The Economics Of Producing Methane And Electrical Energy From The Texas Gulf Coast Geopressured Resource
Authors: Zinn C. Dale 
Published: December 2007

Abstract
Economic evaluation of producing methane and electrical energy from the Texas Gulf Coast Geopressured Resource is heavily dependent upon the production scheme that is used. The evaluations presented in this paper are based upon reservoir characteristics that are amenable to combining flows from several wells to supply a central gas separation facility and a single electric power plant. Under this basic mode of operation, the effects of two different methods for disposal of spent fluids are evaluated. The sensitivity of the economic performance to variations in key parameters gives an insight into the relative importance of these parameters and suggests a number of actions that parameters and suggests a number of actions that may be taken to enhance the economic desirability of developing these geopressured resources.

Introduction
As a result of the work of the geothermal research team at the University of Texas at Austin interest in the development of the Texas Gulf Coast Geopressured Resource has been growing. In fact, the federal government, via the Department of Energy, funded a research project at the University of Texas that was project at the University of Texas that was specifically charged with laying out and evaluating some alternative development plans for this resource. This work produced two possible development schemes that are predicated possible development schemes that are predicated upon finding geopressured reservoirs that will support the combination of well flows to supply a central gas separation plant and a central electric generating station. These development schemes with particular emphasis on their economic evaluation are the subject of this paper.

Background
At the time that this study was conducted, the resource assessment research group at the Texas Bureau of Economic Geology had developed data describing five areas, hereafter called fairways, in the Frio formation in Texas having the potential for production of geopressured fluids. This data was used together with information concerning likely reservoir performance, well drilling activities, and performance, well drilling activities, and plant construction to produce a time-line for plant construction to produce a time-line for development of geopressured resources, hereafter called scenarios, for each of the five Frio fairways. Details of these scenarios for the Brazoria Fairway are shown in Table 1 and Table 2.
As previously discussed, these scenarios are based upon the combination of flows from several wells to supply a central gas separation facility and a central electric power plant. Under this basic scheme, investigations revealed that significant impact upon performance could possibly result from the spent fluid disposal possibly result from the spent fluid disposal techniques that were to be used. Since subsurface disposal seems to be the likely disposal method, the development scenarios were constructed for two modes of subsurface disposal, i.e. shallow and deep reinjection of the spent fluids. Shallow reinjection places the effluent from the power plant into saline aquifers at relatively shallow depths. Deep reinjection places the effluent back into the producing reservoir. While deep reinjection producing reservoir. While deep reinjection is much more expensive in terms of both initial cost and operation, it may aid in maintaining reservoir pressure, increase production of the fluids, and minimize production of the fluids, and minimize subsidence problems.

Economic Analysis
The development scenarios shown in Table 2 are based upon a three-year development schedule for a single geopressured power facility as show in Figure 1. In order to perform economic analysis of these development scenarios a continuous cash flow model representing the disbursements and receipts that are implied by these scenarios has been constructed.