Electricity in Oil Fields - Relative Advantages and Costs of Electric Power in Lease Operations (with Discussion)

The production of crude oil in the United States is exceeding consumption by one-quarter million barrels per day and, with the possibilities of West Texas, this condition of overproduction, unless controlled, is likely to continue for some time. The resulting low price of oil has caused the operator to observe closely his lease operating costs. The installation of more efficient and reliable machinery has followed and it can well be said that the art of producing oil is on the threshold of a new era. In this advancement electricity has played a leading part. This paper covers only the problem of electricity as applied to lease operation and does not consider other phases of the industry, such as drilling and pipe-line pumping, in which electric power has been utilized economically. In considering electrification of pumping wells, the first question the operator asks is whether or not his costs will be reduced and the second question is whether or not the production will be increased. The third question, although in effect it is closely allied to the first, is the cost of power. The last question can be answered only after a thorough analysis of operating conditions and a study of the power rates prevailing in the particular field under consideration. Within the past few years, the power companies have realized the desirability of a steady 24-hr, pumping load, have made their rates for oil-field service particularly attractive, and in general have shown splendid cooperation in assisting the oil companies in the satisfactory application of electric power to their leases. When everything is taken into consideration, the first cost is practically the same for electric drive as for gas engines when pumping on the beam with individual motors. This cost, at prevailing prices, should aver-age approximately $2200 to $2400 per installation when using 15 to 35-hp., two-speed pumping equipment, including motor and control, countershaft, motor house, belt, installation charges, and a prorated portion of the cost of transmission lines and transformers for serving a number of wells. Since there is practically no difference in the cost of the two installations, it is evident that electricity, to justify its consideration, must have a lower operating cost or produce more oil.