Operator costs

Both vacuum operation and the use of refrigeration incur capital and operating cost penalties and increase the complexity of the design. They should be avoided if possible. For a first pass through... 

In the case of a liquid recycle, the cost of this pressure increase is usually small. Pumps usually have low capital and operating costs relative to other plant items. On the other hand, to increase the pressure of material in the vapor phase for recycle requires a compressor. Compressors tend to have a high capital cost and large power requirements giving higher operating costs. 

Raw materials costs dominate the operating costs of most processes (see App. A). Also, if raw materials are not used efficiently, this creates waste, which then becomes an environmental problem. It is therefore important to have a measure of the efficiency of raw materials use. The process yield is defined as... 

It is often possible to use the energy system inherent in the process to drive the separation system for us by improved heat recovery and in so doing carry out the separation at little or no increase in operating costs. 

Incineration. Incinerators were discussed in Sec. 11.1. When incinerators are used to treat gaseous pollutants in relatively low concentration, auxiliary firing from fuel or other waste material normally will be necessary. The capital and operating costs may be high. In addition, long duct lines are often necessary. 

The capital cost of most aqueous waste treatment operations is proportional to the total flow of wastewater, and the operating cost increases with decreasing concentration for a given mass of contaminant to be removed. Thus, if two streams require different treatment operations, it makes no sense to mix them and treat both streams in both treatment operations. This will increase both capital and operating costs. Rather, the streams should be segregated and treated separately in a distributed effluent treatment system. Indeed, effective primary treatment might mean that some streams do not need biological treatment at all. 

Sludge disposal typically can be responsible for 25 to 40 percent of the operating costs of a biological treatment system. Treatment of sludge is aimed primarily at reducing its volume. This is so because the sludge is usually 95 to 99 percent water and the cost of disposal... 

When synthesizing a flowsheet, these criteria are applied at various stages when there is an incomplete picture. Hence it is usually not possible to account for all the fixed and variable costs listed above. Also, there is little point in calculating taxes until a complete picture of operating costs and cash flows has been established. 

Utility operating costs are usually the most significant variable operating cost after raw materials. Utility operating costs include... 

The cost of the capital depends on its source. The source of the capital often will not be known during the early stages of a project, and yet there is a need to select between process options and carry out preliminary optimization on the basis of both capital and operating costs. This is difficult to do unless both capital and operating costs can be expressed on a common basis. Capital costs can be expressed on an annual basis if it is assumed that the capital has been borrowed over a fixed period (usually 5 to 10 years) at a fixed rate of interest, in which case the capital costs can be annualized according to... 

Maintenance and operating costs represent the major expenditure late in field life. These costs will be closely related to the number of staff required to run a facility and the amount of hardware they operate to keep production going. The specifications for product quality and plant up-time can also have a significant impact on running costs. 

Working down this list, we see more innovative approaches. The unmanned option using computer assisted operation (discussed in Section 11.2) would improve safety of personnel and reduce operating cost. This is an example of innovation and the use of technology by the engineer, and is driven by an awareness of safety. 

Capital and operating costs will increase as more separator stages are added to the process line, so a balance has to be struck between increased oil yield and cost. It is uncommon to find that economics support more than 3 stages of separation and one or two stage separation is more typical. The increased risk of separation shut down is also a contributing factor in limiting numbers. 

Operations Maintenance Engineering Operating costs - maintenance - workover - manpower requirements... 

It is worth noting that typically personnel and logistics represent 30% to 50% of operating costs while maintenance costs represent 20% to 40% of operating costs. These are particular areas in which cost control and reduction should be focused. This may mean reviewing the operations and maintenance philosophies discussed in Section 11.0, to check whether they are being applied, and whether they need to be updated. 

Wells are worked over to increase production, reduce operating cost or reinstate their technical integrity. In terms of economics alone (neglecting safety aspects) a workover can be justified if the net present value of the workover activity is positive (and assuming no other constraints exist). The appropriate discount rate is the company s cost of capital. 

In high permeability reservoirs, wells may produce dry oil for a limited time following a shut-in period, during which gravity forces have segregated oil and water near the wellbore. In fields with more production potential than production capacity, wells can be alternately produced and shut in (intermittentproduction) to reduce the field water cut. This may still be an attractive option at reduced rates very late in field life, if redundant facilities can be decommissioned to reduce operating costs. 

As solution gas drive reservoirs lose pressure, produced GORs increase and larger volumes of gas require processing. Oil production can become constrained by gas handling capacity, for example by the limited compression facilities. It may be possible to install additional equipment, but the added operating cost towards the end of field life is often unattractive, and may ultimately contribute to increased abandonment costs. 

Handling production from, and providing support to, a satellite field from an older facility is at first glance an attractive alternative to a separate new development. However, whilst savings may be made in capital investment, the operating cost of large processing facilities may be too much to be carried by production from a smaller field. 

Initially, if operating costs can be divided based on production throughput, the satellite development project may look attractive. However, the unit costs of the declining host field will eventually exceed income and the satellite development may not be able to support the cost of maintaining the old facilities. If the old facilities can be partly decommissioned, and provision made for part of the abandonment cost, then the satellite development may still look attractive. The satellite development option should always be compared to options for independent development. 

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