[CAT® OIL & GAS] Estimating Your DGB™️ Fuel Cost Savings

Chris Berrie: Hi, I'm Chris Berrie, a sales manager here at Caterpillar. Welcome to Cat® Power Podcast, a series of podcasts focused on various subjects within oil and gas. We've been talking a lot over the last year about Cat Dynamic Gas Blending or DGB engines. And the first question most people have is exactly how much diesel am I going to save by switching to these engines? The good news is that Caterpillar has launched a new tool that will give you real numbers based on your operation. I am joined today by Darin Bohlmann, Caterpillar's New Product Introduction Manager who's here to tell us more. Hi Darren, thanks for joining.

Darin Bohlmann: No problem. Thanks for having me.

Chris Berrie: Hey, pleasure. Before we dive into the details of the DGB Fuel Cost Estimator, why don't you give us a quick refresher on the DGB engines and the benefits?

Darin Bohlmann: Sure, Chris. DGB at Caterpillar stands for dynamic gas blending. In the industry, it's more commonly known as dual fuel. And basically what it is is a diesel engine that replaces a portion of the diesel consumption with natural gas. So for example, we just recently launched our new 3512E DGB Engine that can displace up to 85% of the diesel that it normally uses with natural gas. You get the same look and feel of the diesel engine. You get the power, the performance, the maintenance practices, but at today's low natural gas prices, you can save big on fuel costs. And in addition to the fuel savings, DGB engines also can deliver significant greenhouse gas emissions reductions, and they can run on a wide range of gases, including field gas, CNG, LNG, and pipeline gas.

Chris Berrie: Let's go back to the diesel displacement just for a moment. Can you remind us what that measures?

Darin Bohlmann: Sure. Diesel displacement measures the volume of diesel fuel that is replaced by natural gas. I'll give you a simple example. Let's say a typical frack engine uses 50 gallons an hour on average of diesel when it's doing its job. A DGB engine running at 80% average diesel displacement, which is not uncommon for our new 3512E DGB Engines, that engine in DGB mode would use 10 gallons per hour of diesel and 40 gallons per hour of natural gas. And I said gallons per hour, it's referred to as DGEs per hour, which is diesel gallon equivalent, and it's basically the amount of natural gas that has the same amount of energy as one gallon of diesel. So you're making an apples to apples comparison that way. The diesel displacement is a more accurate measure of fuel savings than diesel substitution, which is sometimes confused with the two. So that means at 80% you can save it, depending on what gas source you're using, you can save up to 80% of your fuel costs by switching to dual fuel from diesel.

Chris Berrie: The DGB Fuel Cost Estimator will calculate that displacement for you, right? Can you tell us a little bit more about the tool and how it works?

Darin Bohlmann: Sure. The BGB Fuel Cost Estimator tool is an online, web- based tool, can be used by anyone. To get to it you go to DGB. Cat. com. If you don't already have a, what we call a CWS, Caterpillar Web Security ID, and password, you can sign up for one right there at the website. After you've gotten signed up and gotten your account, it then takes 15 to 20 minutes to go through a questionnaire where you enter your operating conditions, your gas information, your fuel costs, and then it generates a report of your fuel consumption and your fuel cost savings for two engines that you're wanting to compare. And you can compare a DGB engine to its diesel counterpart. You could compare a tier two DGB engine with a tier four DGB engine. And for those not familiar with that terminology, tier two is our previous generation 3512C. It's just a different emissions model year. And you can create those reports in a PDF so that you can use them with your management or your customer or whoever you need.

Chris Berrie: That's awesome. Can you tell us a little bit more, what's in the report? I mean, what exactly do you walk away with?

Darin Bohlmann: Sure. You've chosen your diesel consumption with your diesel engine and your diesel and gas consumption with your gas engine, it'll break that out into gallons per hour or gallons per day. It'll also give you the dollars per hour or dollars per day. It'll tell you what your average diesel displacement percentage will look like based on your operating conditions. It'll document for you, what your fuel sample was, which is important when you're looking back at this three months later, maybe trying to compare actual results to what the analysis told you. It'll save all of those inputs for you and has that all in the report

Chris Berrie: Darren, I've seen other online calculators that claim to do a similar thing. How's Caterpillar's tool different to these?

Darin Bohlmann: Yeah, most online tools I've seen make some very basic assumptions about your current diesel consumption and then the expected percent diesel displacement. The problem is your actual displacement results will depend on your load conditions, on your operating temperatures, your altitude and it'll definitely depend on exactly what's in your natural gas, how much methane, how much propane, how much ethanes and butanes and all of those. And field gas in particular can be very different from one well to another. Or if it's from a flare or from a processing plant, those factors can significantly impact your overall fuel savings. So these very simplified cost calculators just don't capture all of that. Our tool lets you input all of those conditions, it lets you input a detail gas sample analysis and all of your other inputs and it calculates a more accurate cost savings estimate that way.

Chris Berrie: Yeah, sounds much more comprehensive than those other tools. You also mentioned that the DGB Fuel Cost Estimator analyze customer provided data. What kind of information should you have on hand ready to enter into the tool?

Darin Bohlmann: Sure. There's standard assumptions in the tool that you can choose from, but the more specific details you can provide about your operating conditions and your gas, the more accurate your estimate will be. So to get the most accurate estimate, I would recommend having four basic pieces of information. First is the fuel sample analysis. And that's, like I described, tells you exactly what's in your natural gas. The second one is a load profile, and there's a standard load profile in the tool that's pretty representative, but a lot of people are running very different load profiles with zipper fracks and other innovative operational things. So it's really best if you can get your own load profile from a current job. You can get that by going out and observing, talking to your completions engineer, but probably the best way to do it is if you can, with a service tool, plugin to a Caterpillar engine and download what we call an ECM download from the engine that will give you a histogram that shows you exactly what that load profile looks like. The third bit of information that you'll need is your site information and specifically altitude and ambient are the two major inputs for your site information that will impact your savings. Then the fourth is of course your fuel costs, the cost of your diesel and the costs of your natural gas. I would caution people to not just use market prices or some rule of thumb price estimates, because a lot of people overlook what can be sometimes significant delivery costs and handling costs, or in the case of natural gas, even the cost of putting in a pipeline or something like that.

Chris Berrie: Okay. So let's say I've got this information and I'm ready to calculate my fuel savings numbers, anything else I need to know about the DGB Fuel Cost Estimator?

Darin Bohlmann: No. If you've got that information and you go to DGB. Cat. com, the rest should be pretty self- explanatory the first time you go through, it takes a little bit of getting used to, but then I can get new analysis done in five minutes or less. If you need extra help, you can contact your Cat dealer and they can help you through the analysis, the tool. And then, if you like what you see in terms of the savings, you can talk to your dealer about options for upgrading your tier two engines or your tier four engines and the different kits and upgrades that are available to get a DGB system into your operation.

Chris Berrie: Fantastic. Well, Darren, thanks again for your time today and taking the listeners and myself through this exciting new tool.

Darin Bohlmann: Sure, Chris. Thanks for having me.

Chris Berrie: For more information about the DGB Fuel Cost Estimator, visit Cat.com/OilAndGas and follow us on LinkedIn or Facebook at Cat Oil and Gas. Thanks again and see you soon.