Campus: CSU Fresno -- October 21, 2005

New Oil Technology Answers Old Air Problems

Electric Downhole Steam Generation process will improve oil production, cut air pollution

A new revolutionary technology for heavy oil production that could stem the decline of or even increase California's heavy oil production as well as have a worldwide impact on the present process of producing oil -- Electric Downhole Steam Generation (EDSG) -- was announced today by EDSG Systems LLC of Newport Beach and California State University, Fresno.

Among the benefits of the new EDSG technology is that it would decrease air pollution that is an issue of particular interest to San Joaquin Valley residents and reflects Fresno State President Dr. John D. Welty's vision of the university as a catalyst for improving the Valley's air quality.

The new technology was developed by EDSG Systems LLC and refined at Fresno State with the help of the university's College of Engineering and the International Center for Water Technology.

To date, the engineering college has provided facilities on campus for the demonstration and advancement of this technology -- setting up what officials call the EDSG Certification Center where the units can be operated (certified) in order to ensure a quality installation before they are deployed to the field.

In the next year, EDSG LLC and Fresno State will work together to refine final engineering and the manufacturing phase of the product so that it is ready for the heavy oil market by 2007, said John Donohue, retired president of Unocal's North American Operations and current chief executive officer of EDSG Systems, LLC.

Donohue explained that Electric Downhole Steam Generation uses an advanced process to create the steam necessary for production from a large portion of California's oil fields - improving on the present oil industry use of centrally located surface boilers that, among other things, create air pollution.

Instead of using boilers for steam production, EDSG produces steam from electricity, resulting in nearly 100 percent efficiency at each steam injection well. That eliminates steam energy losses from the existing steam pipes and enhances the accuracy of steam deployment to the heavy oil formation.

"This revolutionary technology provides the heavy oil industry the opportunity to continue providing oil to consumers worldwide, with no air emissions," Donohue said. "This is the logical next step in heavy oil production and can actually increase existing production. Utilizing the EDSG technology, we can continue to provide heavy oil production while keeping the air clean."

Dr. Andrew Hoff, interim dean of the College of Engineering, said the Electric Downhole Steam Generation system is another example of close collaboration between the engineering college and the creators of new technology that will benefit the region.

"The clean air approach to steam generation in heavy oil production underscores how universities and their partners can make significant contributions to improving the air quality of the San Joaquin Valley," Hoff said.

In addition to providing the infrastructure to support the EDSG Certification Center, Fresno State's water center will work on methods of reducing water requirements for oil field steam production.

The College of Engineering would also use a newly proposed project, the Advanced Manufacturing Center, to assist by providing expertise in developing pilot manufacturing processes and activities for the EDSG technology. Through the proposed center, the university could help companies like EDSG enhance their manufacturing capabilities.

The EDSG technology was developed in a lab in Texas. EDSG LLC decided to move it to California to set up pilot manufacturing in collaboration with the College of Engineering, through its proposed manufacturing center for eventual field deployment to the oil fields of California.

In particular, Donohue cited several factors for locating the technology at Fresno State: the heavy oil production in the Central Valley, the air quality issues in the basin, and that a regional university in the area, Fresno State, had both a College of Engineering and a water center.

Donohue said the potential gains from this new technology could have a worldwide impact on the present process of producing oil.

He explained that heavy oils are crude oils that flow much like molasses or tar and will play an ever-increasing role in the future of oil production. The world's heavy oil reserves are very large - more than five times larger than the known reserves of conventional oil in the Middle East and around the world, he noted.

"Fortunately, the greatest share of those reserves is located in the North and South Americas," Donohue said. "Unfortunately, the poor flow characteristics of heavy oils make them very difficult to produce."

Steam injection is the preferred production method, Donohue said. Heavy oil is heated by injecting steam into the reservoir, which allows the oil to flow more freely to production wells. The heated oil can then be pumped from the underground heavy oil formations.

"The surface boiler's three major drawbacks are the local generation of air pollutants due to combustion, the loss of steam energy as the steam is transported by surface steam pipelines from the central boilers to each steam injection well and the high cost of installing boilers and steam distribution pipes, "Donohue said.

Producing steam from electricity through the new EDSG will overcome those drawbacks, he said.

"The Electric Downhole Steam Generator's zero air emissions and significantly lower capital costs will provide the opportunity for effective oil production in many new locations previously not economically practical," Donohue said. "This adds up to a win-win situation: a technology with the potential to stem the decline and increase California's heavy oil production, doing so with zero air pollution for San Joaquin Valley residents."

For further information regarding the Electric Downhole Steam Generator technology, contact Donohue at 661.309.7751. For Fresno State's role in the project, contact Hoff at (559) 278-2500. Updates are available at www.FresnoStateNews.com.

Contact: Tom Uribes (559) 278-5366 or 246-1717


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