Texas-based Green Energy Oilfield Services employs a large fleet of liquid natural gas-powered trucks to provide fluid transportation and storage.
Relying 100 percent on vehicles fueled by liquid natural gas (LNG) challenged Green Energy Oilfield Services. The company needed stations to refuel its fleet of 84 trucks, and its maintenance team had to learn how to service the LNG engines.
Green Energy, based in Fairfield, Texas, adopted LNG vehicles as a competitive advantage in serving large energy producers that promote LNG as a vehicle fuel. In practice, the company had to prove the LNG technology as reliable while competing in a service marketplace largely driven by low cost.
After four years, Green Energy has demonstrated that LNG vehicles are well-suited for oilfield services and has built a thriving business serving sites in southern and central Texas.
Green Energy provides water and other oilfield fluid transportation and also rents out frac, acid and mud tanks along with mud pumps. Its fleet numbers more than 600 total units.
“Our bread and butter is moving production water,” says Joe Monroe, CEO and president. “We haul the freshwater to a location to be used for fracking. We then take the contaminated water from the well site to an offsite disposal location.”
In addition to its headquarters, Green Energy has facilities in Marquez, Asherton, Gonzales and Three Rivers, Texas, and employs 230 people.
“The biggest area for us now is down in the Eagle Ford where basically every barrel of oil also produces a barrel of water,” Monroe says.
According to a fact sheet from Chesapeake Energy Corp., a single Eagle Ford well may use as much as 6 million gallons (125,000 barrels) of water per year between the use of drilling fluid (mud) and water used in fracking operations.
Lone Star Investment Advisors, a private equity group based in Dallas, started Green Energy in late 2011. The original plan was to operate specifically in the Freestone Trend area south of Dallas and exclusively serve one oil and gas producer with a three-year commitment.
The company originally purchased 60 brand-new LNG trucks, 54 vacuum trailers and 425 frac tanks. However, just as the equipment began to arrive in mid-2012, the scene in the Freestone — a primarily dry-gas play — took a dramatic turn.
Natural gas became more abundant, the price plummeted and the focus began to shift to crude oil. Soon, Green Energy’s exclusive customer pulled most of its operations out of the Freestone, dropping from 20-plus rigs in the area to two.
“The Freestone Trend continued to decline, business was drying up, and the base customer could not even utilize half of the equipment we had purchased,” Monroe says. “We immediately refocused the company.”
Knowing it had to take on more customers, Green Energy opened three yards in the Eagle Ford play and moved equipment to them.
“We’re still in the final stages of our initial startup with the hiccups in the beginning and our need to geographically diversify and customer diversify,” Monroe says. “We’re just now getting to 100 percent utilization and to the top level of our cash flow capabilities with our existing assets.”
GOING WITH LNG
The original 60 vehicles are heavy-duty Peterbilt LNG trucks with single 120-gallon fuel tanks, ordered through Rush Enterprises. Each truck came with a 15-liter Cummins engine converted from diesel to natural gas by Westport Power. Fifty-four of the trucks haul vacuum trailers (Dragon) and the other six carry winches for moving tanks.
In 2013 and 2014 Monroe bought 24 more trucks at a steep discount. These, with trailers from Galyean, have dual LNG fuel tanks that double their range.
An all-LNG fleet brought up one issue early on — fueling. There weren’t any fueling stations close enough to be useful, so Green Energy installed its own.
“Right now we’re single-sourcing the LNG from a plant Clean Energy runs in Willis, Texas,” Monroe says. “We pick up the LNG there every day, sometimes a couple of times a day, and deliver it to our five yards so our trucks can come and go at shift time and refuel.”
Maintenance was another challenge. The company’s team had to learn the new technology and work out the bugs with Peterbilt, Cummins and Westport.
The fuel delivery system posed issues of its own: The tanks couldn’t keep the fuel cold, and when it heated up it evaporated and vented out the top. Westport resolved the issue by modifying or replacing all the fuel tanks with an improved vacuum seal design.
“To date that has eliminated the loss of vacuum on the tanks and therefore the tanks do not heat up unusually fast,” Monroe says.
Green Energy had to feel its way as the first company to use such a large all-LNG fleet to provide oilfield services.
“I think it helped a little bit in that our fleet wasn’t 100 percent utilized early on, so we were not exposed as much as we would be today,” Monroe says. “When a truck goes down today we don’t make revenue with that truck. As we were going through those growing pains early on, we had a little bit of extra equipment to pick up the slack.”
Since the original bugs have been worked out, Green Energy has dealt only with regular preventive maintenance. That made the purchase of the second batch of trucks more attractive because they were built with the same engine.
“All of our mechanics can work on all of the trucks with no issues,” Monroe says.
When deciding on an LNG fleet, Green Energy’s founders hoped it would help attract customers — particularly the large energy companies that tout natural gas as a transportation fuel. However, that hasn’t happened quite as planned.
“The reality is that when it comes down to dollars and cents, they’re really looking for the lowest-price service provider,” Monroe says. “I think LNG was even a bit of a detriment because of the uncertainty and unproven track record of this type of equipment operating in the harsh environment of the oilfields.”
Monroe says Green Energy has proven the equipment’s capability, “But the people still aren’t walking the talk when they say everybody should be using natural gas as a transportation fuel wherever possible.”
Green Energy fuels its vehicles for $2 a gallon less than the cost of diesel. “So neglecting the slightly higher capital cost of these trucks, we should always be that lowest-cost provider,” Monroe says. “But we don’t want to give all of our margin away to the customer — we still need to make a profit ourselves.”
KEEPING TRACK OF IT ALL
With a fleet of 84 LNG-fueled vehicles, over 30 service pickup trucks and over 500 tanks, keeping track of the equipment is important. For that, Green Energy uses GPS technology from Geoforce.
“We’ve got over 600 pieces of equipment with trucks and vacuum trailers as well as frac tanks and every one of them has a GPS tracking device,” says John Renger, vice president of operations and commercial development. “With the trucks we have real-time tracking that shows right down to the second where it’s located and how fast it’s going.”
The frac tanks get pinged twice a day so the company knows where they are. The technology also helps in dispatching the equipment.
“A dispatch tool on the GPS model allows us to pick the most readily available, closest truck to the next location,” Renger says. “It works quite well and it saves us productivity and labor dollars.”
STILL A TRUCKING COMPANY
Monroe says the main goal for the company in the future is to focus on what it knows best, and that is trucking. He admits he thought about diversifying into saltwater disposal, but the company decided against that move.
“Our core business is trucking, focused on the oilfield fluid management,” he says. “That’s our core competency, that’s what we do best.”
The plan for the company is to grow through buying assets similar to those in hand and moving to new areas such as the Permian Basin.
“The biggest thing is we remain the premier company that’s 100 percent dedicated to using natural gas as a transportation fuel,” Monroe says. “We’re kind of all in this game and we’ve dedicated our knowledge base and our assets to this. We’ve proven that the technology works. We’re really walking the talk and putting our brains and money behind natural gas as transportation fuel.”