DICKINSON PRESS ‘The Drill’ : February 25, 2015
BISMARCK TRIBUNE ‘North Dakota News’ : February 27, 2015
Oklahomans Jack Kelley and Skip Bennett are an unassuming duo with a big idea.
The entrepreneurs have a plan to capture natural gas, eliminate flaring at the wellhead, create a viable commodity from that gas, and pay both energy companies and royalty owners for their share, although a North Dakota university researcher has some doubts about the market for the gas.
B&A Global Energy, a small company based in Tulsa, Okla., has acquired the rights to the Energy Capturing Operating System (ECOS), a portable refinery able to be placed at a well site. The ECOS captures and processes methane gas produced in the hydraulic fracturing process into liquefied natural gas (LNG) and was invented by the company’s senior vice president of technology Michael Wu of Taiwan.
“This is a game-changing technology to the oil and gas business,” said Kelley, B&A Global’s president and CEO and a 25-year veteran of the energy industry who is also a retired U.S. Air Force pilot and a licensed architect.
B&A Global wants to bring its ECOS technology to the U.S. — specifically to North Dakota’s Bakken and Texas’ Eagle Ford shale formations — after witnessing the technology work in Asia.
“We have chosen the Bakken as our focus,” said Bennett, B&A Global’s board chairman and founder.
The idea, they say, is simple.
Turning off the lights
B&A Global’s plan is to bring the portable refineries to well sites where natural gas is being flared. The ECOS unit captures methane gas released by the well, and then separates, compresses and refrigerates it to minus 261 degrees, converting the methane into liquefied natural gas without it ever leaving the well site. The process, B&A Global’s representatives say, eliminates the need to flare gas released in the drilling process.
The natural gas would be stored into specialized tank batteries and trucked away from the site in cryogenic tankers. When a well site is no longer flaring enough gas to be economically viable, the system can be moved — like an oil rig — to the next well pad.
“Wherever an oil well can be drilled, ECOS can go,” said Michael Wu, a Taiwan-born inventor and entrepreneur, and engineer of the ECOS.
Kelley said the business plan calls for B&A Global to pay oil and gas companies market value for the natural gas captured, cut checks to mineral rights owners and sell it on the open market.
“This is a win-win situation for everybody,” Kelley said. “There cannot be anybody opposed to what we’re going to do.”
Kelley and Bennett came to North Dakota in January and spent more than a week driving throughout the Oil Patch in a rented Ford Explorer. During that stint, they said they spoke about the ECOS with anyone who would listen — including oilfield service company representatives, trucking companies and landowners.
Bennett, who spent more than two decades with IBM before moving into energy investment banking, recalled a conversation he had with a farmer near Keene, N.D., who told him he can hunt coyotes at night “by the light of the flares” that sound “like a jet engine.”
He said B&A Global wants to turn off the lights and the noise, and give mineral rights owners their share of a profit they believe is literally going up in flames.
They also stress the impact the ECOS would have on the environment by eliminating flared gas while creating a viable alternative fuel that is growing in popularity in foreign markets.
“The oil and gas operator that’s flaring wins because they get money for what they’re wasting, and the government wins,” Bennett said. “The environmental people are happy. The economic people are happy.”
LNG in North Dakota
Chad Wocken, the senior research manager at the University of North Dakota’s Energy and Environmental Research Center, said he is interested to learn more about B&A Global’s technology.
“I do think it has some merit and some capability, if it can be proven at the appropriate scale and conditions,” Wocken said.
However, he said the biggest hurdle with producing liquefied natural gas in North Dakota is finding the market for it.
Wocken said the state has “very little LNG infrastructure,” meaning the product B&A Global hopes to produce would most likely need to be exported out of the state or country. He also questioned whether the cost of doing that, as well as the logistics involved with creating, shipping and marketing the gas, makes B&A Global’s process profitable.
“Anyone coming in with LNG technology, they’re going to have to bring some market to go with it,” Wocken said.
Kelley and Wu, who is also B&A Global’s senior vice president of technology, say the market for the gas already exists in Asia and pointed to its increasing use as fuel for semi trucks in the U.S. They also believe the creation of centralized processing plants in North Dakota — such as Prairie Companies’ North Dakota natural gas plant in Tioga, N.D. — proves the commodity is viable, while arguing their system is more economically feasible.
B&A Global’s long-term plans include creating liquefied natural gas and compressed natural gas (CNG) pumping stations across the northern states. In an email, the company stated it has the rights to “conversion kit technology,” which converts diesel engines to the liquefied gas and gasoline engines to compressed gas.
One ECOS unit can process 10,000 gallons of the gas daily, according to the company. Kelley said hundreds of units can be set up. Pipeline infrastructure would be minimal and only needed if the ECOS was set up centrally to multiple wells, he said.
Because the ECOS is portable, Kelley said it can be taken to well sites that can’t be connected to gas-collecting pipeline systems.
“We’re doing the same thing they do at the large plants, but Michael has been able to scale everything down to be very efficient,” Kelley said.
As B&A Global takes its first steps into North Dakota’s natural gas market, Bennett said the company is in the early stages of negotiating partnerships with manufacturers and trucking companies throughout North Dakota and the Midwest for the transport of the liquefied gas, assembly and testing of the ECOS system, as well as its field operations.
The next big step, they said, is finding an oil company willing to work with them.
“We need to get the attention of an oil and gas operator that realizes there’s a solution to their flare gas,” Kelley said.