Friday, June 20, 2014

Well Power Inc. (WPWR) Flare Gas to Fuel/Energy Hardware Ahead of the CO2 Game, Ideal On-Site Fracking Power Supply

Well Power ‘s partnership with Micro-Refinery Unit (MRU) license holder MEC Resources puts the company exclusively in charge of distributing the technology in Texas. This incredibly flexible and customizable MRU system is a unique configuration of proven commercial technologies with a proprietary reactor at the core. The MRU can handle up to 250 Mcf flows of otherwise flared gas, converting it to CO and hydrogen, then condensing that Syngas to Green Fuels™ (diesel, diluents, synthetic crude) or turning it into electricity.

Instead of burning up money, operators can produce viable fuel or even energy on-site with Well Power’s MRUs, a platform which simultaneously slashes carbon emissions. Reducing carbon pollution will become increasingly important as the hammer of the EPA’s new Clean Power Plan regulations comes crashing down by mid-2016, forcing states to impose enforceable carbon pollution targets per megawatt hour of electricity produced on power companies. These regulations will likely send energy prices up across the board, making highly localized solutions like the MRU particularly attractive to oil wells that are under increased scrutiny. Compelling market dynamics when one considers that flaring in the U.S. was up 223% percent from just 2007 to 2011 alone according to World Bank statistics, topping out around 251 Bcf, firmly in-line with more recent EIA data.

Railroad Commission of Texas Commissioner, Christi Craddick, issued heads-up letters in early February of this year to operators in the state that the Commission would enforce existing state flaring rules. Rule 32 flaring regulations allow burning off excess natural gas at no charge during and up till 10 days after drilling, with a permit of only 180 days potentially acquirable thereafter. The Railroad Commission’s own figures indicate a 462% rise in the number of permits issued in 2013 when compared to just two years prior, an obvious barometer of the considerable drilling activity which has transpired thus far and a further indicator of how the flare gas game is going to play out in Texas.

This was a clear warning to Texas’ burgeoning oil sector and it sent shockwaves through the Eagle Ford Shale community, where oil production has skyrocketed in the last half decade to over 670k BOPD last year alone. A recent projection by energy consulting agency Wood Mackenzie sees another massive jump on the horizon as well and the agency is targeting a figure of 2M BOPD by 2020 from the Eagle Ford, which incidentally managed to beat the Bakken to the 1M BOPD goalpost only eight months ago.

The Railroad Commission is tipping its hand here to sector operators that the time has come to double down on precisely the sort of green fuel MRU processing technology WPWR has exclusive license to in Texas. Moreover, because the MRU systems are skid-mounted mobile platforms that are also scalable, they represent a modular way for even remote wells to turn otherwise wasted (soon increasingly costly) flared gas into energy that can even be used to replace expensive diesel-driven fracking machinery.

Early last month Well Power indicated that they are also moving to expand their license with MEC and address the same flaring problems Texas has, in states like North Dakota and Wyoming. In North Dakota, where fracking has also caused a boom, nearly 30% of the gas is being burned off due to lack of infrastructure development having kept up with output capability. This makes another extremely ripe target for WPWR and investors should note that North Dakota is already eyeballing the roll out of a tax royalty to operators who implement green solutions to flaring.

For more information, visit www.wellpowerinc.com

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