing
costs within that delta, that would be a real boon to the
California market because they could make more per barrel of oil
for the same infrastructure cost. They also discovered that as
the molecules are broken up, the volume is increased by about 9
percent.
SENATOR WIELECHOWSKI asked if he had financial models of the
estimated cost per barrel for extraction.
MR. YARBRO replied yes, but it depends on the production process
that is used; but a fully developed infrastructure that is
already injecting steam down-hole would run around $10 per
barrel up to $14 per barrel without that.
SENATOR WIELECHOWSKI asked if that cost would be added on to
what it costs already.
MR. YARBRO replied yes.
SENATOR WIELECHOWSKI asked if he knew the cost for heavy oil
extraction in Canada using conventional methods and how his
price compared to that.
MR. YARBRO replied that he didn't have a very good cost for
that, but he knew they invested about $10 billion recently in a
new facility for a retorting process that dissolves material
out; and they are still economically effective at that price. He
envisions a smaller more distributed processing that allows more
tailoring to the field and the production process rather than
these massive billion dollar facilities that are in one place
and the oil needs to be transported to keep the facility viable.
4:09:56 PM
MR. YARBRO said they believe there is a real positive impact for
the state with successful development of this technology. They
believe they can maintain and perhaps increase revenue from the
TAPS along with the associated benefits of the jobs and oil
field development.
He said Jerry Meyers, Heavy Oil Solutions, has been a partner in
helping understand the Alaska part of this and Michelle Huft,
also with Heavy Oil Solutions, has been helping with some of the
business development along with the UAA Petroleum Development
Laboratory and the UAF Pipeline Training Facility.
4:11:30 PM
In conclusion, he said they believe this technology, if properly
developed and successful, could provide more oil for the TAPS.
They know they can reduce the viscosity of oil from honey to
water; and now they want to take it to the next step of higher
throughput. This would leverage the investment in conventional
pipeline trucks and refineries allowing them to last much
longer. The design itself is based on industrial proven
technologies; it uses standard petrochemical equipment and
standard commodity chemicals and they think the development will
be relatively straightforward from the bench scale.
CO-CHAIR PASKVAN asked what he would like the legislature to
consider about this new technology.
4:12:54 PM
MR. YARBRO answered that he would like the legislature to
consider a capital investment in the development of the process.
It would be good for the state because rather than going
directly to an oil company that would own the technology or
believe they owned it, that investment from the state at this
point would allow a diverse licensing structure and a diversity
of applications for the state and therefore be a good return.
CO-CHAIR WAGONER asked his estimate for building the
demonstration unit in Fairbanks.
MR. YARBRO replied that they are working on getting precise
numbers within the week.
CO-CHAIR WAGONER asked if the state became involved with the
licensing and use of technology, did he plan to retain ownership
of the process.
MR. YARBRO replied that the current plan is to form an Alaskan
company and then to essentially pass the license to it to
exercise on behalf of the company.
CO-CHAIR PASKVAN thanked Mr. Yarbro for the presentation.
4:16:09 PM
Finding no further business to come before the committee, Co-
Chair Paskvan adjourned the Senate Resources Standing Committee
meeting at 4:16 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| Alaska Heavy Oil Sen Resources 011812.pdf |
SRES 1/18/2012 3:30:00 PM |