This week’s Pipeliners Podcast episode features Jeff Earl discussing how to monetize an underutilized resource using turboexpander generator systems, its difference from typical turboexpanders used in the past, and why they would be beneficial throughout the industry. 

In this episode, you will learn what wasted pressure is and why it is valuable, who would truly benefit from using the product and the three main goals behind using a turboexpander generator system.

Monetizing Waste Pressure Energy Show Notes, Links, and Insider Terms

• Jeff Earl is the Director of Business Development at Sapphire Technologies. Connect with Jeff on LinkedIn.
  • Sapphire Technologies is driving global decarbonization. Their team of experts develops and manufactures energy recovery systems that harness the power of gas expansion to produce reliable and clean electricity. Their systems are designed to convert energy wasted in pressure reduction processes into electric power without interrupting operations. By recovering this wasted pressure energy, Sapphire helps customers maximize efficiencies, improve productivity, reduce carbon emissions, offset electrical costs and achieve substantial financial returns.
• Turboexpanders, also referred to as expansion turbines, provide a way to capture the energy lost in natural gas facilities and refineries.
• AGA (American Gas Association) represents companies delivering natural gas safely, reliably, and in an environmentally responsible way to help improve the quality of life for their customers every day. AGA’s mission is to provide clear value to its membership and serve as the indispensable, leading voice and facilitator on its behalf in promoting the safe, reliable, and efficient delivery of natural gas to homes and businesses across the nation.
• The annual AGA Operations Conference is the natural gas industry’s largest gathering of natural gas utility and transmission company operations management from across North America and the world. During the conference, participants share technical knowledge, ideas, and practices to promote the safe, reliable, and cost-effective delivery of natural gas to the end-user.
• Pressure reducing valves (PRVs) regulate and minimize fluid or gas pressure in a pipeline or system. Typically installed where high-pressure fluid or gas enters the system, PRVs lower the pressure to a safe and manageable level for downstream components.
• Midstream is the processing, storing, transporting and marketing of oil, natural gas, and natural gas liquids.
• Flow rate is the speed at which the material in the pipe moves.
• Citygate is a point or measuring station at which a distributing gas utility receives gas from a natural gas pipeline company or transmission system.
• Capital expenditures, also known as CapEx, are costs that often yield long-term benefits to a company. CapEx assets often have a useful life of more than one year. 
• O&M (Operations & Maintenance) is a comprehensive approach to performing pipeline tasks related to the operation and maintenance of gas and liquid pipeline systems. A robust O&M program provides personnel with the knowledge and understanding of each situation to enable them to correctly assess the situation and take corrective action.

Monetizing Waste Pressure Energy Full Episode Transcript

Russel Treat: Welcome to the “Pipeliners Podcast” episode 298, sponsored by Enersys Corporation, providers of POEMS, the Pipeline Operations Excellence Management System, compliance and operations software for the pipeline control center to address control room management, SCADA, and audit readiness. Find out more about POEMS at EnersysCorp.com.

Announcer: The Pipeliners Podcast, where professionals, Bubba geeks, and industry insiders share their knowledge and experience about technology, projects, and pipeline operations, and now your host, Russel Treat.

Russel: Thanks for listening to the Pipeliners Podcast. I appreciate you taking the time. To show our appreciation, we give away a customized YETI tumbler to one listener every week. This week our winner is Chad Guidry with Energy Transfer. Congratulations, Chad. Your YETI is on its way. To learn how you can win this prize, stick around to the end of the episode.

This week on the podcast, we’re going to speak with Jeff Earl of Sapphire Technologies about using turboexpander to monetize waste pressure energy in natural gas networks. Hello, Jeff. Welcome to the Pipeliners Podcast.

Jeff Earl: Thanks, Russel. Good to be here.

Russel: Before we dive in, maybe you could tell us a little bit about who you are and your background.

Jeff: My name is Jeff Earl. My title with Sapphire Technologies is Director of Business Development. My background is in the industrial gas industry. I worked for Wendy and Messer in the US also doing commercial activities. I joined the company about two years ago to lead our commercial department.

Russel: What company are you with?

Jeff: Sapphire Technologies.

Russel: Tell us what Sapphire does, because this is going to bridge us into what we’re on here to talk about.

Jeff: Sapphire Technologies is an original equipment manufacturer of turboexpander generator systems. We are converting waste pressure energy into usable electric power with our equipment.

Russel: To me, this is a really interesting topic. This first came up for me, gosh, I think last year when I went to the AGA Conference. I sat next to somebody that was in this space, and they were on the podcast a couple of months or so ago. It seems like this is an expanding area of pipeline operations, particularly on the gas side.

I asked you to come on to talk about, what does it mean to monetize waste pressure energy? First we ought to talk about what is wasted pressure?

Jeff: You think about the pipeline network, these companies, their job is to move natural gas from one location to another. The way they do this is by creating a pressure differential in the pipeline. Gas is moving from a localized high pressure area to a localized low pressure area. That’s how you get gas, let’s say, from Canada down to the Gulf in Texas to liquefy it and ship it.

What occurs is a differential in energy as you go from these places of high pressure to low pressure. Equipment like turboexpanders can be installed to recover some of that energy and use it to do useful work. In our case, we use that gas pressure differential energy to spin a generator and make electricity.

Russel: For example, and I’m noodling on what this looks like, but for example, I have a citygate where I’m taking gas off of a 300 PSI distribution network and I’m dropping it down to 100 or 125 PSI. I’ve got a 200 PSI pressure drop there, and rather than just running that through a regulator, I can run it through a turbine and generate electricity.

Jeff: Yeah, that’s exactly right. Traditionally, in this industry, they’ve accomplished this pressure reduction with mechanical valves, pressure reduction valves. These devices are great. They’re reliable. They’ve been tested in the industry for the past 75 years, but they don’t have the ability to recover this energy and do work on anything useful.

Instead of spinning a turbine wheel, spinning a generator, in our case, they’re losing this energy to heat, to noise, and it’s a significant resource that these pipeline companies are essentially giving up whereas they can come in with peaceful equipment like ours and recover some of this energy.

Russel: Before we get into talking about how much power you generate and what you might use that for, to what degree does the amount of pressure drop impact the amount of power I can generate versus the amount of gas I’m actually moving?

Jeff: When we design our equipment for these applications, we look at a few different things. We look at both the amount of the pressure drop as well as the amount of the natural gas that’s moving through the system. I think you’re right, Russel. As you get closer to the end user, and as gas pressures and flow rates get smaller, the amount of power that we can recover also shrinks.

We’re trying to offer a value proposition for the whole pipeline network, both at the citygate, both at the pressure regulating valve outside the big factories across our cities all the way up through the midstream pipeline.

Where gas flow rates are very large, pressure drops can be very large also. At some of the project locations which we’re evaluating, we can recover megawatts of power at some of these individual locations.

Russel: That makes sense to me. The thing about power recovery, any kind of power recovery, is what is the amount of power I can get reliably? Then what is the range of max and min based on whatever condition?

If I’m dealing with wind turbines, it’s how much air do I have? There’s things I can do to adjust the turbines, their pitch on the props, and adjust the rate at which they spin on different wind loads. I would assume that there’s similar things you do with these turboexpanders as well so that you can provide a reliable level of load.

Jeff: Your operators would be very familiar with the variability both throughout the day and seasonally that the pipeline networks see. We are doing things to manipulate the process flow into our expanders.

We’re controlling flow rate to make sure we’re making appropriate amounts of power under variant conditions. We’re typically sizing systems to ensure that we’re optimizing design in light of that variability.

For example, if continuous power output is important to an operator, we would design to minimize seasonal flows that they might see during the summer months. Alternatively, a particular operator may have a project location in an area where peak power rates during the winter months, where natural gas use is highest, they can demand a high premium for the power which they’re producing.

In these cases, we might design the turbomachinery in a different way. In a way where we can capture those peak power output periods.

Russel: Like a lot of other things in pipeline, these solutions are engineered for the process in the application. How are people using this electric power?

When we were getting prepared for this episode, we talked a little bit about the idea of capturing power and then feeding it back to a compressor station because to move gas out of a gathering system into a citygate, I’ve got to pressure it up to move it. Then when I get it to the citygate, I have to take that pressure back out.

This is almost a way to balance my energy requirements. It’s conceptual, right? I’m sure the devil’s in the details like everything else.

Jeff: The natural gas network is huge. There’s no other way to place it. There’s a lot of interdependency in those assets. It’s not uncommon for a citygate station to be located very far away from a compressor station. Those assets, there’s been a trend in the industry to electrify compressors and we think we have an interesting value pitch here.

Recover some of the waste pressure energy, which you would be typically losing at this reg station, feed it back through the utility to your compressor station, and offset some of the load which you would be otherwise consuming.

Russel: I could see it, too, that like in a power plant application, the power plants, on their own, have fairly steady loads. If I have a fairly steady load of gas demand, then that would drive a fairly steady electric output on a turboexpander.

Jeff: That’s right. In some of these applications, we can have very high confidence in the amount of power that we’re going to make during any period. Let’s take, for example, this 200 megawatt power plant.

The natural gas flow rate into that plant is really not going to change. We can have very good confidence about how many of our turboexpander systems we need to specify for the project location, and we can give the operator of the plant very good assurance about how much base load power that we’re contributing to the operation.

Russel: For the power generator, that extra electricity’s purely accretive.

Jeff: And typically coming at a relatively low capital cost. We think we have a very competitive levelized cost of electricity, and that it can be installed in a very distributed supplementary way to some of these assets.

One of the interesting things about the natural gas network is that it has been built and has been in operation for a very long period of time now. We think turboexpanders can be supplementary installed into these capital assets to make them more efficient to recover power throughout regular operations.

Russel: It would be interesting, you may know these numbers, but it would be interesting to me to know that if I had a 20 megawatt power plant and I put a turboexpander on the gas feed, how many additional megawatts do I get by doing that?

Jeff: I think we’re going to have to follow off on this one, Russel.

Russel: No, that’s fine. I’m a little bit notorious for asking questions that are maybe not appropriate on a podcast because I just go where my curiosity leads me, but I understand. To me, though, it’s very interesting because, again, in that particular business case, that power is purely accretive.

Rather than just buying the gas and running it through a regulator and taking a pressure cut, I’m going to run it through a turboexpander, take a pressure cut, and get some power generated out of it. That’s a pretty compelling argument.

Jeff: Like we mentioned, these systems, they’re optional. They are supplementary systems which are improving typical operations. We are, as our standard installation procedure, installing this equipment on a fully redundant bypass line. We’re redirecting a portion of the natural gas flow from the typical pressure reduction valve into the expander.

The customer, the end user, let’s say the operator of this power plant, has full autonomy on whether they’re utilizing that asset on an ongoing basis or whether they’re placing the gas flow through the existing Joule Thompson valves. It is accretive in that way. It’s incremental power that they’re adding onto the base load capacity of the plant.

Russel: We’ve already talked about a couple of applications on the feed to a burner tip – we talked about a power plant – but I would think any kind of burner tip would have the same kind of application. We’ve talked about citygates and using that pressure to feedback, to compression, that type of thing. What are some of the other compelling business cases for this type of technology?

Jeff: One opportunity that we’ve seen good interest in in the United States is the use of these produced power in running data centers. We have a partner called Evolve Energy who has some competency in this space. They’ve come up with some standardized project layout designs where a certain amount of power is produced in our turboexpander system.

That power is routed over to a data center, a building or a cargo container that houses servers. These servers are providing services to companies like Amazon Web Service or to the local Internet service provider in an area.

They’re interesting use case for the produced power because they’re modular and they can be transported to facilities where there may not be a large load already existing. They’re providing the pipeline operator with a flexible way to consume the power which is being made in the expanders.

Russel: Interesting. It’s kind of thinking of not only the turboexpander and the power generation, but the package also including some kind of modular server farm that moves around with the turboexpander. Is that the idea?

Jeff: For every megawatt of power that’s produced, it needs to be consumed too, right?

Russel: Right, we don’t have a good way to store it.

Jeff: At Sapphire, we’re trying to offer creative solutions for our customers as to how to consume that power. I’ll give you another example.

Again, the operators would be familiar with how remote some of their asset locations can be. Sometimes there’s no connection to the grid. Sometimes there’s no local equipment to drive with the produced power, but there is a lot of gas flow moving through some of these very sparsely populated locations in the country.

Having the ability to bring a load, like a data center, to those project locations can be enabling for the project to move forward. It provides the business case to the operator.

Russel: I’m thinking about, if you think about gas gathering and processing, there’s a lot I do to get pressure into the gas and get that gas to a processing location, but those processing locations are often quite remote. Makes me wonder, to what extent can you generate enough power to support a process? Does that question make sense?

Jeff: Yes. I think our solution isn’t necessarily providing a full baseload power to some of these larger assets like a gas processing plant. What we are doing is offsetting a significant fraction of the overall operating requirement.

Again, I would encourage the operators to consider turboexpanders in some way meaningful efficiency gains for their systems. I would ask the engineers, “Would it be impactful if I could come to you with a solution that’s offsetting 10 percent of the overall power requirements for an asset?”

If something like that is compelling, then maybe installing a new turboexpander at one of these gas processing facilities to recover some of the waste pressure into that asset could be attractive.

Russel: What I’m wondering about, turbo expansion is a common method for doing gas extraction, to separate methane from the wide grade. I’ve never seen one of those turboexpanders also generate electricity. I’m wondering if that is a possibility.

Jeff: Our system can absolutely be specked for this application. You’re right. Turboexpanders have been used for decades to run this gas purification process. Our system materially looks a little bit different than some of that prior equipment which has been utilized, because of the inclusion of the permanent magnet generator on the back end of our design. We’re able to do two things then.

The first is to create the temperature differential, which is required to separate out the heavies from the natural gases, but we’re also able to recover useful power, export it from our generator to our power electronics, and feed it back into the plant.

Russel: That raises some other interesting issues for the processing folks out there about, “Well, how much power do I recover and what does it take to integrate that power back into my overall plant load?” I would assume there’s some gear required there to make all that make sense.

Jeff: There are certainly integration costs. The full scope solution isn’t just the product that we’re offering. There’s valving required, there are integration costs, things like transformers may be necessary.

Total install costs though, we think we have a very compelling value proposition. This is electricity, which is really taking advantage of the existing operational parameters of the facility. There’s no fuel cost, which is a very interesting proposition partly because of the increased regulation of combustion of natural gas.

Russel: A lot of the older facilities, they’re just taking that gas and they’re running it back to gensets to generate power for those facilities, depending on where they’re located if they have to be off grid.

Jeff: That’s right. We think, as regulations in the US and in other countries become more and more aggressive towards power production practices like that, technologies like ours are going to become more attractive to operators.

Russel: Yeah. It’s interesting. A lot of times when you look at some technologies, and when you first look at them, the question that comes to mind is, “Why aren’t we already doing that?” This is one of those things. Why aren’t we already doing that? That just makes so much sense. Is there anything that’s happened with technology in the last 5 or 10 years that has changed the dynamics or changed the economics?

Jeff: We were talking about turboexpanders that have been used in liquefaction cycles for decades. Our system, as we also talked about, looks a little bit different than those prior systems.

As part of our design philosophy, we’re trying to do three main things. The first is to reduce operating costs of the system, second is to reduce maintenance costs of the system, and the third is to reduce CapEx.

In terms of operating costs, we do this in a few different ways. Primarily, we specify high reliability, active magnetic bearings, which eliminates the need to maintain lube oil systems. It maintains a frictionless environment for the rotating shaft, and so it allows the equipment to keep a high uptime without need for overhaul.

On the maintenance side, similarly, we’re eliminating many of the traditional support systems which turboexpanders have required. Our system doesn’t need a cooling water jacket. It doesn’t need any pumps to maintain oil to the bearing sets. All of this keeps the equipment spinning more reliably and reduces the variable operating costs for maintenance.

Russel: Magnetic bearings, I know very little about such things, but is that fairly new for this type of equipment?

Jeff: Magnetic bearings have typically not been utilized in rotating equipment like ours. Typically, turboexpanders are operating on bearings, either rolling ball bearings or fluid film bearings. Active magnetic bearings are a core competency of Sapphire Technologies as a company. It’s one of the enabling technologies which we’ve included in the design.

We think that including technologies like this are developing a new value proposition for these operators. It’s making the equipment more attractive financially because it’s enabling extended design life, it’s enabling lower operating cost, and overall it’s allowing us to offer a lower CapEx product because of some of the standardization that we’re doing in the design.

Russel: I would assert, too, that by eliminating the fluids and the other things you were talking about, that you’re eliminating the O&M effort for the ongoing operation of the equipment. For most operators, the last thing they need is another thing to maintain and repair.

Jeff: Our maintenance schedule, I would encourage any engineer in the plant to take a look at it because the overhauls that they’re more familiar with, other rotating equipment, are just not there. Magnetic bearings are great because they eliminate any friction between the rotating shaft and the bearing set. This allows for a very long design life, eliminating the need to overhaul.

Russel: Yeah, there’s effectively no friction. There’s no contact between surfaces. That’s a game changer.

Jeff: It’s great technology. It’s a very complicated technology. Some of the sensors which we include in our system, they’re measuring shaft position thousands of times per second, so it’s very precise and very powerful equipment. There are only so many manufacturers of mag bearings in the world. Sapphire Technologies is one of them.

Russel: Interesting. That actually kind of explains why the economics are different. That’s one of the things that’s driving this kind of solution. That’s helpful for me to understand.

Jeff: The hardware which we’re including is absolutely unique. We think our machine really does look different than any other product that you could find on the market. The other way we drive this value proposition to be more favorable for the operator is standardizing the hardware everywhere we can.

We want to offer a very modular product that can be deployed throughout the pipeline. One of the benefits that we have as compared to, let’s say, the turboexpander, which is specified for the 200 million SCF a day gas plant, is that it looks the same whether it’s installed in the citygate or the interstate pipeline. We’re specking the same equipment, which allows us to drive down manufacturing costs.

Russel: Interesting. Have you guys done any analysis? How much power could be captured in the US with a mature deployment of this kind of technology? Have you all looked at that? How big is that number?

Jeff: We have looked into this number. There’s good data and visibility on how many miles of pipe are in operation throughout the country.

We’ve done very detailed network studies for some of the larger operators in the country, and so we have a good idea of the asset mix which they’re operating. How many high pressure regulation stations, how many citygate stations are in a typical mix of the network. This number, it’s hundreds of megawatts that we think we can recover with turboexpanders.

There are other options in this market. There are other companies manufacturing products to recover this waste pressure energy.

I think it’s a huge market opportunity both for Sapphire and competitors to continue to commercialize their technologies, continue to roll out turboexpanders throughout the pipeline network so that those waste pressure opportunities can be accretive to these operators so that they can begin to make clean power and make their network operations more efficient.

Russel: This subject’s fascinating to me. A year ago, I didn’t even realize that there were companies out there doing this, so to me, it’s brand spanking new. I guess a couple things I would take away from this conversation…

One is taking waste pressure and monetizing it. That’s an engineered solution, but the opportunity is not to engineer each implementation, but to engineer specific packages. If you think about citygates, people know that various citygates are sized in certain ways to deal with certain loads.

Most of the regulator manufacturers, you go to them and you know which regulator you’re specifying, based on that drop and that load. There’s a lot of opportunity to do the same thing here. To me, this is an engineering solution, but it can be universally engineered, if that makes sense, what I’m saying there. That’s one takeaway.

The other takeaway for me is, if you’re a gas pipeline company and you’re not looking at this, then you’re going to be left behind. You’re going to be a gas pipeline of less preference if you’re not doing this 10 years from now.

Jeff: These operators are actively looking for technologies to decarbonize operations. I think that turboexpanders and recovering the wasted pressure energy, which currently exists within their networks, is a no brainer. It’s an asset which they already own. It’s an equipment which can be very easily installed on a fully redundant bypass.

Project duration can be short, too. It can give them short term wins, allow them to put some clean power production on their balance sheets, show to their LPs and investors that they’re starting to make a difference.

Russel: I would also say that, not knowing the engineering behind all this, it would appear, at least in this conversation, that it would have a minimal impact on how they operate.

Jeff: I think no…

Russel: Yeah, you’d say no impact.

Jeff: I think no impact is more accurate actually, Russel. They, out of the turboexpander, will be experiencing the same regulated pressure as they would get out of a valve. This equipment is, as standard practice, installed on a fully redundant bypass line. At any time, they have full autonomy to switch back to existing pressure regulating valves.

We recognize, as a company, and it’s part of our philosophy, that this industry requires very high reliability, that you can’t interrupt operations. You have to make sure the downstream customer is getting the gas that they promised. We set up our system and our process control scheme to ensure that reliability is key and front of mind, as we go about any of these projects.

Russel: What I would say, I don’t like absolutes. I think absolutes are dangerous, but there is some implication, because you’re going to have a new kind of equipment that you need to operate and maintain. That has some impact on operations, in terms of staffing and skills and that sort of thing, but in terms of just physical operation of the pipeline, I get your point.

Jeff: It’s nice, in some ways, that turboexpanders are not so unfamiliar to this segment of the market. Equipment like this has been used in gas processing plants for years.

What we’re trying to offer this market is a slightly different design of that historical equipment, something that’s better suited to commodity power production, instead of specialized, engineered equipment for gas processing.

Russel: Absolutely. How would you like to wrap this up? What would you want pipeliners to know about turboexpanders and such?

Jeff: Every operator in the US, in Canada, in the world, has currently an underutilized resource. It’s this wasted pressure energy. Operators are compressing gas in order to get the product to their customer, but they have an opportunity to recover some of that pressure energy along the way. Turboexpanders, like Sapphire Technologies, are the equipment which enables that process to happen.

Russel: Awesome. This has been awesome. As always, I’ve learned a lot and I probably have a whole lot more questions, but we’ll save those for another time.

Jeff: It’s great to talk to you, Russel. Thanks for the chance.

Russel: Thank you for coming on. Appreciate your time, Jeff.

I hope you enjoyed this week’s episode of the Pipeliners Podcast and our conversation with Jeff. Just a reminder, before you go, you should register to win our Pipeliners Podcast YETI tumbler. Simply visit PipelinePodcastNetwork.com/Win, and enter yourself in the drawing.

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Transcription by CastingWords