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Historically, the words "conservation" and "proration" were often used synonymously - an activity that limited profit. The word conservation as used herein denotes a strategy that minimizes energy consumption per unit of energy produced. If performed wisely, this strategy may produce greater profit while conserving precious supplies of hydrocarbons.
Summarized herein are some general criteria for developing conservation programs as well as several examples of specific applications.
Conservation of energy is a new strategy for everyone . . . including the petroleum industry. Like any new game, it involves a change from familiar, comfortable habits of long standing.
Conservation has several facets. One is the mere reduction in the amount of energy consumed. This has received widespread attention in the news media and is now becoming part of the strategy of petroleum operators. part of the strategy of petroleum operators. A second facet involves increasing the value of net production. The energy consumed might not change - or may be even increase - but the amount consumed per unit of production would diminish.
Regardless of the situation, conservation of energy will increase capital cost, but should reduce operating cost. The problem is to evolve a strategy that minimizes total cost per unit of time or per unit of production.
Fig. 1 shows the type of result that is often attainable. The "variable" shown on the abscissa is any factor that governs both capital and operating costs. It might be a pressure, a temperature or an approach in a heat exchanger. The capital cost is amortized on a per-unit basis. The total curve is the sum of capital and operating cost curves.
An analysis like that shown in Fig. 1 should be a part of specification preparation and review of quotations.
Conservation does not necessarily involve a higher capital cost, but that is the normal situation. This may reduce rate-of-return when figured by traditional methods, which are unduly sensitive to initial cost. This is not critical for these methods are inadequate yardsticks - when used alone - to optimize modern production systems.
Most of the standard, off-the-shelf production equipment was designed in a time when production equipment was designed in a time when concern for energy consumption was minimal . . . or nonexistent. The usual fuel was a natural gas which often had little, or no, assignable value. Equipment vendors knew that equipment would be purchased on capital cost alone.