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Will Hydraulic Fracturing Operations Go Electric?

According to a report on Bloomberg, oil and gas drillers are considering e-fracking: using gas from their own wells to run turbines for electric motors that power drilling pumps.

The move helps in two ways: It cuts about $1 million a month in fuel costs for a set of fracking equipment by 90%, according to Wells Fargo & Co., and it lessens the excess gas burned off at the well site, a practice environmental groups frown upon. Tudor Pickering Holt & Co. predicts electric pumps will represent about a third of the market in roughly the next five years, from about 3% now.

In e-fracking, a small-diameter gas pipeline shuttles the fuel from the well to a turbine powering an electric motor. Though the electric pumps are still mounted on trucks, they’re smaller than their diesel counterparts. Some e-frac models can carry two pumps, significantly reducing the number of trailers and traffic and lowering labor costs.

But higher initial capital costs, the early-stage nature of the technology and commitment to generating free cash flow are adding to e-frac ‘‘hesitation,’’ which may lead to slow adoption and capital deployment.