It’s a marriage of two energy solutions that seem to be philosophically at odds: using solar power to retrieve heavy oil. Yet, the world’s largest solar plant is now being built exactly for that purpose. In the Amal oil field in Oman, the new facility pioneered by California-based GlassPoint and Petroleum Development Oman (PDO) accesses an ample amount of sun to revitalize mature oil fields containing predominantly difficult-to-retrieve heavy oil. This project is swiftly proving that solar enhanced oil recovery (EOR) is a viable and economical solution to an urgent problem.
“Heavy oil [represents] 66% of all the oil that is left in the world,” John O’Donnell, the Vice President of Business Development for GlassPoint, tells The Fuse. “No one is doing ‘nice-to-have’ projects. They’re doing ‘must-have’ projects…The oil and gas industry is the next big thing for the solar industry.”
Oil and natural gas production are central to the Omani economy. The country is the largest producer in the Middle East outside of OPEC member states, and revenues from the oil and gas industry accounted for half of the country’s total GDP in 2013, according to the Central Bank of Oman.
Back in 2000, however, the future of Oman’s oil exports looked uncertain at best. In the figure below from the U.S. Energy Information Administration (EIA), data shows that production dipped for several years before seeing a resurgence around 2007 when Oman began adopting EOR methods.
EOR is a technique that sets out to increase oil flow to a well by injection—sometimes water, steam or other chemicals. Once the easiest-to-retrieve oil has been depleted from a reservoir, EOR can produce up to 60% more oil that is still locked inside. It is, however, a process that requires a lot of energy to initiate and operate, often requiring the importation of large quantities natural gas to generate that steam. For well operators, that massive amount of energy consumption can substantially undermine the bottom line, depleting the ultimate return on each barrel of oil produced.
But heavy oil recovery sites—such as those in Oman—that sit in sun-soaked regions can power EOR with solar energy instead of natural gas. In this type of environment, solar EOR makes good economic sense.
“For the first time, making steam with solar energy comes at a lower cost than making it with fuel. There’s simple economics driving this forward,” O’Donnell explains, referring to GlassPoint’s $600 million deal with Petroleum Development Oman (PDO) which will generate more than a gigawatt of solar power to drive EOR. “The energy cost of making the steam [for EOR] is the biggest single cost of producing the oil. Solar can cut that cost in half.”
The project, dubbed Miraah from the Arabic word for mirror, will use concentrated sunlight to produce 6,000 tons of solar steam every day—an amount that GlassPoint estimates will save Oman 5.6 trillion BTUs of natural gas annually. To channel that sunlight, GlassPoint uses greenhouses, a simple and time-honored solution.
“It was a fundamental insight from our founders that these [processes] could be much cheaper if they were moved indoors,” O’Donnell said when discussing the method behind the pilot installation in Oman. “Agricultural greenhouses are very durable at the oil fields. They withstand sandstorms…All these technologies that farmers developed and that are on every continent on Earth today to grow tomatoes and flowers performed beautifully at our [well] site.”
But to anyone who might see fossil fuel retrieval and solar energy as strange bedfellows, GlassPoint has a clear and simple answer.
“There’s only one atmosphere: so emissions savings in any sector counts,” O’Donnell explains. “The scale of energy use by the energy industry is very large and it’s not very appreciated…The largest piece of the world energy mix is industrial energy. Of that energy, two-thirds is in the form of heat, one-third is in the form of electricity. I think it’s fair to say that the world solar industry has largely gone after electricity…[But] GlassPoint’s innovation brings the cost of delivering industrial heat with sunshine down below the fuel price in the Middle East….The people who say you’re using solar for the wrong purpose—they’re missing the point.”
Will other countries follow Oman?
For Oman, that savings of 5.6 trillion BTUs of natural gas every year will be a vital part of shoring up its economic security—officials have said the country plans to use that gas in other areas to diversify the Omani economy. A 2014 report from Ernst and Young found that Oman currently uses about 22% of its total natural gas resources for EOR—a number that GlassPoint’s Miraah project could substantially mitigate. But Oman is likely just the beginning. Kuwait appears to be the next Middle Eastern country ready to adopt large-scale EOR techniques and, according to GlassPoint’s O’Donnell, maturing oil fields make this “a story that’s going to sweep across all of the oil production in the region.”
But finding a way to tap into remaining heavy oil without further depleting fossil fuel-derived energy resources in the process is vital for more than just the Middle Eastern states—it’s critical for U.S. geopolitical interests as well.
“The U.S. is not the only country that cares about its energy security,” O’Donnell explains. “The Middle East, as it relies more heavily on EOR, is a bit insecure about using imported gas to access that oil.”
The Ernst and Young report on the topic also discusses the energy security situation in Oman and directly links the successful deployment of solar EOR to reducing the country’s reliance on Iran: “The use of solar EOR carries obvious advantages in terms of energy supply for Oman as it limits exposure to imports and frees up natural gas for other uses in Oman’s industrial sectors, thereby reducing the risk inherent in reliance on Iran for significant natural gas imports.”
But GlassPoint has bigger ambitions than just the Middle East. In the US, the company is focused on California, where there’s ample sun, mature oil fields dating back to the 19th century in need of EOR, and a carbon regulatory system that makes solar the cheapest way to generate steam for oil production. Next in line could be Utah and parts of western Texas. O’Donnell says that the company is looking into other international investments in areas where there’s ample sunshine and an oil supply that is predominantly heavy crude. Venezuela, Chad, Egypt, western China and even Libya are all on GlassPoint’s list of viable locations for expansion. With the world’s oil supply becoming increasingly difficult to access, solar EOR certainly looks like has a bright future.