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HomeMy WebLinkAboutEnergy Options for the City of ATQ Energy Options for the City of Atqasuk Prepared for the North Slope Borough October 2008 Prepared by Leland A. Johnson & Associates Northern Economics, Inc. Preparers Team Member Project Role Company Leland Johnson Prime Contractor/ Consulting Engineer Leland A. Johnson and Associates Patrick Burden Project Manager Northern Economics, Inc. Leah Cuyno Economist Northern Economics, Inc. Please cite as: Leland A. Johnson & Associates and Northern Economics Inc. Energy Options for the City of Atqasuk. Prepared for the North Slope Borough. October 2008. Contents Section Page Abbreviations.........................................................................................................................................iii 1 Introduction.............................................................................................................................1 2 Energy Options.........................................................................................................................3 2.1 Improvements to Current Diesel-Based System...................................................................3 2.1.1 Strategies to Improve Efficiency in Power Generation and Distribution Systems...................3 2.1.2 End-Use Conservation ........................................................................................................4 2.1.3 Strategies to Reduce the Cost of Delivered Fuel..................................................................5 2.2 Alternative Sources, Power Generation, and Heating Systems .............................................9 2.2.1 Coal ...................................................................................................................................9 2.2.2 Natural Gas......................................................................................................................10 2.2.3 Liquefied natural gas (LNG) ..............................................................................................11 2.2.4 Compressed natural gas (CNG).........................................................................................11 2.2.5 Coal bed methane (CBM).................................................................................................11 2.2.6 Propane ...........................................................................................................................11 2.2.7 Wind................................................................................................................................12 2.2.8 Geothermal......................................................................................................................12 2.2.9 Nuclear............................................................................................................................13 2.3 Alternative Energy Transfer and Storage Devices ...............................................................13 2.3.1 Electric Transmission Interties ...........................................................................................13 2.3.2 Heat Pumps .....................................................................................................................14 2.3.3 Batteries...........................................................................................................................14 2.4 Alternative Energy Conversion Technologies .....................................................................14 2.4.1 Microturbines...................................................................................................................15 2.4.2 Stirling Engines .................................................................................................................15 2.4.3 Fuel Cells..........................................................................................................................16 3 Preliminary Screening and Recommendations.......................................................................17 4 Evaluation of Recommended Energy Options.........................................................................23 4.1 The Existing Power Generation and Heating System..........................................................23 4.2 Gas Pipeline from Walakpa to Atqasuk for Power and Heating..........................................24 4.2.1 Project Description...........................................................................................................24 4.2.2 Estimated Capital Costs.....................................................................................................25 4.2.3 Estimated Operating and Maintenance (O&M) Costs ........................................................25 4.2.4 Total Annual Costs including Financing.............................................................................25 4.2.5 Total Cost for Energy compared to Status Quo..................................................................26 4.3 Power Transmission System from Barrow to Atqasuk for Power and Electric Heat..............26 4.3.1 Project Description...........................................................................................................26 4.3.2 Estimated Capital Costs.....................................................................................................27 4.3.3 Estimated O&M Costs.......................................................................................................27 4.3.4 Total Annual Costs including Financing.............................................................................28 4.3.5 Total Cost compared to Status Quo ..................................................................................28 i Energy Options for the City of Atqasuk ii 4.4 Power Transmission System from Barrow to Atqasuk for Power and Retaining Diesel Use for Heating.............................................................................................................................28 4.4.1 Project Description...........................................................................................................28 4.4.2 Estimated Capital Costs.....................................................................................................29 4.4.3 Estimated Operating and Maintenance (O&M) Costs.........................................................29 4.4.4 Total Annual Costs including Financing .............................................................................29 4.4.5 Total Cost compared to Status Quo...................................................................................30 4.5 Compressed Natural Gas (CNG) for Power and Heating....................................................30 4.5.1 Project Description...........................................................................................................30 4.5.2 Estimated Capital Costs.....................................................................................................32 4.5.3 Estimated Operating & Maintenance (O&M) Costs............................................................33 4.5.4 Total Annual Costs including Financing .............................................................................33 4.5.5 Total Cost Compared to Status Quo..................................................................................34 4.6 Summary of Financial Analysis ..........................................................................................34 5 Recommendations for Further Analysis..................................................................................37 6 References .............................................................................................................................39 Appendix A: Final Report Presentation Notes.........................................................................................41 Appendix B: Product Specification Brochures ........................................................................................43 Table Page Table 1. Estimated Capital Costs of a Gas Pipeline Project for Power Generation and Heating..........25 Table 2. Estimated Annual Costs for Utility Operations and Maintenance of Facilities.......................25 Table 3. Total Annual Costs for the Gas Pipeline Option ..................................................................26 Table 4. Estimated Capital Costs of the Power Transmission Line Option (Power and Heating) .........27 Table 5. Estimated Annual Costs for Utility Operations and Maintenance of Facilities.......................28 Table 6. Total Annual Costs of the Power Transmission Line Option (Power and Heating) ................28 Table 7. Estimated Capital Costs of the Power Transmission Line Option (Electric Power only) .........29 Table 8. Estimated Annual Costs for Utility Operations and Maintenance of Facilities.......................29 Table 9. Total Annual Costs for the Power Line Option (Electric Power Only)...................................30 Table 10. Monthly Fuel Consumption in Atqasuk, Fiscal Year 2006..................................................32 Table 11. Estimated Capital Costs of the CNG Option......................................................................33 Table 12. Estimated Annual Costs for Utility Operations and Maintenance of Facilities.....................33 Table 13. Total Annual Costs for the CNG option.............................................................................34 Table 14. Comparison of Estimated Annual O&M Costs of Energy Options for the Community of Atqasuk ............................................................................................................................34 Table 15. Estimated Total Annual Costs of the 4 Recommended Energy Options for the City of Atqasuk ............................................................................................................................35 Figure Page Figure 1. Screening Matrix: Preliminary Evaluation of Energy Options for Atqasuk............................18 Figure 2. Location of Exploration Wells in the Atqasuk area..............................................................21 Abbreviations ACSR aluminum cable, steel reinforced ARCO Atlantic Richfield Company ASCG Arctic Slope Consulting Group, Inc. ASRC Arctic Slope Regional Corporation AVEC Alaska Village Electric Cooperative BLM Bureau of Land Management BUECI Barrow Utilities and Electric Cooperative Inc. CBM coal bed methane cf cubic feet CIP Capital Improvement Program CNG compressed natural gas DNR Alaska Department of Natural Resources FY Fiscal year GVEA Golden Valley Electric Association ID inside diameter/dimension kV kilo volt kWh kilowatt-hour LAJA Leland A. Johsnon and Associates LNG Liquefied natural gas mcf thousand cubic feet mmcf million cubic feet NEI Northern Economics, Inc. NSB North Slope Borough O&M operations and maintenance PCE Power Cost Equalization scf standard cubic feet TDX Tanadgusix Corporation ULSD ultra low sulfur diesel WAFG Western Alaska Fuel Group WAVE Western Alaska Village Enterprise iii Energy Options for the City of Atqasuk iv 1 Introduction The North Slope Borough is interested in assessing alternative energy solutions that would reduce reliance on diesel fuel and/or make current power generation systems more efficient. The Borough provides significant subsidies to North Slope communities to ensure that its residents have access to reliable energy. This study was specifically commissioned to focus on energy options for the community of Atqasuk. Atqasuk is located on the Meade River, 60 miles south of Barrow and it has a population of 237 residents (DCCED, 2007). Air travel provides the only year-round access to the community. Atqasuk Power and Light is operated by the North Slope Borough. The cost of providing energy to Atqasuk is primarily driven by the cost of delivered fuel. Atqasuk is challenged in that the community is isolated without roads that lead to the village; fuel is therefore typically flown in from Barrow. In fiscal year 2006, the Borough’s fuel subsidies to the community of Atqasuk for power generation and heating amounted to $1.4 million (NSB, 2007). The study team was specifically tasked to do the following: 1) identify project concepts to be evaluated; 2) gather all related existing reports and documents on selected energy concepts; 3) review, update, and adjust economic analysis on 4 project concepts; 4) evaluate State rural energy plan as it pertains to Atqasuk; 5) compare CATCO fuel delivery cost to Atqasuk vis-à-vis the Borough purchasing and operating a similar overland vehicle; 6) present findings to the Energy Committee in Barrow; 7) select top three concepts for further evaluation; 8) perform detailed analysis of the three selected concepts; 8) present findings in Atqasuk and incorporate public comment in the analysis; and 9) prepare final analysis and report of the selected options. This report discusses the highlights of the analysis of options and the process of evaluation. An exhaustive list of potential energy alternatives was considered. All these options were initially evaluated using a set of screening criteria and several options were presented to the Borough. After receiving feedback from representatives of the North Slope Borough and the City of Atqasuk, a final set of four energy options were evaluated with respect to their technical and financial feasibility. This final set of options was presented to the community of Atqasuk August 28, 2008 (see Appendix A for details). The following section describes various alternative energy concepts that have been identified in previous studies for the City of Atqasuk or other communities in rural Alaska. 1 Energy Options for the City of Atqasuk 2 3 2 Energy Options This section provides a broad set of energy options for the community of Atqasuk, ranging from relatively simple energy conservation measures to more capital-intensive and high technology options. These concepts could reduce the cost and/or improve the reliability of electricity and heating in Atqasuk. Some of these concepts are related to improvements to current diesel-based systems, some are associated with alternative energy sources and technologies, and others are related to end-use energy conservation. These options were evaluated using a set of screening criteria. Based on this initial screening, a selected number of options are recommended for consideration by the Atqasuk Energy Committee and the North Slope Borough. 2.1 Improvements to Current Diesel-Based System Options under this category include strategies that would improve efficiency of the power generation and distribution system, end-use conservation measures that could reduce demand for energy, and strategies that could reduce the cost of delivered fuel. 2.1.1 Strategies to Improve Efficiency in Power Generation and Distribution Systems Improvements to the diesel-fueled generating equipment and transmission networks can increase efficiencies in existing power generation and distribution systems. Options for improving current systems include the following: 2.1.1.1 Match generating equipment to system load 1 Using larger generator sets to satisfy relatively small loads can result in higher fuel consumption if the engine is operated substantially below rated capacity. Using multiple small generator sets in parallel to meet high demand (as opposed to running a single, larger generator set) can also result in poor fuel efficiency and increased engine wear. 2.1.1.2 Improve generation switchgear Improvements to generation switchgear can also lower the cost per kWh of electricity generated and improve system reliability. These improvements include upgrading switchgear with an automated load share and demand system; the addition of real-time economic dispatch, whereby the lowest-cost generators are used as much as possible to meet demand, with more expensive generators brought into production as loads increase; and installing microprocessor-based engine controls that eliminate many of the mechanical linkages on diesel engines, including throttle cables. 1 As noted by Kent Grinage, this strategy can be expensive if the City would have to swap out their large generator for a new smaller generator. This expense can be avoided if the City can find another generator in other NSB communities for a mutually beneficial swap. Energy Options for the City of Atqasuk 2.1.1.3 Reduce distribution system losses Distribution system improvements include installing transformers and conductors with optimal loss characteristics, and increasing the operating voltage of low-voltage distribution systems. In addition, use of microprocessor-based protective relay systems and installation of system capacitors can improve distribution efficiency. 2.1.1.4 Waste heat recovery systems Installation of waste heat recovery systems that capture energy contained in fluids or gases that would otherwise be lost. For example, the thermal energy generated by diesel-fueled power plants that would otherwise pass into the atmosphere as engine exhaust can be recovered and used for heating, absorption cooling, water heating, and industrial processes. The fuel savings made possible through a waste heat recovery system does not necessarily accrue to the heat source—the heat can be transferred to some other facility through a heat distribution system. 2.1.2 End-Use Conservation End-use energy conservation refers to a variety of strategies employed to reduce the demand for energy. For example, demand for electricity can be lowered as a result of more efficient end-use technologies and energy-savings practices. In general, energy conservation reduces the energy consumption and energy demand per capita, and thus offsets the growth in energy supply needed to keep up with population growth. Energy savings through end-use conservation measures can be viewed as a benefit to energy consumers, including the NSB, and to the state (through better load management and reduced PCE expenditures). However, not all utilities recognize lower kilowatt-hour sales as a benefit because lower sales reduce revenues. Consequently, utilities may have no incentive to promote some end-use conservation measures. Options for energy conservation include the following: • Installation of energy-efficient lighting systems in existing and new residences, schools, businesses and government offices. This could include replacing incandescent lights with new fluorescent lights and installing motion sensors. • Upgrades to energy-efficient refrigerator-freezer units, water heaters, televisions, low-flow shower heads and other appliances. • Increased insulation and other weatherization measures in existing and new residences, schools, businesses and government offices. • Educating the public about the benefits of various no-cost energy saving measures such as setting the temperature back on thermostats at night and on weekends, turning out the lights when no one is using the room, delamping in over-lit areas, and reducing the temperature on hot water heaters. A study prepared by Armstrong (2006) for Anaktuvuk Pass found that such end-use conversation measures would have payback periods under three years, and recommended that they be implemented throughout the borough as soon as possible. 4 Energy Options for the City of Atqasuk 2.1.3 Strategies to Reduce the Cost of Delivered Fuel Several strategies for rural Alaska communities have been identified to deal with the increasing prices of fuel: • Using an understanding of fuel markets to promote competition, seek cost-effective pricing with the use of multiple fuel price indexes, and take advantage of seasonal fuel price changes • Making changes in contract or request for proposal language • Evaluating alternative transportation modes for fuel delivery • Replacing the more expensive Diesel No. 1 by using additives or blending fuels • Consolidating fuel purchases to obtain quantity discounts • Construction of a topping plant at Prudhoe Bay or on lands owned by ASRC or several village corporations • Evaluation of inventory costs and fuel delivery costs Following is a description of the different strategies and issues identified. 2.1.3.1 Enhanced understanding of fuel markets With an increased understanding of fuel markets, communities may obtain lower fuel prices with different strategies. By soliciting competitive bids, rural Alaskan communities can promote competition and lower costs. Cooperatives and other organized groups that are consolidating fuel purchases and have larger fuel orders will generally create more interest among potential fuel supply competitors and be more successful in this strategy than smaller entities. Smaller utilities and communities can also use the strategies of requesting multiple fuel price indexes and the best price offer possible from suppliers at the day of loading and of purchasing fuel during seasonal periods of historically low prices, to lower their fuel costs. The effect of the latter strategy might, however, diminish if all communities are purchasing at the same time. Another problem with this strategy is that it is not always possible for rural Alaska communities to take advantage of changes in the market. Many communities need to purchase all their winter fuel during summer months for the barges to be able to deliver the products before winter. (State of Alaska, 2007c). The North Slope Borough has a good understanding of fuel markets and already solicits competitive bids, purchases large orders for all of the communities in the borough, and has taken other steps to reduce costs. Northern Economics, Inc. (NEI) attained a copy of the Western Alaska fuel group (WAFG) request for proposals (see Attached). In November 2006, WAFG requested proposals for supply and delivery of approximately 5,875,000 to 7,340,000 gallons of diesel engine fuel to be used in electrical generation during the period of 2007 and 2008. The request for proposal asked proposers to include a variety of pricing options, including: • Day of Lift Indexed Prices. An indexed price is required in the bid to allow WAFG the choice to have prices adjusted by the price for either Seattle Low Sulfur No. 2 diesel with lubricity, or the Seattle Ultra Low Sulfur No. 2 diesel with lubricity. • Average Indexed Prices. An alternative to day of lift indexed prices is an average indexed price. The average indexed price might be tied to an average of indexed prices for different time periods, including the calendar year, Western Alaska summer delivery season, or any other time period. 5 Energy Options for the City of Atqasuk • Lock-in Indexed Prices. WAFG encourages suppliers to provide indexed prices that give the option to lock-in prices for their fuel purchases before taking delivery of the fuel. The North Slope Borough might consider using some of this language in their future requests for proposals. WAFG used to purchase fuel during the seasonally weak spring month when prices would be low. Those weak price periods, however, are not as reliable as they were since there is very little surplus capacity in global crude oil production at present. 2.1.3.2 Evaluating alternative transportation modes for fuel delivery Fuel cannot be transported to the community of Atqasuk with barges. Fuel used in Atqasuk is usually transported by barge to Barrow and from there flown in to Atqasuk; or flown in from Fairbanks. The Edward Burnell Sr. Memorial Airport in Atqasuk is owned and operated by the North Slope Borough and has a 4,370-foot long by 110-foot wide gravel runway. (State of Alaska, 2007a). NEI’s 2001 study for the Alaska Industrial Development and Export Authority, “Screening report for Alaska Rural Energy Plan”, studied the benefit of lengthening runways in some Alaska communities and concluded that there was a benefit to lengthening the runway from 4,000 feet to 4,500 feet; but further increases up to 5,000 feet did not add any extra cost savings. The incremental cost savings from lengthening the Atqasuk runway is not likely to offset the cost of runway improvements and is not likely to be cost effective. For Atqasuk, fuel transportation costs are more a matter of competition than the length of the runway. Only one company, Everts Air Fuel, bid last year. This year a request for bids was sent to Lynden Transport as well as Everts Air Fuel. Lynden Transport flies L-382 Hercules. These planes can land on the runway in Atqasuk. (Grinage, 2007) Everts Air Fuel provided air transportation of fuel to Atqasuk last year. Fuel was first flown in from Fairbanks, where Everts is based, for a price of $1.939 per gallon; this flight could transport about 4,500 gallons of fuel. After offloading in Atqasuk, the plane then flew to Barrow and began making multiple trips between Barrow and Atqasuk transporting fuel at the cost of $1.578 per gallon. The flight from Barrow to Atqasuk could transport about 4,300 gallons per trip. In fiscal year (FY) 2006, Atqasuk used 481,181 gallons of fuel. According to the North Slope Borough, the actual cost of air transportation to Atqasuk, excluding taxes, was $784,905. The North Slope Borough could consider the use of off-road vehicles like rolligons to transport fuel overland from Barrow to Atqasuk during winter months. This service is available from Crowley Maritime but proved to be unreliable last year as the rolligons were tied up with other tasks and were not able to deliver any fuel to Atqasuk. For the North Slope Borough, purchasing a rolligon for transporting fuel to communities could generate cost savings. Last year Crowley Maritime quoted rolligon transportation from Barrow to Atqasuk for the price of $1.39 per gallon. Transportation of fuel with rolligons would have been the cheapest means of transportation if it were available. If all of the fuel used in FY06 had been transported with rolligons for the price of $1.39 per gallon as mentioned above, transportation costs would have been $668,841. Rolligon transportation, if available, could have saved Atqasuk about $116,064 in fuel transportation cost in FY06. For this year, the Borough was told that Crowley could not deliver fuel to Atqasuk for less than $1.80 per gallon (Grinage, 2007). Rolligons are custom made, and a new rolligon would cost the borough between $1.2 and $2 million (Roles, 2007 and Harland, 2007). The price quoted by Crowley Maritime of $1.39 includes a profit 6 Energy Options for the City of Atqasuk that the Borough would not need to apply. Assuming that the profit margin is 15 percent, a NSB- operated rolligon might be able to deliver the fuel for $568,515. The cost savings per year for fuel transportation to Atqasuk would then be $216,390. If the North Slope Borough purchased a rolligon, more than seven years of rolligon transport savings would be necessary to amortize the cost of the rolligon. However, the rolligon could also be used for other purposes within the borough, thus saving the Borough money in other ways (Grinage, 2007). An alternative to a rolligon is the DJB vehicle. This type of vehicle is also used for tundra travel. Cruz Construction is currently providing transportation services to oil companies in the North Slope during the February to April tundra travel season. According to the company, the DJB vehicle is dependable and less expensive to operate compared to the rolligon. The DJB has a payload capacity of up to 60,000 pounds or up to 10,000 gallons of fuel. The company currently charges $8,000 per day (24 hours) for use of the vehicle. The charge would be lower for a long term contract for transportation services (Miller, 2007). 2.1.3.3 Consolidating fuel purchases to obtain quantity discounts Consolidation of fuel purchases occurs when several entities purchase fuel together. Typically, entities that purchase small volumes of fuel will benefit the most from consolidated fuel purchases. In rural communities, several entities may purchase fuel to meet their own requirements independently of other entities in the same community. With larger fuel orders, the price per gallon will decrease as the cost of delivery decreases. By consolidating the fuel orders in one community, the individual entities may obtain fuel at a lower price. However, most communities are already using these strategies to some degree and therefore opportunities for expanded use of these strategies might be limited. Organizations and cooperatives that consolidate fuel purchases to reduce fuel costs include the following: • AVEC: Alaska Village Electric Cooperative (AVEC) is a non-profit electric utility with the largest service area in the world. The co-operative serves members in and around 52 different Interior and Western Alaska villages. AVEC purchases five million gallons of fuel annually. The fuel is stored in bulk fuel tank farm facilities, many of which are being upgraded or completely rebuilt with money received from the Denali Commission. • Northstar Gas (former WAVE Fuels and Transportation, a subsidiary of Western Alaska Village Enterprise (WAVE).Wave Fuels and Transportation was started in 1996 when eight villages along the Lower Kuskokwim River got together to consolidate fuel purchases to save money on fuel and transportation cost. Through this organization the communities obtained local control of energy sources. After two years the organization was serving 100 customers in 56 villages with almost five million gallons of fuel yearly. Through competitive bidding and volume buying, this organization has lowered fuel prices for its customers. (WAVE, 2007) • Western Alaska Fuel Group (WAFG). WAFG is composed of seven electric utilities, all located in Bristol Bay, Seward Peninsula or Kotzebue Sound, Alaska. The fuel group sent out a request for proposals for purchase and delivery of approximately 5.9 to 7.3 million gallons of diesel engine fuel for use in electrical generation for the period of 2007-2008. (WAFG, 2006) The North Slope Borough also consolidates fuel purchases with the Village Corporations and Eskimos Inc. on annual fuel barge deliveries to Barrow. In FY06, the Borough’s portion of the barge delivery was 3.78 million gallons (excluding fuel orders by the Village Corporations and Eskimos Inc.). The fuel storage capacity in Atqasuk is adequate for the needs of the village for one year. The tank farm facility has a storage capacity of 500,000 gallons and the power plant has storage capacity of 7 Energy Options for the City of Atqasuk 88,400 gallons (NSB, 2007). Given adequate fuel storage capacity, increasing the community’s fuel storage facilities will not generate any cost savings. 2.1.3.4 Construction of a topping plant at Prudhoe Bay or on lands owned by ASRC or several village corporations If other, new discoveries are made on ASRC/village corporation lands, there might be the potential to build a topping plant to meet needs of the NSB and its communities and provide additional fuel for the oil industry. The Borough might wish to support such a concept in discussions with other parties. For example, UIC at Cape Simpson may have an opportunity to explore building a topping plant. The cost estimate of building a topping plant that could serve the communities of Atqasuk, Wainwright, Point Lay, Kaktovik, and Point Hope was investigated for this study. These five communities typically consume about 3.5 million gallons of fuel combined per year. This level of consumption would require a topping plant with a throughput of 300 barrels per day. Chemex, Inc. designs and builds mini-topping plants such as the Val Verde HI-TEC Model 10-30 topping plant. This model is a modularized, highly portable topping plant capable of processing up to 600 barrels per day of a wide range of crude oil and produces naphtha, diesel, and fuel oil. The plant can be set up within several days after arrival at a completed plant site and can be operational within a week of arrival. A price quote was provided by the company given data on geographic location and ambient temperature at the site as well as data on feedstock qualities such as specific gravity, weight percent sulfur, salt content and maximum temperature. The price quoted for the topping plant was $1,975,000 (Chemex Inc, 2008). The cost is for design, supply and fabrication services for a 312 BPD modular crude oil topping plants (ADU) (see Appendix B for more details). Chemex’s modular topping plant will be provided as follows: 1. Provide an Engineering and Design package to include Process Flow Diagrams (PFD), Piping & Instrumentation Diagrams (P&ID), Skid Structural Steel Design, Skid General Arrangement and Piping Plan Drawings, Electrical Single Line Diagram and Wiring Diagrams, Instrumentation Location Diagram and Wiring Diagrams. 2. Procure the equipment and fabricate/assemble the skids. The skids will include the following components: * Pressure Vessels * Pumps * Air Coolers * Shell and Tube Heat Exchangers * Process Heaters * On-skid piping and manual gate, ball and check valves. * Insulation and aluminum jacketing for pipe, vessels and exchangers, as needed. * All equipment skid-mounted on heavy duty steel frame with grating on high traffic areas. * Carbon steel equipment and piping will sand blasted to SP-6 and painted. * Instrumentation installed and wired to a skid-mounted junction box. * Skid electrical installed and wired to a skid-mounted Motor Control Center (MCC) panel. * One year supply of spare parts stored in separate container. 8 Energy Options for the City of Atqasuk 2.1.3.5 Replacing Diesel No. 1 by using additives or blending fuels Diesel No. 2 contains more Btu’s than diesel No. 1, but it does not flow at temperatures below 15°F. For this reason, many Alaska communities use diesel No.1 in the winter months. Diesel No.1 costs more than diesel No. 2, and so some communities blend fuels or use additives with diesel No. 2 to reduce consumption of diesel No. 1. AVEC, for example, typically purchases a pour point depressed (-35°F), high sulfur diesel No. 2 rather than diesel No.1. Additives currently used to reduce the pour point for diesel No. 2 cannot be used with ULSD, so this strategy could only be used for the next few years. 2.2 Alternative Sources, Power Generation, and Heating Systems This section provides summaries and brief analyses of various alternative energy sources and technology options for Atqasuk. As discussed above, diesel is the fuel used to power electrical generators in Atqasuk and most other areas of rural Alaska. However, a wide variety of energy sources can be harnessed to generate electricity. The alternative energy sources described in this section include coal, natural gas, propane, wind, geothermal and nuclear. 2.2.1 Coal Coal is a solid fossil fuel that can be combusted to heat water into steam. The steam is then used to turn a turbine-generator assembly for electricity production. Fluidized bed combustion is a technology used in coal-based power plants. Fluidized beds suspend solid fuels on upward-blowing jets of air during the combustion process. The result is a turbulent mixing of gas and solids. The tumbling action provides more effective chemical reactions and heat transfer. In addition, fluidized bed combustion reduces the amount of sulfur emitted in the form of SOx emissions. Coal-fired electric generating plants are common in the United States. Alaska has abundant coal resources in numerous areas throughout the state, but only a small number of communities have economical access to the resource and the necessary load demands for sufficient economies of scale. Several different mines have operated sporadically in the past in Alaska. At present, the Usibelli Coal Mine in Healy is Alaska's only operating coal mine of significance. Coal from Healy is used at several power generation facilities in the state. Reconnaissance studies on coal development in Chuitna and Point Lay (Deadfall syncline) are currently underway. Several studies have looked at coal as an energy source in the NSB, and one study was done for Atqasuk. The Atqasuk study (Renshaw, 1976) concluded that the nearby Meade River coal deposit would provide decades of coal for use in the community, and could be mined. Communications with Steve Denton, who was the site foreman and project manager at the mine for several seasons of mining indicated that the coal-burning furnaces used in homes in Atqasuk were designed for lump coal and had trouble burning the Meade River coal, which broke down into small particles when it thawed. He suggested that if home heating were still a goal, the NSB consider modern stoker/auger (as opposed to hand-fed) units installed in such a way that several houses could be heated from one boiler to economize on capital costs and the total number of units requiring maintenance. The results from a study conducted by Arctic Slope Technical Services (undated) for the village of Wainwright indicated that a low-pressure water-glycol district heating system using coal-fired boilers would be cost-effective but coal-fired electrical generation was not competitive with traditional diesel 9 Energy Options for the City of Atqasuk generators. High pressure district heating systems were found to be more expensive than low-pressure systems in small villages. Another study looked at the feasibility of converting to coal use in Point Hope and Point Lay (Howard Grey & Associates, 1983) and concluded that residents of both communities would save money if coal were used for home heating, but electrical generation was not feasible. The House Research Agency of the Alaska State Legislature came to similar conclusions in a report prepared in 1982 when they investigated the potential for local coal use in rural Alaska. A study by ASCG (1992) came to the conclusion that coal-fired generation and district heating systems were not economically feasible at the village scale due to the high capital development costs and transportation costs for coal. A more recent study by J.S. Strandberg Consulting Engineers, Inc., in association with Parsons Power Group, Inc., and Northern Economics, Inc. (1997) evaluated the use of small scale fluidized bed combustion technology with low rank Alaska coal to address the energy needs (heating and electricity) of rural Alaska, using McGrath as an example. The technology, while very efficient at large plants, was uneconomic at the village scale. Coal can be an economical source of fuel for power generation if it is accessible. The rules of thumb are: i) for new electrical generating plants, if the price of coal is one-third or less of the alternative fuels, coal is the lowest cost choice; and ii) for new cogeneration applications, if the price of coal is half the cost of alternative fuels, coal is the lowest cost choice. 2.2.2 Natural Gas Natural gas is gaseous fossil fuel consisting primarily of methane but sometimes including significant quantities of ethane, butane, propane, carbon dioxide, nitrogen, helium and hydrogen sulfide. It is found in oil fields and natural gas fields, and in coal deposits (as coal-bed methane). If the natural gas contains these other elements in any quantities, it must undergo extensive processing to remove almost all materials other than methane before it can be used as fuel. Natural gas is abundant in parts of Alaska, especially in the North Slope. Coal-bed methane is also found in various areas throughout the state. However, the locations of producing reservoirs in relationship to markets for the gas have limited the use of natural gas to the more populous areas of Southcentral Alaska. Investments in pipelines and liquefied natural gas (LNG) facilities are typically required to move natural gas from producing regions to consuming regions. Options for natural gas sources for Atqasuk include the gas-producing fields at Alpine, Kuparuk, Prudhoe Bay and Walakpa. In addition, exploration for natural gas in and around Atqasuk could be undertaken. A 1992 study by ASCG for the NSB ranked possible alternatives for reducing energy costs and identified development of local gas resources as the highest ranked alternative. In the event that local gas resources were not found, then an electrical transmission system from Barrow to Atqasuk was recommended (see Section 4.1 Electrical Transmission Interties). A 1996 study by LCMF Inc. concluded that a pipeline from the Walakpa gas field near Barrow was preferred over drilling for conventional gas due to the risk that no gas may be found. The following sub-sections discuss various forms of natural gas or natural gas liquid (propane) that can be considered for power generation in Atqasuk. 10 Energy Options for the City of Atqasuk 2.2.3 Liquefied natural gas (LNG) LNG is natural gas converted to a liquid form by cooling it to minus 259 degrees Fahrenheit (minus 161 degrees Celsius). Since LNG occupies only a fraction (1/600) of the volume of natural gas, it is more economical to transport and store. When natural gas is needed for electricity generation and other industrial uses, the LNG is warmed to a point where it converts back to its gaseous state. This is accomplished using a regasification process involving heat exchangers. LNG facilities include a liquefaction plant to transform the natural gas from a gaseous state to liquid form to be able to transport it via truck, rail, or marine modes, and a re-gasification facility to bring it back to a gaseous state. To limit the amount of LNG that boils off or evaporates, it must be stored in insulated tanks that are built specifically to hold LNG. The capital requirements to set up an LNG system would be significant. 2.2.4 Compressed natural gas (CNG) Compressed natural gas (CNG) is an option that may be suitable for small communities. CNG is natural gas in a compressed form, while LNG is in liquefied form. CNG has a lower cost of production and storage compared to LNG as it does not require an expensive cooling process and cryogenic tanks. CNG requires a much larger volume to store the same mass of natural gas and the use of very high pressures. The cost for CNG tanks adequate to hold a one year supply of CNG could be very expensive. Periodic resupply of CNG could be a key to making this concept feasible. See Section 4 for more details on this option. 2.2.5 Coal bed methane (CBM) Coal bed methane could be associated with the coal resources that are known to exist in the vicinity of Atqasuk. The United States Geological Survey, the Bureau of Land Management, and ASRC are conducting exploratory drilling near Wainwright to assess the potential for coal bed methane resources near that community. Geophysical surveys and exploration drilling would be required to assess the potential for coal bed methane at Atqasuk. Depending on the results of the drilling program in Wainwright, a decision to explore for coal bed methane in Atqasuk could be two years away (ASRC, personal communication, April 3, 2007). The water that is produced with the gas is an issue in Arctic conditions and would likely have to be reinjected into appropriate aquifers. 2.2.6 Propane Propane is a hydrocarbon gas that is not produced for its own sake, but is a by-product of two other processes, natural gas processing and petroleum refining. Most propane is used to make petrochemicals, which are the building blocks for plastics, alcohols, fibers and other materials. Propane is also used as a fuel for heating homes, heating water, cooking and electrical power generation. Propane naturally occurs as a gas at atmospheric pressure but can be liquefied if subjected to moderately increased pressure—it is the major component of liquefied petroleum (LPG). It is stored and transported in its compressed liquid form, but by opening a valve to release propane from a pressurized storage container, it is vaporized into a gas for use. Fuel distributors deliver propane to many villages in rural Alaska, but deliveries are typically made in 20- to 100-gallon canisters rather than in bulk. Propane is available from the oil and gas-producing 11 Energy Options for the City of Atqasuk fields in the North Slope. In extreme cold, propane liquid may be slow to vaporize. Consequently, special blends of propane would be needed for power generation and heating in Atqasuk. A study prepared by PND, Inc. and Northern Economics, Inc. for the Alaska Natural Gas Development Authority (2005) evaluated the use of propane in rural Alaska. The study found that a propane-based system for heating and electric power generation was less expensive than distillate- based systems when a community could be supplied on a regular basis. If a community needed to hold 9 to 12 months of propane in inventory due to transportation constraints, the cost for propane tankage increased substantially and outweighed the fuel cost savings. 2.2.7 Wind The term “wind energy” describes the process by which the wind is used to generate electricity. Wind turbines convert the kinetic energy in the wind into mechanical power that can drive an electric generator. Modern wind turbines fall into two basic groups: a) the horizontal-axis design, like the traditional farm windmills used for pumping water; and b) the vertical-axis design. Modern wind technology takes advantage of advances in materials, engineering, electronics, and aerodynamics. Wind turbines are often grouped together into a single wind power plant, also known as a wind farm, to generate bulk electrical power. Wind turbines are available in a range of sizes, and power ratings. The largest turbines being designed today (5 megawatt) have rotors almost 400 feet in diameter. All electric-generating wind turbines, no matter what size, are made up of a few basic components: the rotor (the part that actually rotates in the wind), the electrical generator, a speed control system, and a tower. Wind speed is a critical feature of wind resources, because the energy in wind is proportional to the cube of the wind speed. In other words, a stronger wind means a lot more power. Even with this constraint, utility-scale wind projects have been built all around the U.S. In Alaska, Kotzebue Electric Association and the community of St. Paul, through the Tanadgusix (TDX) Corporation, have installed hybrid wind-diesel power plants. The Alaska Village Electric Cooperative also has wind turbines installed at Kasigluk and Tooksook Bay. Other installations are planned in Sand Point, Tin City, and Kongiganak. Wind energy is a viable option as it has been proven to work in some Alaskan communities and can be practical for small scale use—even private homes. Developing a system to store excess energy from wind can make the difference in its feasibility. Batteries, fuel cells, or other systems have been investigated. Preliminary studies to assess wind resources and the feasibility of generating wind energy have been conducted in various North Slope communities, including Atqasuk. According to the Atqasuk study, the wind resource is generally favorable for a wind project. The Borough Assemble recently modified the Atqasuk Wind CIP Project to an Area-wide wind assessment program involving installing anemometer towers at potential wind farm sites in six villages, monitoring the weather stations for a year, and performing wind data profiles for each community. 2.2.8 Geothermal Geothermal energy is energy from the heat of the earth’s core—energy that can be tapped at steam vents and hot springs, as well as by other means. This heat can serve as the energy source in an electrical generating plant, just as fuel supplies such as oil and propane serve as the energy source in diesel engines and fuel cells, respectively. Only hot water and natural steam reservoirs are being used today to create large amounts of electricity. 12 Energy Options for the City of Atqasuk Geothermal reservoirs of low- to moderate-temperature water can also provide direct heat for residential, industrial, and commercial uses. For example, geothermal systems have been used to supply heat to homes and offices, commercial greenhouses, fish farms, food processing facilities, and gold mining operations. District systems distribute hydrothermal water from one or more geothermal wells through a series of pipes to several individual houses and buildings, or blocks of buildings. Space heating uses one well per structure. Spent fluids from geothermal electric plants can be subsequently used for these direct use applications in a “cascaded” operation. Geothermal reservoirs have been used to produce electric power for decades, with the more prominent areas of application being California, Nevada, New Zealand, and Iceland. The potential sites in rural Alaska where a geothermal resource is accessible are limited, and there are no commercial installations at this time. However, a geothermal resource near Unalaska in the Aleutian Islands has been investigated as a possible energy source. 2.2.9 Nuclear Nuclear power can be produced commercially through a fission reaction in which heavy elements such as uranium are split into lighter elements with the release of large amounts of energy. Commercial plants in the U.S. produce hot pressurized water from the energy released by fission in the nuclear core contained within a pressure vessel. This water, in turn, transfers heat to water in the secondary water system to cause it to vaporize into steam. All this occurs within a thick concrete containment structure. Outside the containment vessel, the pressurized steam drives a steam turbine coupled to an electrical generator. Control rods in the core are used to moderate the fission reaction. There are no commercial nuclear power plants in Alaska. However, Toshiba and the Central Research Institute of Electric Power Industry of Japan have offered to build a small nuclear reactor in Galena, Alaska, if the town would pay the operating costs. In 2004, the Galena City Council accepted the proposal. If approved by the Nuclear Regulatory Commission, the reactor could be installed by 2012. 2.3 Alternative Energy Transfer and Storage Devices This section describes mechanisms that are not sources of energy themselves, but rather ways to transmit or store energy. The mechanisms discussed include interties, heat pumps and batteries. 2.3.1 Electric Transmission Interties Electric transmission interties are interconnections between electrical utility systems permitting exchange or delivery of power between those systems. As discussed earlier, electric utilities in rural Alaska are, for the most part, electrically isolated from one another, and each utility has its own set of generating units to meet load. Certain efficiencies may be gained, however, by electrically interconnecting one or more utilities. Communities in many parts of Alaska have been connected to neighboring communities with electric transmission interties. Large interties connect major population centers (for example, there are lines that interconnect Anchorage, Fairbanks, and the Kenai Peninsula), and smaller lines connect various villages to each other or to a regional hub (for example, a line connects Bethel with Napakiak). Instead of conventional return current wiring, a single-wire transmission line, which supplies single-phase electrical power and was installed using simple design and construction techniques, is being employed in the Bethel-Napakiak intertie. However, single-wire transmission lines do not meet state electrical codes, and an exemption must be granted in order for 13 Energy Options for the City of Atqasuk them to be used. Direct current transmission is another option, especially for alternative energy sources, such as fuel cells, that produce direct current power. One potential benefit of interties is that they can transfer electricity from a centralized power plant that produces low cost energy, such as a hydroelectric or wind power facility, to high cost areas. Alaska Power and Telephone was successful in doing this with its Black Bear Lake Project when the City of Thorne Bay was interconnected with its system. A study of an electric transmission line between Barrow, Atqasuk, and Wainwright was conducted in 1981 by Jack West Associates. The study concluded that a transmission line was technically and economically feasible at that time. 2.3.2 Heat Pumps A heat pump is a device that uses electricity to move heat from one location to another. During the heating season, heat pumps move heat from the cool outdoors into a warm house; during the cooling season, heat pumps move heat from a cool house into the warm outdoors. Because they move heat rather than generate heat, heat pumps can provide up to four times the amount of energy they consume. The most common type of heat pump is the air-source heat pump, which transfers heat between a building and the outside air. However, the efficiency of most air-source heat pumps as a heat source drops dramatically at low temperatures, generally making them unsuitable for cold climates, although there are systems that can overcome that problem. A ground-coupled heat pump in the heating mode draws heat from the ground. Although they cost more to install due to the need for buried coils, ground-coupled heat pumps have low operating costs because they take advantage of relatively constant ground temperatures. In Atqasuk, heat pump pipes would have to reach the unfrozen ground under the river since it is permafrost elsewhere. 2.3.3 Batteries Energy-storage systems do not produce energy, but they can provide energy at times when other forms of power are not available or need to be conserved. For example, they can be used for storage of cheaply generated base-load electricity to be delivered during peak-load. Another, less common, use is to improve power quality (frequency and voltage). One well-established way of storing electricity is in the form of chemical energy in batteries. A battery system is composed of a set of batteries, charging and inverting equipment, and a primary source of power generation. At times when the batteries are not in use, excess power from the primary source of power generation is converted to direct current for battery charging or maintenance of full charge. When energy from the battery storage system is required, direct current power passes through an inverter, and alternating current power is then supplied into the system. Golden Valley Electric Association (GVEA) in Fairbanks has a battery energy storage system (BESS) that was completed in December 2003 to improve the reliability of service to GVEA members. In the event of a generation or transmission related outage, it can provide 27 megawatts of power for 15 minutes. Fifteen minutes is long enough for the co-op to start up local generation when there are problems with the intertie or power plants in Anchorage. 2.4 Alternative Energy Conversion Technologies This section examines technological developments in the devices that convert other forms of energy into electrical energy—specifically, microturbines, Stirling engines, and fuel cells. 14 Energy Options for the City of Atqasuk 2.4.1 Microturbines Microturbines, or turbogenerators as they are sometimes called, are small combustion turbines (100 kW and smaller) that can be used in a variety of utility and commercial settings. Current designs include natural gas and liquid fuel (diesel)-fired units. The fuel is superheated and burned. Combustion gases power a turbine, spinning the shaft extremely rapidly—up to 100,000 revolutions per minute. This spinning shaft, in turn, powers a high-speed generator, producing electricity. These compact units are being designed to have very few moving parts, in comparison to the many hundreds of parts for reciprocating engines that have generally served the power-generation market. Unlike most of the larger gas turbines used for utility power generation that are custom-made for the application, microturbines are typically mass-produced, “off-the-shelf” items. They have been primarily developed for industrial users that utilize both the electric and heat production. Marathon Oil uses a microturbine at one of its natural gas transmission sites in Kenai. The microturbine is operated with the gas the company is pumping. AVEC, Chugach Electric Association and Kotzebue Electric Association have recently installed natural gas- or diesel-fired units in a number of offices, warehouses and other facilities as part of the Microturbine Demonstration Program initiated by the Cooperative Research Network of the National Rural Electric Cooperative Association and U.S. Department of Energy. Alaska Village Electric Co-operative (AVEC) has evaluated the performance of microturbines and found that diesel-fired microturbines only achieved about 60 percent of the efficiency of traditional diesel engines (Petrie, 2007). The gas-fired units had higher efficiencies and greater reliability, and it was recommended that if coal bed methane or another gas source were available in Atqasuk, then the gas-fired units should be considered. 2.4.2 Stirling Engines The term “Stirling engine” refers to all types of closed-cycle, regenerative gas engines. These engines are powered by the expansion of a gas when heated, followed by the compression of the gas when cooled. They contain a fixed amount of gas (such as hydrogen), which is transferred back and forth between a “cold” and a “hot” end. The “displacer piston” moves the gas between the two ends and the “power piston” changes the internal volume as the gas expands and contracts. The pistons are connected to a rotating shaft which, in turn, powers an electrical generator. Perhaps the greatest value of the Stirling engine is its flexibility of fuel use. Virtually any temperature difference will power the engine. The external heat source can be anything from gasoline to non- combusting sources such as solar energy. Likewise a cold source below the ambient temperature can be used as the temperature difference. A cold source may be the result of a cryogenic fluid or iced water. Stirling Technology Company (Infinia Corporation), a developer of Stirling converters, is examining the feasibility of using indigenous biomass energy sources (e.g., wood products) and a Stirling engine integrated with a low-emissions biomass gasifier to generate power in remote locations such as rural Alaska. Tapping energy from the temperature gradient is technically feasible. The Arctic Foundations has been manufacturing thermosyphon piles and probes which extract heat to maintain permafrost for foundation purposes. These structures have worked well but are expensive relative to the quantity of heat extracted. 15 Energy Options for the City of Atqasuk 16 2.4.3 Fuel Cells Similar to a battery, a fuel cell produces low voltage direct current electricity through chemical reactions. Unlike a conventional battery, however, a fuel cell does not consume materials that are an integral part of its structure but rather acts as a converter. They will continue to produce electric power as long as fuel and an oxidant are supplied. There are several types of fuel cells available at this time, with each type offering specific advantages over others. However, most models in current operation (not experimental) require clean, hydrogen-rich fuel such as natural gas or propane. The hydrogen reacts with oxygen in the atmosphere to produce electricity, and heat and water are the primary by-products. A second strategy is to use excess electrical generating capacity to generate hydrogen from water (electrolysis), and store the hydrogen for future use. This excess electrical power could come either from a renewable source, such as wind generation, or from excess capacity of existing electric generators, using fuel cells in a load-leveling application. For example, excess energy from wind turbines can be stored as gas if a fuel reformer and water electrolyser are added to the system. Chugach Electric Association installed and owns one of the nation’s largest commercial fuel cells as one of the power plants on its system. The 1-megawatt installation supplies power to the U.S. Postal Service’s Anchorage Mail Handling Facility. Chugach Electric Association constructed the facility using five separate 200-kilowatt units, each fueled by natural gas. 3 Preliminary Screening and Recommendations The following criteria were used in the screening analysis in which the alternative energy concepts discussed above were evaluated with the goal of identifying the most promising alternatives for further review and development: 1. Costs, cost savings, and incentives. The different energy options were compared based on the state of knowledge on their capital costs and operating costs. The capital or installation costs considered included the capital costs for land, exploration, and construction and the labor costs. O&M costs include the cost of acquiring energy sources and converting them to electrical energy, cost of upgrades in equipment, and the cost of training utility personnel. Cost-efficient systems that will provide significant cost savings to the North Slope Borough were sought. This criterion also considered available incentives. This primarily refers to the types of grants, low-interest loans, loan guarantees, tax credits, depreciation deductions and other types of federal, state or private financial assistance that exist for a particular proposed energy concept. Incentives also include the technical assistance offered by entities to install and operate a specific energy concept. 2. Expected capacity utilization. The portion of the net capacity that will be used is an important measure in the decision-making process. A technology with relatively high capital costs but comparatively low operating costs (primarily fuel costs) may be the appropriate choice if the capacity is expected to operate continuously (base load). However, a plant type with high operating costs but low capital costs may be the most economical selection to serve the peak load (i.e., the highest demands on the system), which occurs infrequently. Intermediate or cycling load occupies a middle ground between base and peak load and is best served by plants that are cheaper to build than base load plants and cheaper to operate than peak load plants. 3. Energy resource availability. This is the degree to which the supply of an energy-related resource is stable and predictable. For power plants that rely on external fuel sources, this measure is a function of the cost of transporting and storing energy sources as well as other factors. 4. Technical support and local control. A measure of the degree to which the start up and operation of an energy concept would require outside technical support; a high level of local control is ideal. 5. Technology maturity or readiness and production lead time. A measure of the degree to which an energy concept has been proven to work in its final form and under expected conditions. This criterion also considers the expected amount of time for a power plant or other energy concept to come on line. 6. System reliability. A measure of the absence of service interruption to a customer or group of customers and of the degree to which a power supply is free of significant frequency deviations, voltage flicker, and sags and surges. 7. Environmental considerations. These considerations include the degree to which a power generation and distribution system has noise or aesthetic (e.g., visual) impacts or affects air, land, water and wildlife resources. The attached matrix summarizes the results of the screening process (see Figure 1). 17 Energy Options for the City of Atqasuk Figure 1. Screening Matrix: Preliminary Evaluation of Energy Options for Atqasuk OptionsUse Energy SourceCosts/Cost Savings/ IncentivesExpected Capacity UtilizationEnergy Resource AvailabilityTechnical Support/Local ControlTechnology Maturity/Readiness/Prod'n Lead TimeSystem ReliabilityEnvironmental ConsiderationsTALLYAlternative Power Generation and Heating SystemsWind-Diesel System/ with Batteries/Flywheelselectricity wind+diesel0+00 + 0 + 3Natural Gas-based System w/ pipeline from Walakpa to Atqasukelectricity + heatingnatural gas-+++ + ++5Natural Gas-based System using Compressed Natural Gas (CNG)electricity + heatingnatural gas-+++ + ++5Natural Gas-bases System using Liquiefied Natural Gas (LNG) electricity + heatingnatural gas-++- + ++3Natural Gas-based System using Coal-bed Methane electricity + heatingnatural gas++-+ - ++3Propane-based Systemheating &/or electricitynatural gas liquid/ propane-+-+ + ++3Electrical Transmission Systemfrom Barrow (power line)electricity + heatingnatural gas-+++ + ++5Coal-Fired Electric Generation/Small Scale Fluidized-bed Combustionelectricity Meade River coal--+- - + - -3Stoker/Auger Unit(1 boiler could heat several homes)heating Meade River coal++++ + + - 5Coal-fired boilers(low pressure water-glycol)district heatingMeade River coal+0+0 + + - 3Geothermal-based Electrical Generating Plantelectricity geothermal---- 0 / ++ +-1.5Geothermal-based district systems (hydro-thermal water)direct heat geothermal0+--0 / +++1.5Nuclear Power Plantelectricity uranium--0--0 / -0-4.5Microturbines/Turbogenerators electricity diesel/propane++0- - 0 + 1Stirling Engineelectricityany/ temperature differential-++- - - 0 -2Fuel Cellselectricitynatural gas or propane-+0- + ++2Heat Pump (air-source)heatingtemperature differential++- - + - + 1Heat Pump (ground-coupled) heatingtemperature differential0+0- + ++3Waste Heat System Upgrades/ Expanded Usediesel+++ + ++6Diesel Generators(with improvements)electricity diesel++++ + + + 7End Use Conservation Measures+++ ++ 5Adopt Fuel Pricing StrategiesdieselNot effective with transition to ultra low sulfur dieselStrategies/Practices to Improve Current SystemAlternative Energy Conversion Systems18 Energy Options for the City of Atqasuk The first column lists the 24 energy concepts considered. The energy options include a number of improvements and upgrades to the existing diesel-based power generation system, end use conservation measures, wind-diesel hybrid systems, various natural gas-based, coal-based, nuclear, and geothermal-based energy systems, as well as several alternative energy conversion systems. The second column indicates the use-- whether the option is for heating or electricity, and the third column identifies the energy source (i.e. diesel, wind, natural gas, natural gas liquid, Meade River coal, geothermal, nuclear). The next seven columns are the screening criteria. For this screening process, we relied on the background information and descriptions of technologies based on our research of existing literature, previous studies conducted for the North Slope Borough and other entities in Alaska, and our prior research and experience. A plus (+) was given to options that were deemed as potential improvements to the status quo (the current diesel-based power generation system) or considered generally acceptable or up to conventional standards. A negative (-) was given to options that would not represent an improvement to the status quo or were deemed “negative” with respect to a particular criterion. A zero (0) denotes a neutral score—neither positive nor negative with respect to the criterion. Given that the objective of this screening process is to select a few of the most promising alternatives that will be subject to a more detailed evaluation, this tally of pluses and minuses allowed us to do the screening without being caught up with numerical weights and rankings. This process identified the top options that are deemed to be potentially feasible and acceptable given the seven criteria; which will be further evaluated given the same criteria but with more research and in-depth evaluation. Note that several of the natural-gas based systems scored a negative on the cost criterion. This is because of the capital cost of storage units that will be required for this type of fuel. The purchase of a rolligon to transport these fuels, which may also be used for other communities, may be able to help reduce the capital and operating costs associated with these systems. Based on the preliminary screening matrix, the following options were selected to be presented during a meeting with North Slope Borough officials and representatives from the City of Atqsuk. • Efficiency improvements to the current electric generation system, including waste heat recovery upgrades and expanded use of waste heat and End use conservation measures designed to affect demand for power • A natural gas-based system with a pipeline from Walakpa to Atqasuk • The “low-tech” natural-gas based systems involving compressed natural gas • “Low-tech” coal-based heating system involving a stoker/auger unit (with several boilers for the community, but each boiler heating several homes) • Electrical transmission system from Barrow After deliberations in Barrow, 4 options were selected to be further reviewed: 1) a gas pipeline from Walakpa to Atqasuk; 2) an electrical transmission line from Barrow to Atqasuk for power and heating; 3) an electrical transmission line from Barrow to Atqasuk for power only and retaining diesel for heat; and 4) a compressed natural gas (CNG) delivery from Walakpa to Atqasuk. It should be noted that waste heat systems, diesel genset improvements, and end-use conservation strategies ranked high in the evaluation as shown in the screening matrix. These options are affordable, reliable, and effective solutions or strategies that can be implemented immediately. In fact, to some extent, these options are already being implemented in Atqasuk and other communities. 19 Energy Options for the City of Atqasuk For the purpose of this study, efforts were focused on evaluating a new source of energy that would be sustainable and reliable, with a goal of lower costs at present and in the future. During the meeting in Barrow, the issue about the availability of natural gas in and around Atqasuk was also brought up. A representative from the City of Atqasuk mentioned that there may be gas wells about 9-10 miles west of Atqasuk. Further research was conducted on the status of these local gas wells. There have been a few exploratory wells drilled in the area as part of the NPRA exploration efforts decades ago. Figure 2 shows the location of the wells drilled in the Atqasuk area. A study on North Slope Borough Energy Assessment (ASCG Inc., 1992) noted the following “Atqasuk area shows moderate to poor coalbed methane potential, and moderate to good sandstone methane potential. Normally, a reservoir at 1800 feet would be too cold to produce, but the Meade River area may contain anomalously thin permafrost.” In addition, information from historical documents indicates the following: ƒ Exploration in the NPRA includes the Atqasuk region; South Meade No. 1 (16.5 miles NE of Atqasuk), Meade No. 1 (29.7 miles S of Atqasuk), Topagruk No. 1 (38.5 miles NE of Atqasuk), and Kugrua and Kaolak (NW of Atqasuk) (Schindler, 1983)., The US Geological Survey drilled all wells, except South Meade and Kugrua that were drilled by the U.S. Navy (Williams, 1983). ƒ The South Meade Test Well No. 1 was drilled down to 3,031 m (Williams, 1983). Several minor gas shows were observed from different zones, none of which were considered to be of commercial significance. The well was plugged and abandoned, and the rig was released on January 22, 1979. (Schindler, 1983) ƒ The Meade No. 1 was drilled 1,660 m deep (Williams, 1983). Besides some gas associated with the coal beds, only a few weak shows of oil and gas were found. (Collins, 1958) ƒ Topagruk No. 1 was drilled down to 3,202 m and was nearly dry, except for a small show of oil and a small show of gas. (Williams, 1983) ƒ Kugrua Test Well No. 1 was drilled 3,858 m deep and was found dry. ƒ Kaolak Test Well No. 1 is located in the western part of the Naval Petroleum Reserve No.4. The test well was drilled down more than 2000 m, where operations were suspended. There was only faint shows of oil and the sandstone beds penetrated were impermeable and appeared to be water bearing. (Collins, 1958) The gas potential near Atqasuk does not appear to be promising. At any rate future exploration and development efforts would require significant time and money. Hence, this option is not considered or evaluated further in this study. The following section provides an evaluation of the top four energy options that are being recommended for consideration in Atqasuk. 20 Energy Options for the City of Atqasuk Figure 2. Location of Exploration Wells in the Atqasuk area Source: Division of Oil and Gas, Department of Natural Resources 21 Energy Options for the City of Atqasuk 22 4 Evaluation of Recommended Energy Options This section presents a more detailed evaluation of the four recommended energy options for the community of Atqasuk. Conceptual level estimates of capital costs as well as operating and maintenance costs are discussed. The analysis in this section also considers five financing scenarios with varying amounts of equity contribution, and an annual contribution to a sinking fund to cover future replacement costs. Finally, the four recommended options are compared to the existing power generation and heating system with respect to the various options’ fuel and non-fuel costs. The following subsection describes the existing power generation and heating system in the community. 4.1 The Existing Power Generation and Heating System The village power plant has five diesel generators with the following capacity: • Two 450-kilowatt generators • One 580-kilowatt generator • Two 910-kilowatt generators The average daily demand or load on the system is 450 kilowatts. The peak load is about 13 percent higher than the average load. The current power generation capacity is more than sufficient to meet the average and peak loads of the community. In 2006, the power plant generated 3,394,851 kWh of electricity (NSB, 2007) using 239,593 gallons of diesel fuel. The utility provided power to 57 residential customers, 2 community facilities, 41 commercial customers, and 1 federal entity. The utility also had 17 unbilled customers which included the elderly (up to 600 kW per month) and provided power to street lights and the power plant. The cost of providing energy to the community is primarily driven by the cost of delivered fuel. Fuel costs account for about 67 percent of the total operating costs of the utility. The City of Atqasuk is challenged in that the community is isolated without waterways or roads that lead to the village; the cost of fuel delivery is therefore also relatively high. Fuel is currently flown into the community from Barrow. In FY 2006, the landed price of diesel fuel was $4.21 per gallon, costing the Borough over $1 million in fuel expenses for the power plant. The revenues that year amounted to $951,302 and the Borough subsidy amounted to $1,437,259. The heating equipment is typically boiler based hydronic or forced air in each residential and non- residential building. In FY 2006, the residential customers consumed 69,494 gallons of fuel for heating. The price of heating fuel was $4.21 per gallon. The cost for residential home heating amounted to $292,569. This is also the subsidy cost. Delivery of the fuel from the tank farm to the home is charged to the customer at $1.40 per gallon and is provided by the Borough through its operating budget above the delivered price of $4.21. Hence, the total price for fuel delivered to the home was $5.61 per gallon. Currently, power generation and heating in the community cost a total of $2,388,813 to operate and maintain. The fuel costs amount to $1,365,234 and the non-fuel costs amount to $1,023,579. 23 Energy Options for the City of Atqasuk Although the NSB wants to reduce the cost of heating and power generation, the incentive to continue operating these diesel-based systems is significant for a number of reasons, including the following: • Large installed base of diesel power plants • Considerable diesel operating experience • Existing fuel and service infrastructure • Relatively low capital cost compared to some other technologies • Proven technology in the Arctic Even if new generating and heating technologies are introduced to the community, it may be necessary to retain the existing systems for backup in case of emergencies. The following subsections discuss four alternative energy options for the Borough and the City’s consideration. 4.2 Gas Pipeline from Walakpa to Atqasuk for Power and Heating 4.2.1 Project Description The newest natural gas field in the Barrow area and the closest one to Atqasuk is at Walakpa. This resource is located 56 miles from Atqasuk and 14 miles from Barrow. The project would involve the construction of a 3-inch inside diameter (ID) buried pipeline over the 56-mile distance from Walakpa to Atqasuk. In the village, smaller distribution pipelines would be installed underground to the power plant and every heated building in town. Inasmuch as the power plant and heating systems in Atqasuk are all diesel fired, equipment conversions would be required. In the case of the power plant, it is possible to convert diesel engines to use gas. It is more likely however that the best solution would be to install new gas-fired turbine generators. Power distribution in the village would remain unchanged. All residential buildings would require new gas-fueled heating equipment as diesel-fired boilers and furnaces are not good candidates for conversion. The non-residential larger buildings must have the boilers or furnaces replaced, but the internal heating systems would likely be usable. The 13-mile natural gas pipeline serving Nuiqsut is the most comparable project to the one contemplated for Atqasuk. It is a 3.0-inch (ID) pipeline originating from Conoco-Phillips’ Alpine field that was installed in 1991 by ARCO. It is a continuous coil tube line buried about 5 feet underground for 4.8 miles and supported on 8.2 miles of VSMs that were previously in place. Gas conditioning was provided by ARCO at the source. Pressure reduction equipment was required in Nuiqsut as was the village distribution system. Building hookups have not been completed, so the historical costs for this work can only be estimated. Dave Hodges (NSB CPIM) provided cost data from the Nuiqsut project. The buried pipeline was the significant cost at $2,573,000 for 4.8 miles. The Nuiqsut pipeline and associated costs were converted to unit costs and adjusted for inflation and applied to the Atqasuk gas pipeline scenario. 24 Energy Options for the City of Atqasuk 4.2.2 Estimated Capital Costs The gas pipeline option is estimated to cost approximately $43.7 million. Table 1 shows the estimated costs for each of the project components. The pipeline cost estimate assumed a 56-mile pipeline from the Walakpa gas field to Atqasuk, and the number of hookups assumed to be required at the village is 50. Table 1. Estimated Capital Costs of a Gas Pipeline Project for Power Generation and Heating Cost Component Amount Gas Transmission Line $35,326,319 Source Processing Facilities $4,707,299 Destination Processing $1,412,190 Village Distribution $633,384 Village Hookups $588,412 Power Plant Modifications $1,0501,736 Total: $43,718,340 Source: LAJA estimates 4.2.3 Estimated Operating and Maintenance (O&M) Costs This option is estimated to cost approximately $1.4 million for the annual operations of the utility and for the maintenance of all the facilities. Table 2 shows the annual fuel and non-fuel costs for generating village power and heating. Table 2. Estimated Annual Costs for Utility Operations and Maintenance of Facilities Cost Component Amount Fuel Costs Power $30,356 Heating $10,700 Sub-total: $41,056 Non-Fuel Costs Power $826,579 Heating $105,000 Pipeline and Distribution O&M $450,000 Sub-total: $1,381,579 Total: $1,422,635 Source: LAJA and Northern Economics, Inc. estimates 4.2.4 Total Annual Costs including Financing As shown in Table 3, the gas pipeline option is estimated to cost the Borough $5.2 million per year in O&M and annual financing costs. This analysis assumes that the capital costs will be financed through bonds. The calculation for the annual financing cost assumes a 5 percent interest rate on the annual bond coupon payments plus annual deposits to a reserve fund (earning 3 percent interest) to cover the debt at the end of the 20-year term. 25 Energy Options for the City of Atqasuk Table 3. Total Annual Costs for the Gas Pipeline Option Item Amount Financing Cost $3,812,926 Operating and Maintenance Cost $1,422,635 Total: $5,235,561 Source: LAJA and Northern Economics estimates 4.2.5 Total Cost for Energy compared to Status Quo The existing system using diesel for power generation and heating has an annual total cost of $2.4 million. Considering the analysis above, this gas pipeline option is shown to have a higher annual cost compared to the existing system. The annual operating and maintenance cost of this project is however estimated to be lower than the existing system by about $1 million. 4.3 Power Transmission System from Barrow to Atqasuk for Power and Electric Heat 4.3.1 Project Description An overhead power line would be installed from the BUECI power plant in Barrow to Atqasuk. The distance is estimated to be 70 miles. There is unused power available at the BUECI power plant so there is no apparent need for additional generators. The power line is envisioned as being 26 KV, three phase. The support poles would be wood spaced at 250’ or less to reduce the potential for wind damage due to lines making contact. The insulator and line spacing arrangement also requires special attention to mitigate wind damage and provide bird protection. In this scenario, power from the transmission line would be used to provide power and heat to the community. The existing diesel oil fired boilers and furnaces in buildings would be replaced by electric heat. Residential buildings would probably have base-board heaters in each room. In the larger non-residential buildings (i.e., school), the central heating boiler or furnace may be converted or replaced with an electric unit. The existing heat distribution system may be usable in these cases. The existing electric distribution system would likely need upgrading to handle the higher voltage or current levels. Individual buildings would also need higher amperage service panels to handle the considerable load caused by the electric heating. The most recent comparable cost data is an AVEC 24-mile tie line installation (12.5/25 KV 3 phase on 250' pole spacing) from Toksook Bay to Tununak and a branch to Nightmute. AVEC Chief Engineer Mark Tietzel, provided information on this intertie. The first 7 miles cost $288,000 per mile but had piling driven under each pole. It would have cost much less if the poles could have been directly set in the soil. The current construction (17 mi leg) is running $341,000 per mile. Again, much requires driven piling. The main reason for the higher cost is the time lost in getting crews to the job site. The hardware costs (line, insulators, etc) are judged by AVEC to be a minor cost. The above costs include permitting, engineering and bird mitigation features. This project is being performed by STG Drilling on a time and expense contract. Jim St. George (STG’ General Manager) has done several projects on the North Slope and is of the opinion that an overhead power line would be much simpler to construct due to the superior permafrost conditions that would allow direct placement of the poles into 8-10’ deep oversized 26 Energy Options for the City of Atqasuk drilled holes. The extra step of driving piles would not be required and costs would be lower. The longer length of the Atqasuk line would be mitigated by using a “traveling construction camp”. STG estimates the cost at $150,000 per mile in relatively open terrain and minimal river crossings. This cost does not contemplate permitting, engineering and owner administrative costs. United Utilities has done a lot of recent overhead line work in Yukon-Kuskokwim "warm permafrost" and encountered the same issues as AVEC in that the foundations involved driven piles with poles strapped to the driven piles. This connection failed under high winds. Their lines also include a costly permanent access trail. Total costs have run about $500,000 per mile. Eric Worthington, Estimating Manager for Norcon Inc. (an experienced North Slope contractor) expressed the opinion that overhead power line cost depends on height of poles, span length, operating voltage, number of angles and whether it is new construction or involves a lot of “Hot” work. Another large factor are the devices, i.e. transformers or switches. However, assuming that there are 20 poles a mile for 25kV construction on 50 foot poles with #2 ACSR without a lot of hot work or angles and use NSB equipment, it will probably be about $175,000 a mile. Mr. Worthington indicated that underground has a lot of the same issues except the frozen winter conditions cause more impact. It would cost about $350,000 for 15kV #2 aluminum concentric with XLP in 2” HDPE and few river crossings in summer; $500,000 in winter. In summary, a reasonable estimating cost is $200,000 per mile for an overhead power line connecting Barrow to Atqasuk. This includes a contingency for non-construction costs such as permitting and engineering. 4.3.2 Estimated Capital Costs This option is estimated to cost $14.35 million. This estimate includes the power transmission line as described in the previous section, a substation, and the necessary village hookups. Table 4 shows the cost breakdown for this option. Table 4. Estimated Capital Costs of the Power Transmission Line Option (Power and Heating) Cost Component Amount Power Transmission Line $14,000,000 Village Hookups $300,000 Substation $50,000 Total $14,350,000 Source: LAJA estimates 4.3.3 Estimated O&M Costs This option is estimated to cost approximately $914,500 for the annual operations of the utility and for the maintenance of all the facilities. Table 5 shows the breakdown of fuel and non-fuel costs including maintenance costs for the pipeline and the distribution line. 27 Energy Options for the City of Atqasuk Table 5. Estimated Annual Costs for Utility Operations and Maintenance of Facilities Cost Component Amount Fuel Costs Power $339,485 Heating $334,999 Sub-total: $674,484 Non-Fuel Costs Power $140,000 Heating $-- Pipeline and Distribution O&M $100,000 Sub-total: $240,000 Total: $914,484 Source: LAJA and Northern Economics, Inc. estimates 4.3.4 Total Annual Costs including Financing As shown in Table 6, the power transmission line to serve both power and heating needs of Atqasuk is estimated to cost the Borough approximately $2.16 million per year in O&M and annual financing costs. This analysis assumes that the capital costs will be financed through bonds. The calculation for the annual financing cost assumes a 5 percent interest rate on the annual bond coupon payments plus annual deposits to a reserve fund (earning 3 percent interest) to cover the debt at the end of the 20- year term. Table 6. Total Annual Costs of the Power Transmission Line Option (Power and Heating) Item Amount Financing Cost $1,251,500 Operating and Maintenance Cost $914,500 Total: $2,165,984 Source: LAJA and Northern Economics estimates 4.3.5 Total Cost compared to Status Quo The existing system using diesel for power generation and heating has an annual total cost of $2.4 million. Considering the analysis above, this option is estimated to have lower annual costs compared to the existing system. 4.4 Power Transmission System from Barrow to Atqasuk for Power and Retaining Diesel Use for Heating 4.4.1 Project Description An overhead power line would be the same as that described in the previous section (Section 4.3). 28 Energy Options for the City of Atqasuk In this scenario, however, power from the transmission line would be used to replace only the function of the present diesel fired power plant. Heating would continue to be diesel fueled thereby eliminating any changes to the community power and fuel distribution system. 4.4.2 Estimated Capital Costs The estimated capital cost for this option amounts to $14.35 million. This includes the cost of the power transmission line and a substation. As noted above, there will be no additional costs for the distribution system. Table 7. Estimated Capital Costs of the Power Transmission Line Option (Electric Power only) Cost Component Amount Power Transmission Line $14,000,000 Substation $50,000 Total $14,350,000 Source: LAJA estimates 4.4.3 Estimated Operating and Maintenance (O&M) Costs This option is estimated to cost approximately $1.2 million for the annual operations of the utility and for the maintenance of all the facilities. Table 8 shows the fuel and non-fuel costs associated with this option. Table 8. Estimated Annual Costs for Utility Operations and Maintenance of Facilities Cost Component Amount Fuel Costs Power $334,999 Heating $355,805 Sub-total: $690,804 Non-Fuel Costs Power $105,000 Heating $305,000 Pipeline and Distribution O&M $100,000 Sub-total: $510,000 Total: $1,200,804 Source: LAJA and Northern Economics, Inc. estimates 4.4.4 Total Annual Costs including Financing As shown in Table 9, this option is estimated to cost the Borough approximately $2.43 million per year in O&M and annual financing costs. This analysis assumes that the capital costs will be financed through bonds. The calculation for the annual financing cost assumes a 5 percent interest rate on the annual bond coupon payments plus annual deposits to a reserve fund (earning 3 percent interest) to cover the debt at the end of the 20-year term. 29 Energy Options for the City of Atqasuk Table 9. Total Annual Costs for the Power Line Option (Electric Power Only) Item Amount Financing Cost $1,225,400 Operating and Maintenance Cost $1,200,800 Total: $2,426,200 Source: LAJA and Northern Economics estimates 4.4.5 Total Cost compared to Status Quo The existing system using diesel for power generation and heating has an annual total cost of $2.4 million. As presented above, this option is estimated to have significantly less annual O&M costs but with the annual financing costs, this option would cost the Borough about $40,000 more in annual expenses. 4.5 Compressed Natural Gas (CNG) for Power and Heating 4.5.1 Project Description This option would involve using natural gas as fuel for power generation and heating. The CNG option is an alternative to transporting natural gas through pipelines. CNG is natural gas that has been compressed for transportation in pressurized containers. This option would capitalize on the natural gas available at the Walakpa gas field and/or the South Barrow gas field and transporting the natural gas as CNG from Barrow to Atqasuk using ultra low impact vehicles (also known as rolligons or CATCO units). The following describes the major equipment and facility requirements for this option: Compression System The CNG project would require a compression system at the gas field. The cost of compression can vary widely depending on the type of prime mover (or engine) and the required horsepower to compress the gas. To determine the appropriate size or horsepower, the following information is needed: site suction pressure, gas pressure, elevation at the field, specific gravity of the gas, the required discharge pressure and flow capacity. Specific information for the Walakpa gas field and South Barrow gas field were provided by Petrotechnical Resources Alaska (Stokes, 2007). The cost estimate for the compression system was obtained from Cameron. Compression units were sized to pump up to 3,000 psi discharge at the inlet pressure indicated for Walakpa and the South Barrow gas fields. For Walakpa gas, a system with a 182-horsepower compressor would cost $325,000 for an electric motor or $435,000 for an engine-drive. For South Barrow gas, a system with a 77-horsepower compressor would cost $290,000 for an electric motor and $385,000 for engine drive. The system package includes the compressor with gas cooler, pulse bottles, scrubbers-skid mounted unit-panel for shutdowns on skid piping between stages (see Appendix B for more details on compression system specifications). CNG Transport Modules The compressed natural gas would need to be stored and transported in high pressure vessels. Dynetek Industries based in Calgary, Alberta has specialized in fuel storage systems for CNG and has 30 Energy Options for the City of Atqasuk developed cylinders called DyneCell, made from a seamless thin wall aluminum liner covered with a full carbon fiber overwrap. DyneCell cylinders are extremely light weight, non-permeable, and exhibit limited expansion under pressure and temperature change. The BT-10 module is a transport module that contains 39 cylinders capable of storing 100,000 standard cubic feet of CNG. The BT-10 module weighs about 12,200 pounds (see Appendix B for more details). These transport modules have been used in Canada to supply CNG to natural gas refueling stations, transport natural gas from remote locations or stranded natural gas reserves, provide a temporary supply of natural gas to pipelines undergoing maintenance, and service customers not connected to existing natural gas distribution systems. The ballpark cost estimate per module (BT-10 module) is $220,000 (Andre Bartsch, Dynetek, personal communication with Northern Economics, December 2007). Ground Transportation: Low Impact All Terrain Vehicles Access across the tundra during both the summer and winter is allowed by the use of vehicles that utilize low pressure, pneumatically inflated flexible rubber bags, instead of tires. CATCO (Crowley All Terrain Corporation) units are typically used across the tundra to carry heavy loads required for oil and gas exploration and development activities but CATCO units are also used for logistics support to remote villages—“CATCO’s deliver fuel oil equipment and other supplies such as building materials, to isolated communities” (Crowley, 2007). The CATCO RD-105 is capable of carrying 85,000 pounds of load with cargo deck dimensions of 16 ft. wide and 20 ft long. The estimated cost of a CATCO unit is about $2 million (Harland, 2008). Stationary Storage for CNG in Atqasuk CNG can be stored in cylinders contained in ISO containers (20’ containers). An ISO container can hold 60 DyneCell cylinders and store 198,000 standard cubic feet of natural gas. Each module is estimated to cost $288,000 (U.S. dollars) or about $1.44 million per MMCF of gas capacity. Logistics The logistics of this option hinges on the storage capacity and transportation limitations in the North Slope. The major factors that need to be considered include: 1) duration of the tundra travel season; 2) weight restrictions on vehicles traveling over the tundra; 3) size and weight of the CNG cylinders and transport modules; 4) fuel requirements of the community during the summer when tundra travel is restricted; and 5) environmental and permitting issues including establishing a right-of-way if the Borough decides to purchase a rolligon. About 324,000 gallons of diesel fuel were used for power and heating in Atqasuk in FY2006. The volume of gas required to produce this same amount of energy in terms of British Thermal Units or BTUs is about 43.7 million cubic feet (mmcf) of natural gas. Table 10 shows the current fuel requirements for power generation and heating in Atqasuk. The monthly data on fuel requirements are used to determine CNG storage capacity and the number of CATCO unit deliveries per month that will meet the community’s fuel requirements. One CATCO unit delivery could haul 700,000 standard cubic feet of natural gas; given the CATCO RD-105 and the BT-10 transport module specifications. On average, one delivery would last 8.5 days during the summer months and 4 days during the winter months. Given the community’s monthly fuel requirements, at least 4 deliveries per month are required during the summer and about 8 deliveries per month during the winter months. However, there are restrictions on tundra travel both during the winter season and the summer time. The route from the Walakapa gas field to Atqasuk would traverse federal lands that are under the jurisdiction of the Bureau of Land Management (BLM). BLM does not allow any tundra travel during 31 Energy Options for the City of Atqasuk 32 summer months 2 (Worley, 2007). Winter tundra travel is allowed; and the rules permit heavy loads and multiple trips for an established route with an approved right-of-way. CATCO already has a right- of-way in the area and their low impact vehicles have been permitted for tundra travel. If the Borough decides to purchase its own rolligon dedicated to hauling CNG from Walakpa to Atqasuk, the Borough would need to get a right-of-way from BLM and the necessary environmental and safety permits from other agencies such as the Federal Highway Administration or the Alaska Department of Transportation and Public Facilities (Worley, 2007). Given that summer tundra travel is restricted on BLM lands, it is therefore recommended that the CNG storage units be designed to have enough capacity to hold 17.5 mmcf of natural gas; this volume will cover gas needs for power generation from June to November and gas needs for heating for the month of November. As noted above, the estimated cost per MMCF of CNG stationary storage is $1.44 million, therefore, a storage facility of this size would cost about $25 million. Historically, winter tundra travel covers the months of December through May, although the actual opening and closing dates vary from year to year (DNR, 2007). A total of 63 CATCO deliveries would have be done to supply both winter and summer needs of the community. Table 10. Monthly Fuel Consumption in Atqasuk, Fiscal Year 2006 Month Diesel Use (Gallons) BTU-Equivalent Gas Equivalent in Cubic Feet (CF) Power Generation July 16,393 2,278,627,000 2,210,113 August 15,635 2,173,265,000 2,107,919 September 22,504 3,128,056,000 3,034,002 October 19,986 2,778,054,000 2,694,524 November 23,041 3,202,699,000 3,106,401 December 21,245 2,953,055,000 2,864,263 January 20,515 2,851,585,000 2,765,844 February 24,641 3,425,099,000 3,322,113 March 20,668 2,872,852,000 2,786,471 April 19,374 2,692,986,000 2,612,014 May 17,857 2,482,123,000 2,407,491 June 17,734 2,465,026,000 2,390,908 Total: 239,593 33,303,427,000 32,302,063 Heating Total Annual 84,452 11,738,828,000 11,385,866 Total Power +Heating 324,045 45,042,255,000 43,687,929 Source: Diesel use data were obtained from the Fuel Division, North Slope Borough. 4.5.2 Estimated Capital Costs The CNG option is estimated to cost about $31.36 million for all the system and facility requirements. Table 11 shows the cost breakdown per item. The estimated costs for the village distribution and 2 For state lands, there are low impact vehicles that are permitted for summer tundra travel, but with restrictions on weight, the number of trips allowed on a particular route, and whether there are sensitive wet areas or river crossings (Lynch, 2007). Energy Options for the City of Atqasuk hookups, and the power plant modifications are the same as the gas pipeline option since both options would require the same system for system operation, power distribution, and village hookups. Table 11. Estimated Capital Costs of the CNG Option Cost Component Amount Low Impact All Terrain Vehicle (i.e., rolligon or CATCO) $2,000,000 BT-10 Transport Modules for CNG $1,540,000 Stationary storage for CNG $25,115,800 Compression System $435,000 Village Distribution $633,400 Village Hookups $588,400 Power Plant Modifications $1,050,700 Total: $31,363,300 Sources: LAJA and NEI estimate based on information provided by the following: 1) Rolligon-- from Crowley Marine Services. (Harland, 2007); 2) BT-10 Transport Modules and stationary storage-- from Dynetek Industries (Bartsch, 2007); 3) Compression system cost estimate-- from Cameron Compression Inc. (Sandberg, 2007). 4.5.3 Estimated Operating & Maintenance (O&M) Costs The fuel and non-fuel costs of this option would approximate the fuel and non-fuel costs associated with the gas pipeline option. In addition, this option would incur additional operating costs for the rolligon, compression system, and storage unit upkeep, and fuel for the vehicle and the compressor. The total estimated O&M costs for this option amount to about $1.46 million. Table 12. Estimated Annual Costs for Utility Operations and Maintenance of Facilities Cost Component Amount Fuel Costs Power $30,356 Heating $10,700 Transportation (CATCO fuel) $20,200 Sub-total: $61,256 Non-Fuel Costs Power $826,579 Heating $105,000 Storage and Compression System O&M $470,000 Sub-total: $1,401,579 Total: $1,462,835 Source: LAJA and Northern Economics, Inc. estimates 4.5.4 Total Annual Costs including Financing As shown in Table 13, this option is estimated to cost the Borough approximately $4.2 million per year in O&M and annual financing costs. This analysis assumes that the capital costs will be financed through bonds. The calculation for the annual financing cost assumes a 5 percent interest rate on the 33 Energy Options for the City of Atqasuk annual bond coupon payments plus annual deposits to a reserve fund (earning 3 percent interest) to cover the debt at the end of the 20-year term. Table 13. Total Annual Costs for the CNG option Item Amount Financing Cost $1,735,372 Operating and Maintenance Cost $1,462,835 Total: $4,198,207 Source: LAJA and Northern Economics estimates 4.5.5 Total Cost Compared to Status Quo The existing system using diesel for power generation and heating has an annual total cost of $2.4 million. Considering the analysis above, the CNG option is estimated to cost more in annual payments than the existing system. The estimated annual operating and maintenance cost of this option is however lower than the annual costs of the existing system. 4.6 Summary of Financial Analysis Table 14 compares the annual O&M costs of the different options with the existing system. All the options evaluated in this study are projected to have lower annual O&M costs compared to the diesel system in place at the community. Table 14. Comparison of Estimated Annual O&M Costs of Energy Options for the Community of Atqasuk Options Amount Existing Diesel System $2,388,813 1. Gas pipeline from Walakpa to Atqasuk (for power and heating) $1,422,635 2. Power transmission system from Barrow to Atqasuk (for power and electric heat) $914,500 3. Power transmission system from Barrow to Atqasuk (for Power and retaining diesel for heating) $1,200,800 4. Compressed Natural Gas (for power and heating) $1,462,835 Source: LAJA and Northern Economics, Inc. estimates Table 15 compares the total annual costs of all the four options with respect to financing costs and O&M costs. The following summarizes all the different options: Option 1: Gas pipeline from Walakpa to Atqasuk for power and heating Option 2: Power transmission system from Barrow to Atqasuk for power and electric heat Option 3: Power transmission system from Barrow to Atqasuk for Power and retaining diesel for heating Option 4: Compressed Natural Gas Option 34 Energy Options for the City of Atqasuk As shown in the Table 15, Option 2, the power transmission system from Barrow to serve both electric power and heat to the community, is the least expensive among the 4 options. Table 15. Estimated Total Annual Costs of the 4 Recommended Energy Options for the City of Atqasuk Item Option 1 Option 2 Option 3 Option 4 Financing Costs $3,812,926 $1,251,500 $1,225,400 $1,735,372 Operating and Maintenance Costs $1,422,635 $914,500 $1,200,800 $1,462,835 Total Annual Costs $5,235,561 $2,165,984 $2,426,200 $4,198,207 Source: LAJA and Northern Economics, Inc. estimates 35 Energy Options for the City of Atqasuk 36 5 Recommendations for Further Analysis The study team offers the following recommendations for further consideration: 1. Since the Borough has a waste heat recovery system it maybe prudent to install a high efficiency fuel oil boiler and operate the waste heat loop as a district heating loop. This could cover the school, power plant, and water/sewer plant. A future waste heat addition will cover USDW, PSO, Fire Station, Health Clinic, and City Hall; many of the large facilities could be covered and all the other heating requirements of the community could be converted to electric heat. The potential cost savings of this alternative should be explored. 2. The power line option is an attractive alternative given the analysis in this study. It is recommended that this option be further explored on a regional basis to include other communities such as Wainwright. 3. Further analysis with respect to power and heating generation capacity and gas usage at BUECI is warranted to ensure that adding on Atqasuk power and heating requirements could be done within the double firm capacity criteria that they are required to maintain. If the BUECI system is underutilized it is also possible that adding on the Atqasuk requirements would be beneficial to BUECI by increasing its efficiency. 4. Another consideration is for the Borough to build its own power plant at Walakpa. 5. Given that this study is a conceptual level analysis of the various options, the next step would be a more detailed engineering and cost study of the selected option(s). 37 Energy Options for the City of Atqasuk 38 6 References Alaska Department of Commerce, Community, and Economic Development (DCCED). Community Database Online. Available at http://www.commerce.state.ak.us/dca/commdb/CF_BLOCK.htm. November 20, 2007. Alaska Department of Natural Resources (DNR), Division of Mining, Land, and Water. A Report on the Tundra Travel Modeling Project. Appendix A: Tundra Opening and Closing Dates. Available at http://www.dnr.state.ak.us/mlw/tundra/AppendixA.pdf. December 5, 2007. Armstrong, Richard. Project Analysis Report, Anaktuvuk Pass Energy Analysis, Anaktuvuk Pass, Alaska. September 13, 2006. ASCG, Inc. North Slope Borough Energy Assessment. Report prepared for the North Slope Borough. July 1992. ASRC. Personal communication with Northern Economics. April 3, 2007. Bartsch, Andre. Dynetek Industries Ltd. Cost estimate for CNG storage and transport modules prepared at the request of Northern Economics, Inc. December 4, 2007. Collins, F. R. Test Wells, Meade and Kaolak Areas, Alaska. Exploration of Naval Petroleum Reserve No. 4 and Adjacent Areas, Northern Alaska, 1944-53. Part 5, Subsurface Geology and Engineering Data. Geological Survey Professional Paper 305-F. 1958, Prepared and published at the request of and in cooperation with the U.S Department of the Navy, Office of Naval Petroleum and Oil Shale Reserves. Crowley Maritime Corporation. CATCO All-Terrain Vehicle Specifications. Available at http://www.crowley.com/mediaRoom/images/publications-brochures/Catco.pdf. December 3, 2007. Grinage, Kent. North Slope Borough, Deputy Director of Capital Improvement Projects and Utilities. Personal communication with Northern Economics. April 2007. Harland, Bruce. Vice President, Contract Services Alaska, Crowley Marine Services. Personal communication with Northern Economics. January 1, 2008. Jack West Associates. Transmission Line, Barrow-Atqasuk-Wainwright. Project Planning Report prepared for the North Slope Borough. September 1981. Knox, Natalie. Media and Communications, ConocoPhillips Alaska. Personal communication with Northern Economics. April 24, 2007. LCMF Inc. and Chester E. Paris. Energy Assessment Study Phase II, Supplying the Villages of Atqasuk and Wainwright with Natural Gas. August 31, 1996. Lynch, Leon. Natural Resource Specialist, Alaska Department of Natural Resources, Northern Region Office. Personal communication with Northern Economics, Inc. December 11, 2007. Miller, Jeff. Cruz Construction. Personal communication with Lee Johnson and Associates. January 2008. North Slope Borough (NSB). North Slope Borough records on village power plant fuel consumption, generation, and efficiency, financial records, and fuel prices, obtained from the Fuel Division. March 13, 2007. 39 Energy Options for the City of Atqasuk 40 Petrie, Brent. Manager, Special Projects, Alaska Village Electric Cooperative. Personal communication with Northern Economics. April 2007. Petroleum News, 2006 http://www.petroleumnews.com/pntruncate/319723660.shtml PND, Inc. and Northern Economics, Inc. The Feasibility of Propane Distribution in Alaska Coastal Communities. A report prepared for the Alaska Natural Gas Development Authority. 2005. Renshaw, Anson. Preliminary Report. Applicability of the Meade River Coal Deposit as an Indigenous Energy Source for the New Village of Atkasuk (Atkasook), North Slope Borough, Alaska. February 1, 1976. Roles, Mike. Vehicle Sales and Rentals, Rolligon. Personal Communication with Northern Economics. May 2007. Sandberg, Bruce. Cameron Compression Systems. Compression system cost estimate prepared at request of Northern Economics, Inc. December 3, 2007. Schindler, J. F. The Second Exploration, 1975 - 1982: National Petroleum Reserve in Alaska (formerly Naval Petroleum Reserve No. 4), prepared for the U.S. Geological Survey, Office of the National Petroleum Reserve in Alaska. 1983. State of Alaska, 2007a. http://www.commerce.state.ak.us/dca/commdb/CIS.cfm State of Alaska, 2007b. Community Database Online. Department of Commerce, Community & Economic Development. State of Alaska, 2007c. Division of Community Advocacy, Department of Commerce, Community, and Economic Development. Current Community Conditions: Fuel Prices Across Alaska. Fall- Winter 2006 update. http://www.dced.state.ak.us/dca/pub/CFR_WINTER_06.pdf Stokes, Pete. Petroleum Engineer, Petrotechnical Resources Alaska (PRA). Data on Walakpa and South Barrow natural gas characteristics prepared at request of Northern Economics, Inc. December 3, 2007. WAFG, 2006. Request for Proposals, Purchase and delivery of pour point depressed no. 2 diesel fuel for seven locations in Western Alaska. WAVE, 2007. http://www.nsg-llc.com/past2.htm#PRESENT Williams, J.R. Engineering-geologic maps of northern Alaska, Meade River Quadrangle. Department of the Interior, United States Geological Survey. 1983. Worley, Mike. Realty Specialist. Bureau of Land Management (BLM), Arctic Field Office. Personal communication with Northern Economics, Inc. December 12, 2007. Appendix A: Final Report Presentation Notes August 28, 2008 On August 28th Lee Johnson, Leland A. Johnson & Associates and Kent Grinage, Division Manager held a community meeting in Atqasuk to present and discuss the Atqasuk Energy Assessment study funded by a NPRA Grant. Twenty village residents attended the presentation. The following are questions and comments from the attendees and responses and comments by the presenters. Question: Was local natural gas considered? • Yes. It is expensive to explore and seismic data is not encouraging. Conoco-Phillips drilled a dry hole south of Walapka Question: How about the use of coal? This would create jobs in the community. • A district heating scenario was considered that included only the Borough facilities. • We considered stoker type heating units that would serve 6 to 8 homes. • Coal would be too messy if handled house by house. Question: Will jobs be lost if the power plant shuts down due a power intertie? • The power plant would still be kept functional as a backup in the event there is an outage in intertie power. Therefore some jobs would continue. Question: What is the next step? • Perform more detailed studies of the selected alternatives. Question: Why do these studies take so long? • Studies are quite involved and always take longer than expected. Question: Will you come again to tell us about the results of the next phase? • Yes Question: We would like to have the elders attend and an interpreter provided. It is difficult to understand some of the big words. • Yes Comments: • The Village would like to be more involved in these studies. • The power line would eliminate jobs. • Each alternative has its pros and cons. An alternative may create a job loss in one area but would free up funds to create new jobs in other areas such as education, health, public safety or Public Works. 41 Energy Options for the City of Atqasuk 42 Appendix B: Product Specification Brochures 43 Energy Options for the City of Atqasuk 44 Bulk Transport SystemTel: 403.720.0262 Fax: 403.720.0263 info@dynetek.com www.dynetek.com Dynetek Industries Ltd. designs and manufactures a lightweight Bulk Transport (BT) System used for efficient transportation of compressed natural gas (CNG), compressed gaseous hydrogen (H2), and other industrial gases for land and marine applications. Dynetek’s BT System provides an alternative, cost effective development solution for gas markets, while acting as an instant mobile gas pipeline by making CNG, H2 and other industrial gases immediately accessible to end users. Market Applications: Unique Storage Advantage: The BT System can supply CNG to natural gas refueling stations, transport natural gas from remote locations or stranded natural gas reserves, provide a temporary supply of natural gas to pipelines undergoing maintenance, and service customers not connected to existing natural gas distribution systems. The BT System also provides emergency distribution services in the event of a line break, and can be used to transport other gases such as: hydrogen, helium, nitrogen, and other industrial gases. The unique storage advantage of the BT System lies in the use of Dynetek’s DyneCell cylinder made from a seamless, thin wall aluminum liner covered with a full carbon fibre overwrap. DyneCell cylinders are extremely lightweight, non-permeable, and exhibit limited expansion under pressure and temperature change. The BT System is available in two configurations: the BT-30 System (contains 3 BT modules) and the BT-60 System (contains 6 BT modules). Each BT module can be isolated for individual use or all three modules can be used to increase gas flow rates. Individual BT modules may be removed from the trailer to accommodate maintenance or special road loading requirements, with customized trailers and BT module configurations available upon request. Solutions for Gas Markets: R 4410 - 46 Avenue SE Calgary, Alberta Canada T2B 3N7 T: 403.720.0262 F: 403.720.0263 Breitscheider Weg 117a D-40885 Ratingen Germany T: +49 2102 30963 0 F: +49 2102 30963 10 Toll-Free: 1.888.396.3835 info@dynetek.com www.dynetek.com Dynetek is an ISO 9001 and QS 9000 registered company. Dynetek Europe GmbH is an ISO 9001 and ISO 14001 registered company. Copyright c Dynetek Industries Ltd. 2006 BT-10 Module Specifications: Internal Volume: 10,062 W.C. Litres Quantity of CNG: 100,000 SCF / 1915 kg / 2,840 Nm3 Quantity of H2: 69,000 SCF / 166 kg Dimensions: 3 m x 2.5 m x 2.5 m Cylinders: 39 cylinders / per module Portable Refueling Option: Dynetek also offers portable refueling options through the Mobile Refueling System (MRFS). The MRFS is a mobile unit, available in various sizes, which can be towed with a standard pick-up truck. The MRFS is designed to efficiently transport CNG, H2 and other compressed industrial gases. The MRFS is ideally suited to service fleets of CNG or H2 vehicles where fueling infrastructure does not exist, and also provides effective solutions for natural gas distribution companies requiring emergency distribution services in the event of a line break. 30,186 W.C. Litres 300,000 SCF / 5,780 kg / 8,450 Nm3 206,000 SCF / 500 kg 3 Modules 223 bar / 3240 psi 25,000 kg 60,372 W.C. Litres 600,000 SCF / 11,175 kg / 16,900 Nm3 412,000 SCF / 1000 kg 6 Modules 223 bar / 3240 psi 50,000 kg BT System Specifications and Configurations: Internal Volume: Quantity of CNG: Quantity of H2: Gas Transport Modules: Service Pressure: Full System Weight: Internal Volume: Quantity of CNG: Quantity of H2: Gas Transport Modules: Service Pressure: Full System Weight: Model BT-30 Model BT-60 DYNETEK Industries Ltd. and its subsidiary DYNETEK Europe GmbH design and manufacture DyneCell cylinders and Advanced Lightweight Fuel Storage Systems for compressed natural gas (CNG), compressed hydrogen (H2), and other industrial gases. Dynetek’s proprietary technology powers automobiles, buses and trucks, and also serves the industrial gas and energy sectors in the bulk transport and storage of compressed gases. Used in various applications around the world, the systems core technology is the lightweight, DyneCell cylinder made from a seamless, thin wall aluminum liner covered with a full carbon fibre overwrap. Dynetek works with its customers to provide practical and innovative solutions. Through its state-of-the-art manufacturing facilities and commitment to quality management, customers receive products and services of consistent quality that meet their requirements. A world leader of storage systems for alternative fuel vehicles, Dynetek’s systems and components are certified to, and compliant with international industry standards. R R Worldwide Logistics • Liner Services • Contract Towing & Transportation • Energy Support • Ship Assist & Escort • Petroleum/Chemical Transport www.crowley.com © Crowley Maritime Corporation, 2003 CROWLEY is a registered trademark of Crowley Maritime Corporation CROWLEY ® People Who Know ™ For more information or to set up a meeting, contact CATCO at: Crowley Alaska, Inc. 2525 C Street, Suite 408 Anchorage, AK 99503-2639 Phone: 907-278-4978 Fax: 907-257-2828 CROWLEY ® People Who Know™ CATCO Tires: 4 tires (air bags), 54” diameter x 68”, 2-ply vidar cord, lug or smooth tread, inflation average 4 PSI, ground contact for each tire is 1,500 square inches Cargo deck dimensions: 7’ wide by 11’ long *Detailed individual specification sheets available on request. ANCILLARY EQUIPMENT SPRAY ICE SUPPORT 5,200 gpm high-pressure self-contained spray pumps 3,000 gpm high-pressure self-contained spray pumps ICE ROAD SUPPORT 3,000 gallon insulated water houses DRILLING RIG SUPPORT 4,000 gal DOT fuel tanks 8,000 gal DOT fuel tanks 3,000 gal Guzzler vacuum tanks 4,200 gal vacuum tank carriers PROJECT SUPPORT Construction camps Fuel storage tanks Drill sled CAT tracked trailers CATCO ALL-TERRAIN VEHICLE SPECIFICATIONS CATCO RD-85 (8 air bagged tractor) Vehicle weight: Curb: 26,000 lbs, Payload: 20,000-30,000 lbs, Gross vehicle weight (GVW): 46,000-56,000 lbs Suspension and drive: 8 tires (air bags), 54” diameter x 68” wide, each with top roller drive and pivoted yoke arms Ground pressure (at 46,000 lbs GVW): Front unit 2.9 psi Rear unit 5.4 psi Frames: Welded aluminum Cargo deck dimensions: 16’ wide by 12.5’ long CATCO RD-85/RD-45 TRACTOR TRAILER (12 air bagged tractor-trailer unit) Vehicle weight: Curb: 46,000 lbs, Payload: 60,000 lbs, Gross vehicle weight (GVW): 106,000 lbs Suspension and drive: 12 tires (air bags), 54” diameter x 68” wide, smooth tread, each with top roller drive and pivoted yoke arms Frames: Welded aluminum Cargo deck dimensions: 16’ wide by 40’ long CATCO RD-105/RD-45 TRACTOR TRAILER (14 air bagged tractor-trailer unit) Vehicle weight: Curb: 50,000 lbs, Payload: 85,000 lbs, Gross vehicle weight (GVW): 135,000 lbs Suspension and drive: 14 tires (air bags), 54” diameter x 68” wide, smooth tread, each with top roller drive and pivoted yoke arms Frames:Welded aluminum Cargo deck dimensions: 16’ wide by 40’ long LIGHT ALL-TERRAIN VEHICLE (LATV) Vehicle weight: Empty: 10,300 lbs, Payload: 10,000 lbs, Gross vehicle weight (GVW): 20,300 lbs WE GO WHERE NO ONE ELSE CAN. Roads. Who needs them? Not Crowley’s CATCO all-terrain vehicles. Because they’re constructed to get across all kinds of harsh land- scape. Like the sandy deserts of Saudi Arabia. The treacherous jungles of Southeast Asia. And the frozen tundra of Alaska. In fact, they’re the only all-terrain vehicles certified by the state of Alaska to travel over the tundra in summer operations. That’s because they “float” across the land without damaging it – a huge advantage for the environmentally sensitive times we’re living in today. Plus, they’re operated by people who care about the earth and know how to keep it safe. CATCO. The only way to get there from here. WHAT WE’RE MADE OF. All twenty CATCO vehicles are equipped with inflated low-pres- sure air bags instead of traditional tires. Controlled by operators inside the cab, the air bags allow the vehicle’s weight to be distributed over a large area, minimizing impact on terrain. You can transport heavy loads over sod, swamps, marshes and desert sands as well as tundras, ice and snow fields – even rocky, uneven ground. CATCO vehicles can climb areas with a 60-degree forward or reverse pitch, or a 40-degree side pitch. And they’re pretty speedy for an all-terrain vehicle carting around a heavy load – they run 20 miles per hour on a good trail, 8 miles per hour on rougher terrain. Much faster than any other all-terrain vehicle of its kind. WHAT WE’RE CAPABLE OF. It’s a fact of life that the world’s most valuable resources are in some of the most difficult places to reach. CATCO vehicles transport all types of cargo to hard-to-reach places like the North Slope. We’ve taken large modules and equipment from base camps in Prudhoe and transported them to remote drilling sites for oil exploration. For example, our team transported the drilling rig, support equipment and fuel for Anadarko’s Altamura and Phillips’ Hunter locations. But CATCO vehicles do more than just transport cargo. CATCO units construct and maintain ice roads and ice islands. These tem- porary structures provide a practical way to get you and your equip- ment to where you need to go – then just melt away without dis- rupting the surrounding environment when you’re through. Our cus- tomers also call on us when they need help. For instance, if bad weather prevents planes from transporting shift workers to and from a work site, CATCO vehicles can roll right in, hook their bus on the back and get the workers back and forth safely. Here’s a complete list of what we do: Long Haul:We transport everything you need to set up a drilling site, including the drilling rig, support equipment, consumables and fuel. We travel from Prudhoe Bay south to Brooks Range, all the way to the Canadian border and west to Point Barrow. All in all, we cover an operating area of 600 x 300 miles. Ice Road/Ice Island Building:These amazing structures are built to provide logistics support for preliminary exploratory operations. Ice roads and ice islands are built on- and off-shore. Both roads and islands can be made into permanent structures with the use of gravel. Or they can be left to melt away, without a single sign that they were ever there. Emergency Response:CATCOs help out by delivering emergency supplies and hauling equipment to sites of oil spills and fires. Geotechnical Support:A soils drill is mounted to a CATCO vehicle allowing engineers to bore through the surface to obtain the information they need. Logistics Support to Remote Villages:CATCOs deliver fuel oil equipment and other supplies, such as building materials, to isolated communities. JUST ANOTHER DAY IN THE ARCTIC. The average winter temperature is -63˚F. And with winds blowing at 35 miles per hour, it feels like it’s -108˚F. CATCO operators are tough, and they love every minute of it. Since there aren’t any service stations around, each one is trained as a driver, mechanic, engineer and navigator. No one delivers such remarkable equip- ment with experience to match. Ask anyone who knows Crowley. We know how to get the job done right. WE GO WHERE NO ONE ELSE CAN. Roads. Who needs them? Not Crowley’s CATCO all-terrain vehicles. Because they’re constructed to get across all kinds of harsh land- scape. Like the sandy deserts of Saudi Arabia. The treacherous jungles of Southeast Asia. And the frozen tundra of Alaska. In fact, they’re the only all-terrain vehicles certified by the state of Alaska to travel over the tundra in summer operations. That’s because they “float” across the land without damaging it – a huge advantage for the environmentally sensitive times we’re living in today. Plus, they’re operated by people who care about the earth and know how to keep it safe. CATCO. The only way to get there from here. WHAT WE’RE MADE OF. All twenty CATCO vehicles are equipped with inflated low-pres- sure air bags instead of traditional tires. Controlled by operators inside the cab, the air bags allow the vehicle’s weight to be distributed over a large area, minimizing impact on terrain. You can transport heavy loads over sod, swamps, marshes and desert sands as well as tundras, ice and snow fields – even rocky, uneven ground. CATCO vehicles can climb areas with a 60-degree forward or reverse pitch, or a 40-degree side pitch. And they’re pretty speedy for an all-terrain vehicle carting around a heavy load – they run 20 miles per hour on a good trail, 8 miles per hour on rougher terrain. Much faster than any other all-terrain vehicle of its kind. WHAT WE’RE CAPABLE OF. It’s a fact of life that the world’s most valuable resources are in some of the most difficult places to reach. CATCO vehicles transport all types of cargo to hard-to-reach places like the North Slope. We’ve taken large modules and equipment from base camps in Prudhoe and transported them to remote drilling sites for oil exploration. For example, our team transported the drilling rig, support equipment and fuel for Anadarko’s Altamura and Phillips’ Hunter locations. But CATCO vehicles do more than just transport cargo. CATCO units construct and maintain ice roads and ice islands. These tem- porary structures provide a practical way to get you and your equip- ment to where you need to go – then just melt away without dis- rupting the surrounding environment when you’re through. Our cus- tomers also call on us when they need help. For instance, if bad weather prevents planes from transporting shift workers to and from a work site, CATCO vehicles can roll right in, hook their bus on the back and get the workers back and forth safely. Here’s a complete list of what we do: Long Haul:We transport everything you need to set up a drilling site, including the drilling rig, support equipment, consumables and fuel. We travel from Prudhoe Bay south to Brooks Range, all the way to the Canadian border and west to Point Barrow. All in all, we cover an operating area of 600 x 300 miles. Ice Road/Ice Island Building:These amazing structures are built to provide logistics support for preliminary exploratory operations. Ice roads and ice islands are built on- and off-shore. Both roads and islands can be made into permanent structures with the use of gravel. Or they can be left to melt away, without a single sign that they were ever there. Emergency Response:CATCOs help out by delivering emergency supplies and hauling equipment to sites of oil spills and fires. Geotechnical Support:A soils drill is mounted to a CATCO vehicle allowing engineers to bore through the surface to obtain the information they need. Logistics Support to Remote Villages:CATCOs deliver fuel oil equipment and other supplies, such as building materials, to isolated communities. JUST ANOTHER DAY IN THE ARCTIC. The average winter temperature is -63˚F. And with winds blowing at 35 miles per hour, it feels like it’s -108˚F. CATCO operators are tough, and they love every minute of it. Since there aren’t any service stations around, each one is trained as a driver, mechanic, engineer and navigator. No one delivers such remarkable equip- ment with experience to match. Ask anyone who knows Crowley. We know how to get the job done right. Worldwide Logistics • Liner Services • Contract Towing & Transportation • Energy Support • Ship Assist & Escort • Petroleum/Chemical Transport www.crowley.com © Crowley Maritime Corporation, 2003 CROWLEY is a registered trademark of Crowley Maritime Corporation CROWLEY ® People Who Know ™ For more information or to set up a meeting, contact CATCO at: Crowley Alaska, Inc. 2525 C Street, Suite 408 Anchorage, AK 99503-2639 Phone: 907-278-4978 Fax: 907-257-2828 CROWLEY ® People Who Know™ CATCO Tires: 4 tires (air bags), 54” diameter x 68”, 2-ply vidar cord, lug or smooth tread, inflation average 4 PSI, ground contact for each tire is 1,500 square inches Cargo deck dimensions: 7’ wide by 11’ long *Detailed individual specification sheets available on request. ANCILLARY EQUIPMENT SPRAY ICE SUPPORT 5,200 gpm high-pressure self-contained spray pumps 3,000 gpm high-pressure self-contained spray pumps ICE ROAD SUPPORT 3,000 gallon insulated water houses DRILLING RIG SUPPORT 4,000 gal DOT fuel tanks 8,000 gal DOT fuel tanks 3,000 gal Guzzler vacuum tanks 4,200 gal vacuum tank carriers PROJECT SUPPORT Construction camps Fuel storage tanks Drill sled CAT tracked trailers CATCO ALL-TERRAIN VEHICLE SPECIFICATIONS CATCO RD-85 (8 air bagged tractor) Vehicle weight: Curb: 26,000 lbs, Payload: 20,000-30,000 lbs, Gross vehicle weight (GVW): 46,000-56,000 lbs Suspension and drive: 8 tires (air bags), 54” diameter x 68” wide, each with top roller drive and pivoted yoke arms Ground pressure (at 46,000 lbs GVW): Front unit 2.9 psi Rear unit 5.4 psi Frames: Welded aluminum Cargo deck dimensions: 16’ wide by 12.5’ long CATCO RD-85/RD-45 TRACTOR TRAILER (12 air bagged tractor-trailer unit) Vehicle weight: Curb: 46,000 lbs, Payload: 60,000 lbs, Gross vehicle weight (GVW): 106,000 lbs Suspension and drive: 12 tires (air bags), 54” diameter x 68” wide, smooth tread, each with top roller drive and pivoted yoke arms Frames: Welded aluminum Cargo deck dimensions: 16’ wide by 40’ long CATCO RD-105/RD-45 TRACTOR TRAILER (14 air bagged tractor-trailer unit) Vehicle weight: Curb: 50,000 lbs, Payload: 85,000 lbs, Gross vehicle weight (GVW): 135,000 lbs Suspension and drive: 14 tires (air bags), 54” diameter x 68” wide, smooth tread, each with top roller drive and pivoted yoke arms Frames:Welded aluminum Cargo deck dimensions: 16’ wide by 40’ long LIGHT ALL-TERRAIN VEHICLE (LATV) Vehicle weight: Empty: 10,300 lbs, Payload: 10,000 lbs, Gross vehicle weight (GVW): 20,300 lbs Worldwide Logistics • Liner Services • Contract Towing & Transportation • Energy Support • Ship Assist & Escort • Petroleum/Chemical Transport www.crowley.com © Crowley Maritime Corporation, 2003 CROWLEY is a registered trademark of Crowley Maritime Corporation CROWLEY ® People Who Know ™ For more information or to set up a meeting, contact CATCO at: Crowley Alaska, Inc. 2525 C Street, Suite 408 Anchorage, AK 99503-2639 Phone: 907-278-4978 Fax: 907-257-2828 CROWLEY ® People Who Know™ CATCO Tires: 4 tires (air bags), 54” diameter x 68”, 2-ply vidar cord, lug or smooth tread, inflation average 4 PSI, ground contact for each tire is 1,500 square inches Cargo deck dimensions: 7’ wide by 11’ long *Detailed individual specification sheets available on request. ANCILLARY EQUIPMENT SPRAY ICE SUPPORT 5,200 gpm high-pressure self-contained spray pumps 3,000 gpm high-pressure self-contained spray pumps ICE ROAD SUPPORT 3,000 gallon insulated water houses DRILLING RIG SUPPORT 4,000 gal DOT fuel tanks 8,000 gal DOT fuel tanks 3,000 gal Guzzler vacuum tanks 4,200 gal vacuum tank carriers PROJECT SUPPORT Construction camps Fuel storage tanks Drill sled CAT tracked trailers CATCO ALL-TERRAIN VEHICLE SPECIFICATIONS CATCO RD-85 (8 air bagged tractor) Vehicle weight: Curb: 26,000 lbs, Payload: 20,000-30,000 lbs, Gross vehicle weight (GVW): 46,000-56,000 lbs Suspension and drive: 8 tires (air bags), 54” diameter x 68” wide, each with top roller drive and pivoted yoke arms Ground pressure (at 46,000 lbs GVW): Front unit 2.9 psi Rear unit 5.4 psi Frames: Welded aluminum Cargo deck dimensions: 16’ wide by 12.5’ long CATCO RD-85/RD-45 TRACTOR TRAILER (12 air bagged tractor-trailer unit) Vehicle weight: Curb: 46,000 lbs, Payload: 60,000 lbs, Gross vehicle weight (GVW): 106,000 lbs Suspension and drive: 12 tires (air bags), 54” diameter x 68” wide, smooth tread, each with top roller drive and pivoted yoke arms Frames: Welded aluminum Cargo deck dimensions: 16’ wide by 40’ long CATCO RD-105/RD-45 TRACTOR TRAILER (14 air bagged tractor-trailer unit) Vehicle weight: Curb: 50,000 lbs, Payload: 85,000 lbs, Gross vehicle weight (GVW): 135,000 lbs Suspension and drive: 14 tires (air bags), 54” diameter x 68” wide, smooth tread, each with top roller drive and pivoted yoke arms Frames:Welded aluminum Cargo deck dimensions: 16’ wide by 40’ long LIGHT ALL-TERRAIN VEHICLE (LATV) Vehicle weight: Empty: 10,300 lbs, Payload: 10,000 lbs, Gross vehicle weight (GVW): 20,300 lbs Mobile Refueling System (MRFS)Tel: 403.720.0262 Fax: 403.720.0263 info@dynetek.com www.dynetek.com The Mobile Refueling System (MRFS) LV GHVLJQHG WR HI¿FLHQWO\ WUDQVSRUW FRPSUHVVHG QDWXUDO JDV &1*  FRPSUHVVHG JDVHRXV K\GURJHQ +  DQGRWKHUFRPSUHVVHGLQGXVWULDOJDVHV 'HVLJQHGE\'\QHWHN,QGXVWULHV/WG WRJHWKHU ZLWKLWV DOOLDQFH SDUWQHU HQYLUR0(&+,QGXVWULHV/WGWKH05)6 DFWV DV DQ ,QVWDQW ,QIUDVWUXFWXUHŠE\ PDNLQJ&1*LPPHGLDWHO\DFFHVVLEOHWR HQGXVHUV 7KH05)6FRUHWHFKQRORJ\LV'\QHWHN¶V OLJKWZHLJKW '\QH&HOOŠ F\OLQGHU ZKLFK LV PDGHIURP D VHDPOHVV WKLQ ZDOO DOXPLQXPOLQHUFRYHUHGZLWKDIXOOFDUERQ ¿EUHRYHUZUDS 7KH XQLTXH VWRUDJH DGYDQWDJH RI WKH 05)6 OLHV LQ WKH XVH RI '\QH&HOO F\OLQGHUVZKLFK DUH PRXQWHGLQ D KH[DJRQDOFORVHSDFNHGFRQ¿JXUDWLRQWR SURYLGHRSWLPXPVWRUDJHFDSDFLW\ '\QH&HOO F\OLQGHUV DUH QRQSHUPHDEOH DQGH[KLELWOLPLWHG H[SDQVLRQ XQGHU SUHVVXUHDQGWHPSHUDWXUHFKDQJHV %HQH¿WVRIWKH05)6 &DQEHWRZHGZLWKDVWDQGDUGSLFNXS WUXFNZLWKDOEWRZLQJFDSDFLW\ 6HOIFRQWDLQHGV\VWHPZLWKDOXPLQXP FRYHUV &\OLQGHUV DQG V\VWHP FRQ¿JXUDWLRQ 86'27 DSSURYHG  '27( DQG7UDQVSRUWDWLRQ&DQDGDDSSURYHG 7&68 6HUYLFHV QHZÀHHWV RI&1* RU + YHKLFOHV ZKHUHIXHOLQJ LQIUDVWUXFWXUH GRHVQRWH[LVW 2IIHUVHPHUJHQF\GLVWULEXWLRQVHUYLFH LQWKHHYHQWRIDOLQHEUHDN 3URYLGHVWHPSRUDU\VXSSO\RIQDWXUDO JDVWRFXVWRPHUVZKHUHSLSHOLQHVDUH XQGHUJRLQJVFKHGXOHGRUXQVFKHGXOHG PDLQWHQDQFH 3URYLGHVDWHPSRUDU\IXHOVXSSO\WR VSHFLDO HYHQWVIRU SRZHU KHDW DQG IXHO 0DUNHW$SSOLFDWLRQVIRUWKH05)6 Alternative Fuel Fleets Gas Utilities $YHQXH6( &DOJDU\$OEHUWD Canada T2B 3N7 T: 403.720.0262 F: 403.720.0263 %UHLWVFKGLGHU:HJD '5DWLQJHQ *HUPDQ\ T: +49 2102 30963 0 F: +49 2102 30963 10 7ROO)UHH 1.888.396.3835 info@dynetek.com www.dynetek.com Dynetek is an ISO 9001 and QS 9000 registered company. Dynetek Europe GmbH is an ISO 9001 and ISO 14001 registered company. Copyright c Dynetek Industries Ltd. 2006c          ModelModel NumberNumber          T RAILER VOLUMESTRAILER VOLUMES MRFS-8MRFS-8 05)605)6 05)605)6 HydrogenHydrogen CNGCNG Kg Nm3 SCFKg Nm3 SCF Kg Nm3 SCFKg Nm3 SCF Number ofNumber of CylindersCylinders 88   /HQJWK¶ ´ /HQJWK¶ ´ :LGWK´:LGWK´ +HLJKWIURPJURXQGWRKLWFKDWWDFKPHQW´+HLJKWIURPJURXQGWRKLWFKDWWDFKPHQW´ +LWFK7\SH´%DOO+LWFKRU´/XQHWWH(\H+LWFK+LWFK7\SH´%DOO+LWFKRU´/XQHWWH(\H+LWFK 7UDLOHU3UHVVXUH7UDLOHU3UHVVXUH /RZ3UHVVXUH%DQN3UHVVXUHSVL/RZ3UHVVXUH%DQN3UHVVXUHSVL T RAILER DIMENSIONSTRAILER DIMENSIONS +HLJKW´+HLJKW´ (MRFS-8 model)(MRFS-8 model) (PSW\:HLJKWOEV NJ (PSW\:HLJKWOEV NJ '<1(7(. Industries Ltd. and its subsidiary DYNETEK Europe GmbH design and manufacture DyneCell cylinders and Advanced Lightweight Fuel Storage Systems for compressed natural gas (CNG), compressed hydrogen (H2), and other industrial gases. Dynetek’s proprietary technology powers automobiles, buses and trucks, and also serves the industrial gas and energy sectors in the bulk transport and storage of compressed gases. Used in various applications around the world, the systems core technology is the lightweight, DyneCell cylinder made from a seamless, thin wall aluminum liner covered with a full carbon ¿EUHRYHUZUDS Dynetek works with its customers to provide practical and innovative solutions. Through its state-of-the-art manufacturing facilities and commitment to quality management, customers receive products and services of consistent quality that meet their requirements. A world leader of storage systems for alternative fuel vehicles, Dynetek’s systems DQGFRPSRQHQWVDUHFHUWL¿HGWR and compliant with international industry standards. R R HI-TEC MODEL 10-30 TOPPING PLANT 600 BPD THROUGHPUT 30,000 METRIC TON PER YEAR THROUGHPUT Technical Description Introductory Information Val Verde specializes in building skid mounted modular crude oil refineries that process from 15,000 to 600,000 metric tons (300 to 12,000 bpd) of crude oil per year. Chemex, Inc. purchased the Val Verde modular refinery design in the late 1990’s. The basic crude oil atmospheric distillation unit (ADU) produces LSR, naphtha, diesel and residuum. Additional processing units can be supplied by Val Verde that are capable of producing specification high-octane motor fuel, commercial jet fuel, kerosene, winter and summer diesel, fuel oil and asphalt. Two or more plants can be installed on a single site allowing the simultaneous processing of more than one type of crude oil and one plant can still be in operation in the event that one plant is down. The plant sizes can be increased in stages. Val Verde’s basic, small ADU plants: • can be set up and be in operation within several days after arrival at a fully-prepared and completed site, • allow a single operator to restart the plant from a cold start in less than one hour and have the plant in full operation, • are completely automated and once an operator sets all the controlling points, all product temperatures and flows are controlled automatically. If a product specification drifts off, or if a potentially hazardous condition develops, the plant automatically turns itself off to a safe condition without the help of an operator. A “First Out” annunciator signals the reason for the shutdown by a flashing red light, • require only a flat support area or concrete slab, and • require no water, steam, instrument air or external fuel supply. Val Verde designs and builds the following additional equipment for its distillation units: • special alloy construction for processing high sulfur crudes, • desalter packages for removing salt from the crude for corrosion prevention, • naphtha, jet fuel and diesel hydrotreaters for sulfur removal from the products, • catalytic reformers for producing high octane gasoline motor fuels, • gasoline stabilizers for reducing the Reid vapor pressure of gasoline, • vacuum distillation units for producing paving grade asphalt (bitumen), • sulfur plants for sulfur conversion and air emissions reduction that include an amine plant, a sulfur plant and a tail gas plant, • winterized skids for operation in artic weather, and • portable laboratory and control buildings with supplies. HI-TEC Topping Plant Summary The Val Verde HI-TEC design comes in standard sizes of 300 bpd (15,000 metric tons per year), 600 bpd (30,000 metric tons per year), 1,000 bpd (50,000 metric tons per year), 3,000 bpd (150,000 metric tons per year) 6,000 bpd (300,000 metric tons per year) and 12,000 bpd (600,000 metric tons per year). The following data is specifically for the HI-TEC 10-30, which is a 600 bpd (30,000 metric tons per year) plant. Since our HI-TEC models have a turndown capability of 3 to 1, the 10-30 implies that this plant can operate at a rate of 10,000 to 30,000 metric tons per year (200 to 600 bpd). The Val Verde HI-TEC Model 10-30 topping plant is a modularized, highly portable topping plant capable of processing 600 barrels per day of a wide range of crude oil and produces naphtha, diesel and fuel oil. The plant can be set up within several days after arrival at a completed plant site and can be operational within a week of arrival. The plant is automatic, can be started up in one hour, has an automatic system to shut the plant down in the event that a hazardous situation occurs and a “First Out” annunciator to let the operator know the reason for the shutdown. Automatic controls control the temperature of the heater outlet, tower top vapor temperature, diesel side draw temperature, diesel reboiler temperature, the level of the tower bottoms, diesel stripper level and the naphtha and water levels in the naphtha accumulator. The tower and stripper are made of 316 stainless steel and the heater tubes are 9% chrome. The piping (2” and smaller) is 316 stainless steel tubing with bends and Swagelok fittings having no welds. The naphtha pump is a “canned” pump having no seals and the feed pump is a stainless steel lobe positive displacement pump that turns at only 360 rpm. Plant Feed and Products Flexibility is incorporated in the design of this plant to process a variety of crude oils. The actual capacity of the plant will depend on the percentages of the fractions of the specific crude processed. Specifically, the plant is designed to process 600 barrels per day of 35o to 41o API crude and the products from the plant are naphtha, diesel and reduced crude (fuel oil). The plant can be operated at 33% of its rated capacity. The ending True Boiling Point (TBP) cut point of the naphtha depends on the initial TBP cut point of the diesel being produced at the time. A selectable ending TBP cut point of 300 oF (149 oC) to 400 oF (205 oC) can be produced. The octane of the naphtha depends on the characteristics of the crude, the ending TBP cut point of the naphtha and the vapor pressure. The quantity of additives required to raise the octane of the naphtha depends on the desired octane for the motor gasoline and the susceptibility of the naphtha to the additive used. The starting TBP cut point of the diesel depends on the ending TBP cut point of the naphtha and the diesel product specifications. With the design basis crude, a starting TBP cut point of 300 oF (149 oC) to 400 oF (205 oC) and an ending TBP cut point of 600 oF (315 oC) to 680 oF (360 oC) is used with a minimum flash point of 125 oF (52 oC). Reduced crude is the bottom of the barrel with a minimum flash point of 150 oF (66 oC) and is normally used as a #6 fuel oil. The products will be furnished at the edge of the skid at the following pressures and temperatures: Naphtha Product: a minimum of 50 feet (15 meters) of head and a maximum temperature of 20 oF (6.7 oC) above ambient temperature, or 100 oF (38 oC), whichever is higher. Diesel: a minimum of 50 feet (15 meters) of head and a maximum temperature of 125 oF (52 oC). Reduced Crude: a minimum of 50 feet (15 meters) of head and a maximum temperature of 250 oF (121 oC). Codes and Standards The following prevailing standards of United States engineering design and codes are adhered to in the processing, layout and selection of the various component parts used in the fabrication and assembly of this plant: • ASME Code Section VIII, Division 1, Pressure Vessels and Heat Exchangers • ANSI B31.3 Petroleum Refinery Piping • FM Requirements for Burner Control • API-RP520, Parts I and II, Design and Installation of Pressure Relieving Systems in Refineries • API-500A Classification of Areas for Electrical Equipment in Petroleum Refineries (Class 1, Group D, Division 2) on the process end of the skid. A firewall separates the process end of the skid from the control room and heater end of the skid. A seal is placed in all conduits that pass through the firewall. The heater end of the skid is unclassified. All process vessels are designed and fabricated in accordance with the ASME Code, Section VIII, Division 1. The tower and stripper, with associated trays, are 316 stainless steel. Fabrication shops for the vessels are tested and certified by ASME, insurance companies and other regulatory agencies to perform fabrication in accordance with the ASME Code, Section VIII, Division 1. These shops are provided with a certificate having a certificate number and they are audited and re-certified every three years. Copies of the shop’s certificate are available after a purchase order has been issued for the coded vessels. The fabrication shops must use certified welders who are tested and certified in accordance with the ASME Code, Section IX. Pressure gauges are calibrated annually in accordance with a dead weight tester. Certified mill test reports on materials used on ASME Code vessels are provided and shipped with each vessel for the buyer’s and customs use. Sufficient surge capacity is provided in all vessels to assure stable control and allow corrective action to be taken in the event of a process upset or equipment failure. Sufficient elevation is provided for all vessels to assure adequate suction head at low liquid level for pumps. The heater is a horizontal cabin-type with a convection section. Certified mill test reports on materials used to build the heater are provided and shipped with the heater for the buyer’s and customs use. The heater is built in accordance with the following codes: • Coil: ASME Section I • Tubes: ASTM SA 335 P9 (9 chrome) • Fittings: ASTM & ASME SA 234 WP9 • Flanges: SA 182 F9 • Burner: FM Requirements All piping and valves required within the process battery limits are provided, fabricated and installed to the maximum practical extent. Piping design is according to ANSI B31.3. All process piping (2” and smaller) is 316 stainless steel tubing using tube bends, Swagelok fittings and a minimum of welds. Piping larger than 2” is A-106, Grade B seamless. Special Services Our standard plant includes furnishing the following: • Three (3) sets of job books containing vendor drawings, data, spare parts lists and equipment operating manuals. • Three (3) sets of drawings including process flow diagram (PFD), piping and instrumentation diagrams (P&IDs), equipment layout drawings, piping plans, electrical schematics, equipment specifications and data sheets. • Three (3) sets of plant operating manuals consisting of the recommended start-up, operating and shutdown procedures. • One (1) year supply of manufacturer’s recommended spare parts. • Five days of a start-up engineer’s time to assist in plant erection and training of buyer’s operators (travel and per diem expenses extra). Equipment and Services Excluded The following equipment and services are excluded from a Val Verde standard plant and will be furnished only on an optional adder basis: • All permits and permitting costs i.e. building, environmental, operating, etc. • Sales tax, use tax, duties, customs fees, or other taxes, if applicable • Freight and hauling the plant from the port to the site (quoted price is FAS Port of Houston) • Land acquisition • Site grading, tank berms and landscaping • Facility roads and paving • Main office or other buildings • Required utilities (such as potable water, fire protection, natural gas, electrical power, telephone, sewer, etc.) • Concrete foundations for the equipment • Unloading and erection of the plant at the site • Crude feed and product storage tanks • Truck or rail load/unload racks • Interconnecting piping (and associated pipe supports) between the plant and the storage tanks • Field (off-skid) electrical and controls wiring, etc. • Travel and living expenses for the start-up engineer Equipment Provided This plant consists of a process skid and a tower skid, which are assembled in one of our fabrication shops (either in Bakersfield, California or Houston, Texas). After testing, the skids are disconnected, export crated and shipped FAS Port of Houston. The process skid is divided into a heater section, control room/laboratory section and a process section. The sides and top of the control room/laboratory section are separated from the heater and process sections by a firewall. A firewall is also on top of the heater section. The process area is also enclosed by a firewall. The process section includes a feed pump, naphtha pump, diesel/crude exchanger, reduced crude/crude exchanger, naphtha accumulator, and all associated piping, valves, insulation, electrical and instrumentation. All off-site piping connections are made about 1’6” (0.5 meters) above the concrete foundation and on one corner of the process skid. The single point electrical connection is made in the heater end of the process skid. The plant uses about 22 kW of 380 volt, 50 hertz or 480 volt 60 hertz, 3-phase electricity. Other frequencies and voltages can be used if specified prior to contract execution. The plant can operate in artic conditions of -58 oF (-50 oC) to tropical conditions. Delivery is approximately six (6) months after contract execution and completion of funding arrangements. The process skid weighs less than 33 tons (30 metric tons) and is 10’-6” (3.2 meters) wide by 45’ (13.7 meters) long with a center height of 14’ (4.3 meters) and a side height of 11’-9” (3.6 meters). The following sketch shows views of the process skid. The tower skid includes the tower, stripper and overhead air cooler with associated piping, electrical, insulation and instrumentation. The tower and associated equipment is supported by steel beams and is shipped on its side. The tower skid weighs less than 16.5 tons (15 metric tons) and is 10’-6” (3.2 meters) wide by 11’-9” (3.6 meters) high by 34’-6” (10.5 meters) long. The following sketches show views of the tower skid. Upon arrival at the plant site, the process skid is set on a concrete slab at least 11’ (3.4 meters) wide by 46’ (14 meters) long and is designed for a loading of at least 210 pounds per square foot (1033 kilograms per square meter). The tower skid is then lifted and attached on top of the process skid as shown below. Piping and electrical connections are made between the tower skid and process skid. No welding or special tools are required. The off-site piping and electrical connections are then made to the process skid. If the off-sites are complete and a suitable crane is available, the plant should be ready to start purging and begin start-up within 3 days of arrival. Plant Operation Cold crude oil from off-site storage is received at the plant battery limits and is pumped by the crude charge pump on flow control. The crude oil exchanges heat with the diesel product and reduced crude product streams. The crude then flows to the crude heater where it is further heated and partially vaporized. The crude heater is a direct-fired heater, designed to burn off gas, natural gas or liquid fuel. Constant heater outlet temperature is maintained automatically by controlling the fuel flow to the heater. The partially vaporized crude oil from the crude heater flows to the flash zone of the atmospheric tower where the vapor and liquid separate. The vapor flows up the tower where it is cooled and partially condensed by reflux to form the side stream product. The liquid joins with the overflash liquid from the first tray above the flash zone and flows to the reduced crude stripping section in the bottom of the atmospheric tower. The overhead vapor from the atmospheric tower is cooled and partially condensed in the overhead condenser and flows to the overhead accumulator where liquid unstabilized naphtha, liquid water and uncondensed gas separate. Liquid water is automatically withdrawn from a boot on the overhead accumulator and flows to the skid edge. A portion of the liquid naphtha from the accumulator is returned to the top of the atmospheric tower as reflux to maintain the overhead vapor at a constant temperature and the remainder flows to the skid edge. Uncondensed gas from the accumulator flow on back-pressure control to be used as supplemental fuel for the crude heater. Unstripped diesel product flows from its side draw tray on the atmospheric tower to its stripper on temperature control. The diesel product is stripped with reboiled vapor to control the flash point. Product flows from the bottom of the stripper on level control, is partially cooled by exchanging heat with crude and then flows to the skid edge. Reduced crude product (normally #6 fuel oil) flows from the bottom of the atmospheric tower on level control through the reboiler, as required, and is then further cooled by the reduced crude/crude exchangers before flowing to the skid edge. A computer is not required for operation of this plant. The plant is operated with the following controls: • The crude feed pump is a rotary positive displacement pump. The rate is controlled by manually setting a local control valve and reading the flow rate directly from a chart. • An automatic temperature controller in the control panel controls the heater outlet temperature. • The diesel side draw product is controlled by an automatic temperature controller in the control panel that controls the temperature of the diesel side draw by controlling the flow rate. • An automatic temperature controller controls the tower top temperature by controlling the reflux flow rate. • An automatic temperature controller in the control panel controls the diesel reboiler temperature. • An automatic level controller controls the tower bottoms level by varying the flow rate of the bottoms pump. • An automatic level controller controls the stripper bottoms level by varying the flow rate of the diesel pump. • An automatic level controller controls the naphtha accumulator level by varying the flow rate of the naphtha pump. • For sub-zero weather, the air cooler temperature is controlled manually by opening and closing recirculation shutters. Environmental Impact The Val Verde HI-TEC Model 10-30 topping plant will not make a significant contribution of air contamination to the atmosphere. Fugitive emissions are minimal due to the small number of flanged connections and pumps. Since these plant use air cooling, the only other effects on the local environment are the products of combustion exhausted into the air by the plant heater and the water that is brought in with the crude oil. The plant would not be characterized by the United States Environmental Protection Agency (US EPA) as a major source as defined in 40 CFR 70.2 of the Code of Federal Regulations. The plant would be eligible for permit exemptions under Federal and State Regulations, even for severe non-attainment locations. Our emissions estimates are believed to be upper bound values based on the conservative application of emissions factors found in EPA AP-42 and other accepted procedures for calculating air emissions. The estimated air emissions from the heater are based on each barrel (or ton) of crude processed as follows: • Water Vapor: 4.625 lbs/bbl (15.5 kg/metric ton) • CO2: 13.68 lbs/bbl (45.92 kg/metric ton) • NOx: 57.34 lbs/bbl (192.5 kg/metric ton) • SOx: 0.009 lbs/bbl (0.03 kg/metric ton) per 1/10th of 1% sulfur in the fuel For each 1/10th of 1% of water in the crude feed, one barrel of distilled water will be produced for each 1000 barrels of crude processed (1 kg per metric ton). Since the water is in equilibrium with the distillate, the water may contain up to 500 mg per liter of total organic carbon (TOC). If a desalter is used, depending on the amount of salt in the crude, from 30 to 130 gallons per hour of brine water is discharged per 1000 barrels of crude processed (from 0.9 to 4 liters per hour for each metric ton per day).