In Bakersfield, everything is connected to oil. Everything from the historic “Driller Country” water tower to pump jacks sprinkled near local parks tell of our county’s oil legacy.
The recent volatility in oil prices has made this connection even more striking. Although Kern County is no stranger to the booms and busts of the oil and gas industry, this most recent bust has certainly taken its toll. From $100 a barrel in June 2014 to $27 a barrel in January 2016, our community has felt the strain of the worldwide oil rout. And with good reason: Kern is the second-largest oil-producing county in the nation, representing 70 percent of California’s oil production and 4 percent of overall U.S. production.
The job market in Kern County was hit especially hard, with major oil and gas companies, along with much smaller producers and service firms, having to let many workers go. In the two years following June 2014, Kern County’s oil industry lost a third of its workforce according to data collected by the state’s employment development department. And with the majority of the industry predicting “lower for longer” oil prices, we anticipate oil prices ranging anywhere from $40 to $60 in the foreseeable future.
Although the future price of oil is unsure, one thing is for certain: The only way for oil companies to survive is through cost reduction. By cutting operating costs, oil producers will survive and thrive amid today’s low oil price environment.
As the saying goes: When the going gets tough, the tough get going.
The easy oil has already been recovered. Mature fields are depleting and oil extraction is becoming more expensive and energy intensive. Today, the majority of California’s reserves are thick, viscous crude (known as heavy oil), which is difficult and costly to produce. The leading method of producing heavy oil is steam injection, a type of thermal enhanced oil recovery that injects steam into a reservoir to heat the oil, making it easier to pump to the surface.
Steam generation for thermal EOR is one of the major costs associated with the production of California oil. The high cost is because of natural gas, which is typically purchased and imported from out of state as fuel to burn for steam generation.
Considering 60 percent of the cost of operating a heavy oil field is fuel purchase for EOR, we must explore alternative solutions to delivering steam. One of the most effective of these innovative solutions relies on California’s other abundant natural resource: sunshine. Solar adoption is growing exponentially and exciting new applications are being deployed just about everywhere — including the oil field. By harnessing the power of the sun to generate steam needed to produce oil, California operators can reduce costs, create local jobs and reduce emissions simultaneously.
GlassPoint Solar is a premier example of what next-generation, homegrown energy technology can deliver to traditional energy producers. Instead of importing natural gas from outside California, we’re partnering with local oil and gas companies to generate steam from California’s ample sunshine — keeping operating jobs and tax revenues here in Kern County. By reducing the need for fuel, solar steam reduces the largest and most variable part of thermal recovery production costs and will expand and preserve oil field operations.
In February 2011, GlassPoint unveiled the world’s first commercial solar EOR project at Berry Petroleum’s 21Z property in western Kern County. Built in less than six weeks, GlassPoint worked with local firms TJ Cross Engineers (now Parsons) and PCL Industrial Services to build and integrate the solar system with existing surface facilities. The success of the pilot here has led to much larger projects overseas.
Other oil and gas leaders, like Seneca Resources Corporation, are also harnessing the sun to offset electricity costs and emissions. The company recently installed solar photovoltaic panels to offset 20 percent of its total electric costs at the North Midway Sunset oil field.
The convergence of traditional energy and renewable energy may sound bizarre, but if we take a step back and look at the history of innovation in Kern County and its “all of the above” energy strategy, the adoption of solar in the oil field makes a lot of sense. Kern is already home to some of the largest solar plants in the Mojave and America’s largest wind farm in Tehachapi, in addition to major oil reserves.
In fact, the whole process of steam injection was invented here in the 1960s. And today, steam injection is the most widely used form of enhanced oil recovery, deployed all around the world, from Canada to the Middle East to China, to increase production from aging wells and recover more complex resources.
Now Kern is yet again at the forefront of energy innovation in pioneering solar-powered oil production.
This energy convergence — merging renewables with traditional energy — is making use of hydrocarbons in a cleaner and more efficient way. In turn, California can unlock more natural resources to establish new industries, create jobs and reinvigorate domestic energy production.
Bakersfield is not just a “driller’s country,” but a melting pot for innovative energy solutions, where the tried-and-true stay and innovate as technology progresses.
— Tunde Deru is the director of sales, Americas, for GlassPoint Solar, the leading supplier of solar for the oil and gas industry. Based in Bakersfield, Tunde was previously the technical team lead for major projects at LINN Energy (formerly Berry Petroleum).