Fort Knox Shale Gas Project

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Information about Fort Knox Shale Gas Project

Published on February 23, 2016

Author: TricoTiger


1. CREATING ENERGY INDEPENDENCE WITH SHALE GAS AND GENERATORS Trico Tiger Development, LLC Fort Knox Road Improvement Project Shale Gas Well Buried Shale Gas Pipeline

2. The Fort Knox Shale Gas Model • In 2007, Fort Knox teamed up with a private energy company (Trico Tiger Development) to harvest their Shale Gas - shift from fossil fuel to a renewable (green) source of energy, meet the natural gas needs of a Large Military Installation, and move closer to becoming an Energy Island. That goal was achieved in 2010. Fort Knox and Trico Tiger Development have further teamed up with Nolin and Trane to produce electricity on post that can be used to meet the demands during peak hours and serve as backup power during demand periods. • Trico Tiger Development resourced the exploration, clearing the right of way, establishing the infrastructure, extracting the gas, compressing and conditioning the gas and delivering the gas. Once in place, the infrastructure became the Real Property of Fort Knox, but continues to be maintained by Trico/Tiger. • Fort Knox pays Nolin/Trico Tiger Development to deliver the Shale Gas based on the Market Exchange Rate and an Operations and Maintenance (O&M) Model. The Shale Gas remains Fort Knox gas and is not taxed by The Department of Interior. Fort Knox Does Not purchase the gas from Trico Tiger Development. Fort Knox owns the gas and the Bureau of Land Management (BLM) is not involved in this process. • Legal Opinion (Fort Knox JAG): “Fort Knox is not buying any product. They are merely buying a service to extract a renewable resource. This process complies with DOD Directives and Presidential Directive 13123 (Greening the Government through Efficient Energy Management).: Trico/Tiger Development, LLC 2

3. Generating Backup Power at Fort Knox • Dec 2008: Kentucky is hit by a major Ice Storm that knocks out power to Fort Knox for 7 days. The post looses connection with the local public power utility – Louisville, Gas and Electric. • The 2008 Ice Storm spurred a major energy security project that relies heavily on Combined Heat and Power onsite generators - CHP systems - to provide on demand backup power to the entire post. In the summer of 2015, Fort Knox created a reliable source of backup power and is prepared for when severe weather strikes again. • Combined heat and power systems are the most effective way to give Fort Knox both the energy security and energy savings that it needs. These systems earn their “combined-heat-and-power” name because they capture the heat that they generate when producing power. Facilities can then use this captured energy and dramatically lower yearly heating bills. • The post reduces its energy bill by over a million dollars a year. The yearly energy savings will be high enough to cover the installation and operations costs of the new CHP-based power system. Trane projects that It will take Fort Knox fewer than 10 years to realize enough energy savings to completely cover the costs of this project. Trico/Tiger Development, LLC 3

4. Shaving the Peaks During High Demand Times • In addition to installing backup generators, Fort Knox installed primary generators to use for onsite electricity generation when buying power from the public utility grid would be at its most expensive – Peak Shaving. Fort Knox officials can decide to purchase power directly from the public grid or it can rely on its own smaller microgrid to generate its own power, depending upon when each option makes better financial sense. • The final project includes 21 generators. This includes four CHP engines, ten diesel powered back up generators and seven peak shavers. The peak shaving generators are powered by Natural Gas harvested at Fort Knox and provided by Trico Tiger Development. Fort Knox’s Natural Gas is a renewable, alternative energy source. • Fort Knox has 44 MW of new electrical-generating equipment for emergency backup use and Peak Shaving – enough power to run the entire installation. Trico/Tiger Development, LLC 4

5. Cost Savings • In addition to providing energy security, the new power system reduces the posts energy costs by an estimated $1 million a year. Much of these yearly comes from the CHP systems, and more will accumulate whenever Fort Knox generates its own power during peak energy usage times. • Electricity is far more expensive during times of peak demand, such as a 95°F Kentucky day in the middle of August. By relying on its onsite generators to produce power during these times of high demand, Fort Knox sees its power bills fall dramatically throughout the year. • Summary: In the summer of 2015, Fort Knox began using their backup power generation system and started using their alternative energy, renewable natural gas source as a means to power peak shaving generators and became an Energy Island – capable of operating off the local utility grid. Trico/Tiger Development, LLC 5

6. Summary • Installations are currently purchasing Fossil Based Natural Gas from a local utility provider and could be harvesting their own Renewable Natural Gas from their installation. • At Fort Knox, Trico Tiger Development created the capability to harvest, process and deliver the installations Renewable Shale Gas…at No Risk to the installation. There was No Cost to the Government. • Under the Trico Tiger Development initiative, Fort Knox can save millions of dollars annually on their current Electricity and Natural Gas bills. • Additional benefits include: Energy Independence, Security, and Training Area Improvements. • The Trico Tiger Development project is the Standard of Excellence in the Department of Defense. Trico/Tiger Development, LLC 6

7. Generating Primary and Backup Power Trico/Tiger Development, LLC 7 20 MW New Diesel Emergency Generation 16 MW New Natural Gas Lean Burn Peak Shaving Generation 8 MW New CHP Generation 44 MW New Emergency Power Generation plus Existing Emergency Power Generation exceeds the post needs

8. Generating Primary and Back up Power Trico/Tiger Development, LLC 8 Jenbacher Shale Gas Powered Generator

9. Initial Site Selection and Goephysics Determine Usage of Gas and Electricity Determine Overall Economics Present concept to Installation Command Team Secure Contract Agreement Conduct Final Site Survey and Feasibility Study Drill Test Well Establish Infrastructure Continue Exploration Deliver Gas Major Decision Points Phase 1 Phase 2 Phase 3 Phase 5 Phase 6: Electricity Peak Shaving – Shale Gas powered electricity generators. Requires separate Contract Agreement, Site Survey, and Feasibility Study Phase 6 Phase 4 Electricity Peak Shaving The Fort Knox Model

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