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Natural gas bringing cheaper electricity to Oklahoma oil play

Oil companies are using natural gas instead of more expensive diesel to power their operations when electric service is not available in Oklahoma's Mississippian play.
BY JAY F. MARKS Modified: July 12, 2013 at 7:30 pm •  Published: July 11, 2013

Electricity can be hard to come by in some parts of the Mississippian oil play, so producers increasingly are turning to natural gas to power their operations.

Devon Energy Corp. plans to lease five more natural-gas fueled generators for its operations in northern Oklahoma after a successful pilot project with General Electric.

Construction and facilities engineer Michael Matlock, who leads the generator project at Devon, said the generators allow the company to power a site with natural gas from the wellbore, rather than buying about $100,000 worth of diesel each month.

He said using natural gas instead of diesel is cheaper and better for the environment.

“There's a lot of benefits overall,” Matlock said.

Devon is not the only company using the gas it produces to power its operations in the Mississippian, which covers a large swatch of northern Oklahoma and southern Kansas.

Chesapeake Energy Corp. uses natural gas-powered generators and other innovative approaches in areas like northwest Oklahoma that are not served by traditional utility power sources, spokesman Jim Gipson said.

SandRidge Energy Inc., the leader in the Mississippian play, has slashed the number of generators it has running on diesel.

CEO James Bennett told shareholders at the company's July 1 annual meeting that SandRidge has developed electric infrastructure so that only one in 10 of its wells are on generators.

Half of those generators are fueled by natural gas.

“We have very few wells on generators at this point,” said David Lawler, SandRidge's chief operating officer. “In this part of the world, we didn't have a full electrical distribution system. The company was very aggressive and stepped out and built these lines.

“From about a year and a half ago, we've taken the number of generators down from about 35 percent to about 11 percent.”

Power from gas

Devon's Matlock said producers prefer to get their power from the electric grid, but that isn't possible in some rural areas that are part of the Mississippian play.

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