Economics of

Vertebrae™

Breaking the mold...
making it cost effective even for small sites!

When bringing horizontal nested wells to the horizontal drilling industry we knew changes were needed. While designing Vertebrae™ we did various things to make them cost effective, including design overhaul, manufacturing tweaks, and installation changes. Below are some of the benefits.

Vertebrae™
Vertebrae™
Wells Systems
Traditional
Horizontal Wells
Designed for speedy installation to reduce cost
Uses local drillers to allow compotition
 
Uses local drillers to reduce mobilization
 
Sized to provide dynamic efficient control and reduced cost
 
Work better than vertical wells to reduce cost and time
Reduced trenching to reduce cost
Are multipurpose adding value
 
Used for samples adding characterization and reducing cost
 
  1. Our expert installers are still on site to ensure the optimum outcome for drilling and development.
  2. Bigger is not always better and is true in this instance.
  3. Reducing cost during installation is not the most important aspect, drastically better results reduce
    cost proportionally.
Can we work on small sites? We are able to install small site systems for around $12,000 providing data under roads and building that is desperately needed. Try the Vertebrae Micro Challenge if you are a first time user.

How does this apply for larger applications and more complex sites? Every site is different, so we prefer to use a sophisticated model to determine overall economic analysis. Keep reading to find out more.

H2VR Modeling
Third party modeling software using Monty Carlo Analysis produced by Optima Analytical and Dr. Richard Laton illustrate how Vertebrae™ can outperform vertical layouts and provide incredible control compared to traditional horizontal wells.

H2VR Typical Outcome

Considering we added value and lowered cost we would expect to be fiscally beneficial for most sites. However, the really interesting factor of the model is that it can account for increased effectiveness due to the horizontal aspect of treatment.
“The model takes the complexity of the hydrogeology and layout and boils it down to savings!”
Lance I. Robinson P.E
President, EN Rx

Comparing the installation cost of a vertical layout or typical horizontal remediation well to Vertebrae™ has proven to be irrational. When we know that horizontal wells are more effective and Vertebrae™ adds control, we have to add this to the equation of technology selection, not just installation cost.

Comparing numerous sites, the model is able to output a ratio of gained effectiveness. The net savings is not just cost saving for installation, but total savings accounting for gained efficiencies throughout the project.

“For instance, one installation in Colorado for air sparge and soil vapor extraction, saved cost and effort on installation by any remarkable layout under the roadway. But you cannot separate this from the fact that the system only needed to run for 2 quarters due to the incredible effectiveness. The project was expected to require 2 to 3 years of operation, another savings of $200k. Do not make the mistake of only comparing the installation costs. Let us use the model to show the ratio of treatment improvement.”

Comparative Economic Risk Analysis

The following graphics represent two examples of what we call the Horizontal to Vertical Ratio Model of H2VR Model. As can be seen, the larger the site the greater the advantage of a horizontal well application.

The model program allows a more robust approach to a simple site cost comparison. It is able to provide a complete economic risk analysis due to its broad statistical approach, local cost inputs, and hydrogeologic basis.

To start, we evaluated the cost of implementing a Vertebrae™ horizontal nested well system versus vertical wells at a small site and a large site.
Because of the large number of site variabilities and cost uncertainties, we applied a Monte Carlo, or “random walk” simulation, to generate probability distributions for each case. This gives us a broad understanding of the likely economic risk.

Inputs include, geometric constraints, hydrogeologic inputs, and cost information based on treatment types. The outputs are shown right.

The mean is the takeaway. The normal costs and risk of cost creep are higher for most vertical layouts. The distribution is also relevant as it shows how vertical layouts tend to increase more linearly with size increases, and horizontal installation are buffered when length increases are needed.

The larger the site, the larger the economic risk to use vertical layouts. This is definitely typical and validates the model as this is the current mindset of consultants understanding. But the model should be used for smaller sites to illustrate the same principle apply and smaller site stand to benefit significantly by horizontal layouts.

Why Are the Costs so Different?

There are two major observations and related characteristics to note about the model.

First, the opinions for treatment layout, based on consultant experience and cost factors for vertical layouts are irrelevant to the model. That is, it compares the hydraulics and find the true comparative qualities based on darcy’s law. A consultant may indicate they could install a vertical system for less, or using less wells, but that is the precise point in using the model. It is unbiased with respect to layout. It is comparing apples to apples, it would need that many vertical wells for comprehensive comparable treatment.

Second, the relative difference in ratio of vertical wells needed indicates the gained efficiency and likelihood of a marked improvement in treatment, possibly shaving years off the treatment time. For instance, if the model is indicating the site would require a large quantity of vertical wells, then the only way to make sure the performance of the system is somewhat similar, is to add all those well. This is often cost and physically prohibitive. However, for a horizontal installation it is completed with ease. For instance, the Direct Tires site in CO above table, the model suggests 180 vertical wells would be required on a small site. This of course is impractical and might be seen as overkill. As previously stated, it is precisely the point, that the site would require that many wells to make the performance equal to that of the Vertebrae™ well. Stated as the opposite, the number of vertebrae well segments installed at Direct Tires was 36, and installing this few of vertical wells would equate to a system 1/5 as robust and likely to take 5 times longer to treat the site (if it would at all). Yet, our experience is a consultant would try to compare the two on a even cost basis, 36 wells for 36 wells. This is irrational based on the science and the model must be used.

So, Yes, Understanding these two points there could be extravagantly significant cost savings, experience during installation, but also experienced during treatment by shortened timeline and gained efficiency.

Please contact Alyssa Wharton, our project engineer who specializes in this analysis as follows:

Alyssa Wharton, Project Engineer

wharton@enrxinc.com
(561) 427-5456