Onsite power with low emissions and maintenance is an increasing necessity for operators in burgeoning oil and gas shale plays, and a couple of Southern California-based manufacturers are seeking markets for their distributed generation devices (see Shale Daily, Dec. 28, 2011).
Chatsworth, CA-based Capstone Turbine Corp. now does about half of its global microturbine business in shale plays and other resource production activities, such as coalbed methane and mining operations, according to Jim Crouse, Capstone executive vice president for sales, marketing and product development. Capstone competitor Irvine, CA-based FlexEnergy has a zero-emission small power plant that so far has concentrated on landfills, coal mines and other more traditional manufacturing operations.
Crouse said there are “several pieces” to the shale play market for Capstone microturbines, which range from 30-200 kW and can be pre-engineered in groupings of 1-MW packages (five 200-kW units linked before onsite installation).
With higher upfront costs than competing distributed electric power sources, Capstone sells its units on low maintenance, long operating lives (up to 80,000 hours before major overhauls) and higher efficiencies and reliability, Crouse said.
Environmental pressures to cutback on diesel burning at the various hydraulic fracturing sites eventually are going to force operators to look for alternatives, and that is when Crouse wants to be knocking at the doors of the various shale players. “If they can use gas available at the site or switch to liquefied natural gas (LNG), I think it will stimulate some interest in Capstone,” he said. Permitting, emissions and price issues could all work in the microturbine producers’ favor.
In the distributed generation sector, low-emission, high-efficiency generation that can run on both gaseous and liquid fuels, such as Capstone’s microturbines, are not as competitive from a first-cost basis as diesel and natural gas engines. But Capstone’s 1 MW micro package is “pretty competitive,” Crouse said. “Where we get our advantages are in the fact that there is no oil or spark plugs to change, no valves to adjust. Any of the things that add significant operational costs we don’t have.
“We’d like to find a service provider who could retrofit an existing [onsite power] system they have, or use our turbines in conjunction with new fracking or drill rigs,” he said. “I think we’ll get there because those are the types of businesses we’re talking to now, more in the Marcellus than Eagle Ford. They are very interested, but they are all very busy right now and they already have something that works for them.”
Capstone expects to expand its business, which is still operating in the red although the two-decade-old, publicly traded firm is inching closer to profitability, according to Crouse.
Early last year, following interest in the Eagle Ford Shale play (see Shale Daily, Jan. 7, 2011), Capstone announced that it had orders for 4.2 MW of the small turbines from oil and gas operators in the Marcellus.
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