Berg Chilling Systems wants to freeze oilfield emissions
Don Berggren wants to freeze the amount of natural gas flaring that happens in the oilfield.
Berggren is president of family owned, Toronto-based Berg Chilling Systems, a company that designs and manufactures refrigeration units for a wide range of markets including hockey rinks, plastics plants and bakeries. The oilfield, he said, is a relatively new market for the company, but could be a source of growth for years to come.
Berg Chilling partnered with Billings, Mont.-based Gtuit LLC four years ago to develop truckmounted refrigeration units that can be easily towed to oil and gas wells and used to capture, chill and store gases that would have otherwise been combusted and released into the atmosphere in a process called flaring that is heavily criticized by environmental groups.
“There’s so much flaring and associated gas coming up with the oil that it needs to be addressed,” Berggren said.
Berg Chilling and Gtuit have now sold 30 of these units to companies operating primarily in North Dakota’s Bakken oilfield, where flaring is rampant, and Berggren said the truck-mounted fridges have already captured 200,000 tonnes of carbon gases and diverted 5 billion cubic feet of flare gas.
“We would comfortably be able to handle 4 million cubic feet of gases (that would otherwise be flared from a single well),” Berggren said.
In practice, an oil company could truck the cooling system right up to a well where it would be used to divert, compress and chill unwanted gases that come up from the well alongside the targeted oil. Once those associated gases — propane, pentane and butane — are compressed and cooled into a liquid state, they can be trucked away and sold, earning the company money and reducing emissions and waste.
The system has not yet been deployed in Canada, but Berggren is hopeful that will change in the near future as more stringent environmental regulations come into force. Gtuit has already signed an agreement with Finning International Inc. to supply the company with the systems in Canada. Berggren hopes Finning’s existing oil and gas customers will start using the chilling technology as a result.
Recent agreements between Canada, the U.S. and Mexico to reduce methane emissions from each country’s oil and gas industry could lead to more units being sold in the U.S. and a possible entry into Berg Chilling’s home market of Canada.
“There’s need to reduce methane emissions,” Berggren said. “We believe that this solution is ideal.”
In addition, more stringent carbon prices in Alberta could further grow the company’s market share. The Alberta government unveiled new climate change policies last year that will require companies to further drastically reduce emissions or pay $20 per tonne of carbon emitted in 2017, rising to $30 per tonne in 2018.
Those regulatory changes, however, have caused many other companies offering competing cleantech solutions for unwanted flare gas to move more aggressively into the Canadian market — complicating matters for Berggren.
Calgary-based Questor Technology Inc., for example, is marketing a system that captures flared gas and waste heat to create on-site electricity. Questor president and CEO Audrey Mascarenhas told the Financial Post earlier this year that companies that can offer the cheapest solutions, like $2 per tonne in the face of a $20 per tonne carbon tax, will dominate the market.
Berggren, like many clean-tech executives selling solutions to curb oilfield emissions, said that his technology can save producers money and even earn them a return in the long run because Berg Chilling systems allows producers to sell the gases they capture and chill. He did say, however, that the payout period for the technology will depend on the market prices of the underlying gases and also the price of oil.
The price of oil — and also the price of gases like propane — has fallen sharply over the course of the last two years, while the cost of environmental non-compliance with carbon legislation has risen.
“We want Canada to be seen as an environmentally aware country in terms of energy production,” Berggren said. “We want to be part of it.”