A former colleague in the oil and gas business asked me the other day why I have invested so much time and energy this year interviewing and writing about executives and companies in the rare earth minerals and renewable energy space. I told him that there were two simple reasons for this: 1) I wanted to increase my knowledge base about this growing sector of the energy business, and couldn’t figure out a better way to do that than by interviewing the leaders in it; and 2) those executives will actually talk to me.
One of the truly odd aspects about being a contributor for Forbes.com has been the fact that most CEOs and other senior executives in the oil and gas business won’t talk on the record to me, a guy who spent his entire career in that same business. This is especially true related to their companies’ efforts in the realm of ESG (Environment, Social and Governance), where they have received so much pressure to perform from investors and customers in recent years. If that seems like a missed opportunity to you, well, welcome to the party.
One oil and gas CEO I did not have that problem with is Chris Wright, the CEO of Liberty Oilfield Services. He’s so happy to talk about what his company is doing related to ESG and fracking that he actually sought me out. Talk about a different kind of senior executive, here he is.
Not surprisingly, Liberty is also a different kind of hydraulic fracturing service provider. On ESG, the company says it has been working with customers to bring real solutions in that area to the oilfields since 2013. Every new fleet the company has built since then has been low-emissions, and Liberty has offered and operated dual-fuel frac pump fleets for the last 6 years. Most recently, it has developed and is preparing to deploy a fleet of all-electric pumps that will be powered by generators that will use natural gas, ideally field gas as their fuel source. Last month, Liberty announced that it had reached an agreement with Rolls Royce to be the provider of those generators.
“The fleet’s been under development for 3-1/2 years,” Wright told me during our recent interview. “I’m an electrical engineer by background, so I’ve been watching the progress of electrical fleets since they first came out about 8, 9 years ago. Our view on electric frac fleets is that they need to check 3 boxes: 1) they must be cost-competitive with existing fleets; 2)they must be operationally as good or better than existing fleets; And 3)they have to actually have lower emissions. The history of electric frac fleets is they don’t check any one of those boxes. They don’t just fall short on one; they don’t check any of them.”
Obviously, developing such a fleet to meet those parameters has been a complex and difficult process. Wright said it involves much more than thinking you can just build a natural gas-powered generator that’s the same size as one powered by diesel.
“Look, I love combined cycle natural gas turbines as machines for grid-scale electricity production,” he said. “And these machines are awesome for long-haul airlines, they’re just fantastic. But when you scale them down, have a variable load, and also some idle time, you start to lose the thermal efficiency. You get a lot of methane slip. They’re just not good matches for what everyone’s been using them for.
“So, it’s hard to do, and we’ve worked on ours for quite some time. To design it from the bottom up, how do you make something so smart that it’s more reliable than existing fleets? And part of that is components you use. It’s not just saying, we’ve got this big diesel motor, let’s just make a big electric motor; it’s what’s the right-size electric motor to use, what’s got tens of millions of hours of run time on it, reliability, robust supply chain.
“The key for us there was to maintain highest possible power density. So, for a certain size footprint for one pump, how much power can we get through that? Another big one was to keep the thermal efficiency high and the methane slip low to deliver a better emissions footprint than you had with diesel or dual fuel engines.”
Although the natural gas generator field is highly competitive, Wright and his team determined that Rolls Royce’s mtu gas gensets offered the best solution for the problems Liberty was looking to solve. “We chose mtu natural gas gensets because of Rolls-Royce’s innovation potential to expand the power density of the solution over the same footprint,” Wright said when the agreement was announced in mid-August. “Together, these technologies advance environmental, social and corporate governance (ESG) goals of reducing emissions and delivering a low total cost of ownership solution to Liberty’s exploration and production (E&P) customers.”
Where ESG is concerned, Wright believes that the ability to use field gas rather than CNG brought to the location by trucks will be crucial in the years to come.
“Right now, most electric frac fleets and most dual fuel frac fleets are running on trucked CNG,” he told me. “It’s half the price of diesel, it’s an improvement [for emissions and economics]. People say they’re reducing flaring, but the truth is that they’re pretty much all running on trucked CNG.
“We have been using field gas for five or six years on some dual fuel fleets in the Bakken and in Colorado. It’s with customers who want to go the extra mile. So we put a little system out there, you have to remove the liquids, work a deal with a midstream player, but I think in the long run that’s the way it’s going to work. In the long run, we’re just going to use field gas.
“So, we worked to design a system that would be robust with field gas. And yeah, you don’t want to have to build a big refrigeration unit out in the field to knock the ethane out of the stream, so our goal was to get the heavy liquids out of it and make the performance work well.
“All of those efforts in parallel have taken some time, but we’re super excited now. We have fleets under construction, and given the data we’ve shown and what we’ve done, the interest is just tremendous. For us, it’s deciding how many fleets we’re going to build and where they’re going.”
If Wright’s vision of the future is correct, the days of the very loud, heavily-emitting arrays of giant diesel-powered frac spreads are numbered. For upstream companies searching for ways to improve their ESG scores and retain their license to operate in a Green New Deal regulatory environment, this new technology could not arrive at a better time.
And who knows? Perhaps the executives at companies who adopt Liberty’s frac solutions in the coming years will find themselves more willing to talk with me and other energy writers looking to tell their stories, because they’ll have a better story to tell. We can always hope.