[Oil & Gas White Paper] Optimizing Pipeline Energy Consumption

Make the most of your energy SM

Optimizing Pipeline Energy Consumption 2010 / White paper

Summary

Executive summary .................................................................................... p 1

Introduction ................................................................................................ p 2

Part 1: While energy management is challenging,

it grows more vital for pipeline businesses .................................................. p 4

Part 2: Knowing current and future costing

scenarios helps identify savings opportunities ............................................. p 8

Part 3: System-wide solution returns efficiency savings

and supports enterprise safety, security, and

environmental responsiblity ......................................................................... p 13

The Schneider Electric solution ................................................................... p 16

Conclusion ................................................................................................. p 18

Executive summary

White paper on Pipeline Management | 01

Optimizing Pipeline Energy Consumption

Effective energy management can benefit the hydrocarbon pipeline operator.

Energy consumption costs – the leading expense for most operators – are rising

continuously; however, the commitments needed on the part of the operator often

impede implementation of energy-saving practices.

Key to effective energy management is the ability to quantify energy consumption

accurately at any specific time and its cost and that of drag reducing agent (DR)

use. Operators committed to energy management can implement a real-time,

system-wide power optimization solution that evaluates the resource efficiency of

a steady-state model of the pipeline. This solution will also perform costing runs of

alternative configurations, formulated for the next energy cost rate or other ‘what

if’ scenarios, in order to find the most energy-efficient alternative that maintains

operational safety and integrity. Implementing these alternatives, the operator can

save one percent to five percent of energy costs and reduce carbon emissions.

This advanced information management technology makes these costing

considerations so practical they can become a routine, real-time operations

process. Putting available information to work with this solution can make power

optimization extremely realistic and highly rewarding for the company while

supporting overall operational security, safety and environmental stewardship.

Cost savings and environmental stewardship through effective energy management

Introduction



Electric energy transmission and distribution networks are becoming ‘smarter’

through the use of highly available data about the status of the grid – data that

helps support more efficient operations and business processes. More and more,

the concept of a ‘smart grid’ appeals to pipeline operators as well: they face

significant internal and external drivers to use pump and compressor energy more

efficiently and reduce their ever-increasing energy consumption costs.

Real-time operations data, already available in a pipeline SCADA system, can help

examine current energy consumption and test alternative operating scenarios

for improved cost efficiency. This information is highly revealing and can help

overcome the challenges of energy management for today’s pipeline operator –

and support benefits across the enterprise.

Reducing operating costs up to five percent or more



With hydrocarbon pipeline networks becoming more complex and operations

more complicated, operators must address long-standing operating challenges:

• Safety of people and property

• Delivery commitments

• Regulatory requirements

• Reducing emissions for ‘greener’ operation and carbon credits

• Social responsibility and good stewardship

Operators typically have placed priorities on meeting commitments, complying

with regulations, and satisfying safety and security concerns; their control room

personnel have focused on the real-time dynamics of batch scheduling, pipeline

hydraulics, contracts, and current and forecasted operating conditions. In many

cases, energy consumption has not been a leading issue for the company.

However, the cost of the energy required to operate the pipelines – already the

leading expense for most operators – is rising continuously and now ranges from

40 to 65 percent, or more, of total operational costs. Added to the rising energy

consumption is an increase in carbon emissions of each pipeline.

Energy management has become more significant for the pipeline operator, not

only as a standalone cost issue but also as a process that can help accomplish

other operational and business goals.

Part 1: Optimizing Pipeline Energy Consumption

It’s all about cost reductionPower optimization doesn’t necessarily target

reduced energy consumption; instead, it

targets the cost of the energy consumed

during pumping operations. Simply, it

determines the energy (KW) and cost ($) of

a pipeline’s operation at a specific moment

in time and then uses this information to

determine the optimum pipeline pump

configuration and drag reducing agent (DRA)

injection rates that would minimize cost.

Energy consumption costs commanding attention

While energy management is challenging, it grows more vital for pipeline business



What pipelines would benefit from energy management?

Each pipeline operates in a different manner and will realize cost benefits at

varying levels. Some of the operating factors that are considered in power

optimization include:

• Duty cycle of the pipeline

• Length of pipeline; does it transverse different states or multiple energy

rate contracts?

• Number and types of products in the pipeline

• Number of stations on the pipeline and alternative operating modes

• Use of drag reducing agent (DRA)

• Current maintenance status of the pumping units

• Overall energy management program of the pipeline

Pipelines that run at 100 percent capacity or with less complex contracts have

fewer options for energy consumption improvement, since at least one pipeline

segment generally has pumps running at their highest capacity and/or DRA

is injected at its highest rate. Yet, even this pipeline can benefit from power

optimization, as other sections of the pipeline likely still have options for pump

status selection and/or DRA injection rate.

Benefits are both tangible and creditableBy committing to a power optimization

program that allows documentation of

energy usage and savings, a pipeline

operator reduces electricity consumption

and associated costs and emissions. This

approach not only reduces bottom-line

expenses, it also generates carbon credits

that can be sold or traded on the open market

per industry and/or government regulations

or applied to help meet overall carbon

footprint limits – and reap the marketing

benefits of being a ‘green’ organization and an

environmental steward.



The challenges of effective energy management

Energy management requires a comprehensive commitment on the part of

the company to:

• Dedicated resources—the operator must be willing to invest in the

appropriate personnel, skills, and technology tools.

• Planning and scheduling—the operator must look at energy

management as a comprehensive component to management

and not let obligations to satisfy shippers and customers

overshadow the effort required to plan and schedule the energy

required.

• Real-time monitoring and optimization—to effectively manage

energy use, the operators must have timely pipeline information,

a responsive calculation solution, and the means of implementing

the recommended functions.



Schneider Electric leads the waySchneider Electric has developed suites of

management software for pipeline and power

industries around the world, providing them

innovative solutions for real-time monitoring

and control that support operational

efficiency, safety, and security. The company’s

Energy Management Application Suite (EMAS)

includes the proven Power Optimization

solution that gives pipeline operators and

energy managers access to precise energy

cost data to help them make confident

decisions that optimize energy efficiency and

batch scheduling, improve the bottom line,

and reduce carbon emissions. Contact us for

more information.

While challenges exist, the benefits possible with an effective energy

management solution can extend across the company’s operational and

business positions.

Internal drivers:

• Implementing best operating strategies through controllers and

energy managers

• Being able to quantify energy costs in real time and optimize

operation in real time

• Instill innovation and improvement in operating processes involving

equipment, procedures, and business decisions

External drivers:

• Regulations likely to target energy efficiency in the near- or mid-term

• The company’s image as environmentally friendly

• Incentives offered by power providers to large consumers for rate

structures that will help the provider meet demand without additional

generation

• Carbon credits earned through reduced carbon outputs

• Improved profitability for shareholders

Opportunities



It is vital that the operator know its operating costs at any particular time. With

this knowledge, the operator can quickly and confidently make operating

decisions that support both energy efficiency and operational integrity.

In addition to current conditions, other cost and operating scenarios can be

considered:

Cost of proposed, or ‘what if’ configurations for the real-time state identifies

the cost of a modified configuration, at the current time or at some future time.

This costing category gives the operator a chance to evaluate a different pump

configuration before actually implementing it, to determine if it would reduce

energy cost –

• Investigate pumping schedules using normal pump rates when the

utility charges low time-of-day rates, or

• Choose to use more power to drive faster pumps for priority orders,

while still spending less on the energy required.


Optimize configuration for current conditions

Knowing current and future costing scenarios helps identify savings opportunities



Cost of an optimized configuration identifies the cost of an optimized

configuration with the current conditions and time –

• Learn to sequence jobs in order of individual demands. With fewer

pump starts and stops and a more consistent usage pattern, the

operator minimizes usage spikes and their associated penalties.

• Consider pump performance to identify the most efficient

configuration that can accommodate extra load at least cost; see

Figure 1.

• Factor personnel costs to determine if an ‘overtime avoidance’

strategy is counter-intuitive to one using less power but more

personnel hours.

Optimize configuration for current conditions (continued)

Figure 1Evaluating pump performance to identify pump head and pump efficiency shows flow rate varied from 3172 to 4418 bbls/hour, pump speed varied from 62 percent to 87 percent, pressure varied from 478 to 970 psi—all revealing that average absolute error on pressure was 2.2 percent and efficiency was 1.4 percent.



Top three ways to optimize pipeline energy costs • Know your present operating costs and

how costs change with demand charges

• Identify optimal pumps, and minimize

pump throttling

• Identify optimal DRA injection locations

and rates. Most companies follow

generic guidelines and don’t even

consider pipeline status when making

DRA injection decisions. Taking into

account the effectiveness of the DRA,

the cost of the DRA, the increased

throughput, and the resulting power

savings helps determine the best DRA

flow rate based on current conditions.

Demand charges can significantly increase energy rates for prolonged periods

of time, and the operator should avoid them as a matter of practice. Knowing

when a costly energy rate transition is approaching would give the operator the

ability to minimize the impact of the higher energy and/or demand level:

• Early Warning for the real-time state – knowing the cost of the

current configuration at the next energy rate boundary; it tells the

operator what the cost will be if no configuration change is made.

• Early Warning optimized – knowing the cost of an optimized

configuration at the next energy rate boundary

• Early Warning optimized at current time – knowing the cost of a

future optimized configuration at the current time

Solution options

So what can the pipeline operator do to make energy use more efficient?

Efficient equipment.

Certainly, pumps, compressors, and other vital transportation pipeline assets

are becoming more efficient and will continue to evolve in their capabilities.

High efficiency equipment can cut costs on a site-by-site basis, but it does not

provide a solution for system-wide optimization. By having to continuous invest

in new equipment, the operator is minimizing returns.

Information management technology.

In commodity delivery networks everywhere, including water systems

and electric and gas power distribution systems, operations are not only

becoming more complex but they also are losing experienced personnel to

retirement. Veteran employees take with them innate knowledge of manual

network management. Enter their replacements: a generation groomed in the

technology era and ready to embrace information management tools that give

them similar decision-making knowledge.

Cost control scenarios also look ahead

Optimizing Pipeline Energy ConsumptionOptimizing Pipeline Energy Consumption


Figure 2Advanced technology can create a steady-state model of the pipeline that gives the operator accurate simulation of the real-time operating state.

Network awareness through simulation

Many pipeline operators are now using or

investigating state-of-the-art business technology

for responsive, even proactive, pump operations

management. This solution involves an integrated

suite of tools that creates a steady-state hydraulic

model, integrated with and leveraging real-time

information from the pipeline SCADA system. This

technology provides operators highly accurate

pipeline state calculations, including KW consumption

of the pumps that mimics the utility’s own demand

recorder; see Figure 2.

4

model, integrated with and leveraging real-time information from the pipeline SCADA system. This technology provides operators highly accurate pipeline state calculations, including KW consumption of the pumps that mimics the utility’s own demand recorder; see Figure 2.

[caption] Figure 2. Advanced technology can create a steady-state model of the pipeline that gives the operator accurate simulation of the real-time operating state. Integrated with the model is a calculation component that uses the energy provider’s rate contracts to provide accurate, up-to-the-minute energy costs of the current configuration based on:

• Energy brackets • Demand, energy, fuel rates, and spot pricing • Ratchets, time of use (peak, off peak, holidays, weekends); see Figure 3.

This approach also facilitates the calculation of ‘what if’ or alternative costing runs and future costing scenarios, making these costing considerations practical and effective in energy management.

Optimizing Pipeline Energy ConsumptionOptimizing Pipeline Energy Consumption


Integrated with the model is a calculation component

that uses the energy provider’s rate contracts to

provide accurate, up-to-the-minute energy costs of

the current configuration based on:

• Energy brackets

• Demand, energy, fuel rates, and spot

pricing

• Ratchets, time of use (peak, off peak,

holidays, weekends); see Figure 3.

This approach also facilitates the calculation of ‘what

if’ or alternative costing runs and future costing

scenarios, making these costing considerations

practical and effective in energy management.

Figure 3Accurate modelling of the pipeline not only reflects the physical world but also incorporates the complex utility contracts involved, to accurately calculate the real cost of the pipeline via the commercial rate profile at any given time.

Network awareness through simulation (continued)



To serve as a practical system-wide solution – and, therefore, be most effective in

delivering energy savings – a pipeline power optimization solution must integrate

the tools and data sources that will:

• Summarize the cost of the current configuration

• Offer an optimized operational scenario accommodating current

conditions and requirements

• Perform costing runs to alert of approaching rate transitions

Below are the components that, when integrated, deliver this comprehensive

capability –

Real-time information. This key element of the solution interfaces with the

pipeline’s supervisory control and data acquisition (SCADA) system, acquiring

from the SCADA real-time data such as pressures, temperatures, flows, pump

and valve status, and – if available – kilowatts. This approach allows system-wide

energy optimization, compared to site-specific optimization that high-efficiency

pumps implement.

Simulation software. The solution then feeds the real-time data to a steady-

state model, or pipeline simulation, that merges state-of-pipeline data with

critical business information. This high-fidelity simulation model calculates costs,

generates the optimized solutions, and maintains ‘tuning’ information to keep

the simulation an accurate model of the real world. The realistic pipeline-state

calculations created signal the cost-savings value of altering specific conditions.

A system-wide solution returns efficiency savings and supports enterprise safety, security, and environmental responsibility


Comprehensive problem solving requires fully integrated solution



Costing element. This module uses actual utility contracts that include support

for both demand and energy components, seasons, fuel costs, and time-of-

day parameters. With this information, the module very accurately calculates

the cost of operating a station at a particular time and assures that the best

optimization decision is being taken; see Figure 4.

Figure 4A real-time power optimization solution calculates operating costs of different pumping scenarios.

Comprehensive problem solving requires fully integrated solution(continued)



The simulation uses this information to generate the current costs; it also

compares costs of alternate pipeline configurations to determine the optimal

option for the current pipeline state. An additional interface factors future pricing

to warn of approaching costly rate transitions. This module even supports spot-

pricing from the utility through online downloads; see Figure 5.

Demand recorder element. This element manages the database that stores key

data such as kilowatt information for each demand interval on a per-pump or

per-compressor basis. It mimics the power utility’s field demand recorders that

generate the interval data driving the utility’s brackets and demand charges.

Sequencer module. This module coordinates simulation information: pipeline

current state calculations, potential optimization, early warning, and operator or

engineer ‘what-if’ scenarios.

Web based GUI. All runtime displays are delivered through web-enable

technology, enabling the user experience to be fully within the browser while

providing engineering with a full-featured desktop application.

Figure 5Detailed cost run results clearly display the differences between how the is pipeline running versus how it could be running – all to minimize energy consumption costs.

Comprehensive problem solving requires fully integrated solution(continued)



Schneider Electric’s Energy Management Application Suite (EMAS) – Power

Optimization solution was developed in close cooperation with major industry

operators to ensure it addresses all the operational needs and enterprise goals

discussed above. It seamlessly integrates real-time operational parameters

from the system SCADA with simulation software, a costing element, demand

recorder, sequencer module, and web-based GUI to accurately identify current

and optimized configuration scenarios. This approach has shown to help

energy managers fine-tune power consumption and reduce operating costs

by 1 percent to 5 percent or more, depending on pipeline characteristics and

complexity of the operator’s contracts.

The Schneider Electric Solution

Power optimization in the control roomA power optimization application using

real-time information can provide

recommendations on:

• Present situation – a cost summary of

the current configuration at the current

time

• Early warning – alerts that summarize

the current configuration at the next

rate boundary and help avoid costly rate

transitions

• ‘What if’ scenarios – cost summary of

a modified configuration at the current

time or at some future time

With this meaningful, real-time information,

controllers use their expertise to implement

the safest, most cost-effective processes.

Energy managers will want to work with

controllers to help them migrate from routine

operational decisions to those that also can

make significant energy-saving impacts.



Power optimization for the Energy ManagerWhile the fully effective Power Optimization

solution provides real-time feedback to

operations personnel, the engineering

platform can leverage the same technology.

In this mode, the Energy Manager, along with

Engineering, can

• Review various potential physical

pipeline changes

• Consider different pipeline operating

procedures

• Evaluate different rate schedule

structures to help negotiate favorable

new power contracts

In short, the same tool that helps control

current energy consumption can help plan

improvements in future energy usages.

Because it reflects Schneider Electric’s industry-leading expertise in information

management and its decades of solutions partnership with pipeline operators,

the EMAS Power Optimization solution is complete, reliable, and designed to

serve future energy management needs of the hydrocarbon pipeline industry.

Contact Schneider Electric for more information about the EMAS Power

Optimization solution.

The Schneider Electric Solution (continued)

Conclusion



Power optimization solutions in a nutshell:

• A system-wide power optimization solution gives the pipeline operator

valuable insights into energy spending. The operator schedules jobs based on

predictable rate schedules, sequences jobs in order of demand while avoiding

rate spikes, and favors more economical assets when accommodating extra

load.

• While improving business efficiency, it can reduce system-wide power

consumption by as much as 20 percent and save significant operating costs.

The operator can use the historical calculated energy costs stored in the

application’s demand recorder to calculate accurate energy brackets and

demand charges. With this information, the operator then forecasts future

energy consumption based on varying operational modes and can more

effectively negotiate energy rate contracts with its provider.

• Reduced power consumption can generate carbon credits for the operator

as defined by the government. As trading or selling of carbon credits grows

throughout North America, operators using a power optimization application will

be in a good position to document energy saved and the carbon credits earned

that can be sold, traded, or applied to reduce the operator’s carbon footprint.

• The real-time information continuously available through an energy management

application identifies significant operating constraints such as pump capacities,

maximum operating pressures, slack line conditions, and DRA effects. This level

of real-time information helps the operator stay on top of operational safety and

the security of network assets.

Long-term savings with controlled energy consumption

©20

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August 2012

Schneider Electric USA

10333 Southport Rd SW, Ste 200 Calgary, AB T2W3X6 Phone: 1-403-212-2407Fax: 1-403-259-2926http://www.schneider-electric.com

[Oil & Gas White Paper] Optimizing Pipeline Energy Consumption

Technology

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