American Oil and Gas Reporter - March 2019 - 62

SpecialReport: Permian Power
Rapid and sustained development using
multiwell pads requires a substantial increase in the amount of equipment needed
on site, which in turn, translates into dramatically increased power demand associated with oil and gas activities ranging
from drilling to production and storage-
to the point that demand often exceeds
the power supply available from the local
West Texas grid.
Every new well that is drilled and
completed adds incremental demand load
on an already stretched electricity system.
According to the Electric Reliability
Council of Texas (ERCOT), power usage
in West Texas increased 250 megawatts
between July 2017 and July 2018. Last
year, regional consumption exceeded 3.4
gigawatts for the first time. As a point of
reference, one nuclear power plant generates 1.0 gigawatt of power.
And looking forward, the pressure on
the West Texas power grid is not expected
to be alleviated anytime soon. In fact,
ERCOT says annual electricity demand
in a region with an average of fewer than
20 residents a square mile is growing exponentially faster than the rest of the
state-including the major population centers (Figure 1). ERCOT's forecast projects
that power consumption across the basin
will jump 8 percent each year through

2023 to accommodate increased oil and
gas-related demand.
With the remote nature of unconventional resource plays, this intense
rise in demand is stressing not only the
local utility grid's power supply, but
the grid itself. The Delaware Basin portion of the greater Permian alone consumed the equivalent of 350 megawatts
in summer 2018, triple its load in all of
2015. The existing electrical grid was
not built to transmit that much power.
Largely as a result of Permian oil and
gas operations, ERCOT says the amount
of electricity generation held in reserve
systemwide across Texas is at the lowest
level in decades.
Exceeding the infrastructure's original
designs leads to reliability challenges
that directly affect many aspects of oil
and gas operations. Further complicating
the situation are the surge demand requirements of multiwell production sites.
Artificial lift equipment often is timed to
turn on and off intermittently to optimize
production operations, creating sudden
intense demand for power to operate production equipment and water disposal
facilities. Sudden and simultaneous power
demand surges on the grid from multiple
operators can result in power fluctuations
and unexpected outages, especially during

FIGURE 1
West Texas Regional Peak Electricity Demand
4,000

3,500

Demand (MW)

3,000

2,500

2,000

1,500

1,000

2009

2010

2011

2012

2013

Source: ERCOT

62 THE AMERICAN OIL & GAS REPORTER

2014

2015

2016

2017

2018

periods of peak consumption, such as
summertime heat waves.
Unique Power Demands
Production processes are not the only
factors increasing unconventional resource plays' unique power demands.
By nature, shale plays require large
quantities of sand and water for hydraulic
fracturing, and the equipment required
to handle these "ingredients" comes with
its own power demands. Water pumps,
for example, are required to move fracturing water to location and cannot function without a power supply. Drilling
rigs, compressor stations, tank batteries-even the growing number of in-basin
frac sand mines and transload facilities-
require power.
Utilities clearly are struggling to keep
up with the intense demand growth for
electricity in the Permian Basin. Even
when local utility power is accessible, it
is frequently unreliable and unstable.
This presents the very real risk of unscheduled power interruptions, downtime
and sudden hard stops, which can damage
pumps and other expensive equipment
in the field.
Utility power also presents risks that
may not be immediately apparent when
creating a field development plan. Production sites using utility power are vulnerable to interruptions from events elsewhere on the grid. A transformer fire and
failure caused by a lightning strike many
miles away from the production pad can
cause an unplanned shutdown.
Local utility power in the Permian
often has voltage fluctuations ranging
from 19 kV to 23 kV. Production equipment such as electric submersible pumps,
compressors, pumping units and water
disposal facilities require constant voltage.
Unstable power increases the risk of unscheduled, expensive service interruptions,
and in many cases, makes it necessary to
replace costly equipment.
The lack of reliability in Permian
Basin field power poses such a threat to
production that some exploration and
production companies are taking the grid
into their own hands. Noble Energy Inc.
and Diamondback Energy Inc. are among

American Oil and Gas Reporter - March 2019

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