Houston oilfield service company Baker Hughes is using the Permian Basin in West Texas to debut a fleet of new turbines that use excess natural gas from a drilling site to power hydraulic fracturing equipment — reducing flaring, carbon dioxide emissions, people and equipment in remote locations.

Baker Hughes CEO Lorenzo Simonelli spoke about the company’s “electric frack” technology during a Tuesday morning investors call. The company said its first quarter profit fell more than half to $32 million from $70 million during the same period a year earlier. Revenues rose to $5.6 billion from $5.4 billion revenue inthe first quarter of 2018.

As production continues to outpace pipeline construction in the Permian Basin, operators are burning off, or flaring, an estimated 104 billion cubic feet of natural gas per year instead of shipping it to market. Simonelli said he views wasted natural gas, a byproduct of oil drilling, as a business opportunity.

“We’re solving some of our customers’ toughest challenges such as logistics, power and reducing flare gas emissions with products from our portfolio,” Simonelli said during the call.

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Baker Hughes estimates 500 hydraulic fracturing fleets are deployed in shale basins across the United States and Canada. Most of them are powered by trailer-mounted diesel engines. Each fleet consumes more than 7 million gallons of diesel per year, emits an average of 70,000 metric tons of carbon dioxide and require 700,000 tanker truck loads of diesel supplied to remote sites, according to Baker Hughes.

“Electric frack enables the switch from diesel-driven to electrical-driven pumps powered by modular gas turbine generating units,” Simonelli said. “This alleviates several limiting factors for the operator and the pressure pumping company such as diesel truck logistics, excess gas handling, carbon emissions and the reliability of the pressure pumping operation.”

Baker Hughes estimates that the 500 diesel frack fleets require a combined 20 million horsepower of energy, which translates into a potential market to provide 15 gigawatts of electricity using gas-fired turbines. So far, eight electric frack crews are deployed in the Permian Basin.

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Baker Hughes is not alone in developing technology to use natural gas that would otherwise be burned off. EcoVapor Recovery Systems of Denver and Capstone Turbine of Van Nuys, Calif. have developed similar technology to use excess natural gas as the fuel to make electricity.

“Producers in the Permian are flaring enough gas each day to meet the household needs of every Texas,” Colin Leyden, a senior manager with the Environmental Defense Fund’s Austin office and author of a report on flaring in the Permian. “That sort of waste is unacceptable. On-site capture solutions like this are both welcome and needed.”

The Environmental Defense Fund is asking the Railroad Commission, which regulates the oil and natural gas industry in Texas, to eliminate permanent flaring permits, require new technologies to reduce flaring, improve emissions reporting and end a tax exemption for flared gas.

“Flaring is a very visible example of an industry that continues to struggle with waste and pollution and ultimately call into question natural gas’ ability to compete in a low carbon future,” Leyden said. “The Railroad Commission and other regulatory agencies should look for ways to incentivize technologies like this.”

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Baker Hughes merged with the oil and natural gas division of the Boston conglomerate General Electric in July 2017. The combined company’s turbine technology and electric frack equipment comes from facilities in Italy that General Electric bought from Nuovo Pignone in December 1993.

With General Electric expected to divest its ownership stake in Baker Hughes, the companies have already entered into a series of agreements in November that outline long-term collaboration for turbine technology. Under the deals, Baker Hughes will maintain access to and become the exclusive vendor for the technology.

With annual revenues of nearly $23 billion, Baker Hughes employs more than 64,000 people in 120 nations.

sergio.chapa@chron.com

@SergioChapa on Twitter