00:00:00 Lizzie Hurt
This episode of The Energy Pipeline is sponsored by Caterpillar Oil and Gas. Since the 1930s, Caterpillar has manufactured engines for drilling, production, well service and gas compression. With more than 2, 100 dealer locations worldwide, Caterpillar offers customers a dedicated support team to assist with their premier power solutions.

00:00:26 Speaker 2
The Energy Pipeline is your lifeline to all things oil and gas, to drill down deep into the issues impacting our industry. From the frack site, to the future of sustainability, hear more about industry issues, tools, and resources to streamline and modernize the future of oil and gas. Welcome to The Energy Pipeline.

00:00:49 Delfina Govia
This episode of The Energy Pipeline is coming at you from the Gas Machinery Conference in Phoenix, Arizona. My name is Delfina Govia and I am sitting in for my colleague, Jordan Yates, your usual host of the show. With me today, I have her usual co- host, Lizzie Hurt. Lizzie, how are you today?

00:01:10 Lizzie Hurt
Doing great. Excited to be here.

00:01:12 Delfina Govia
Isn't it exciting that we have this fabulous guest with us, Dr. Rainer Kurtz?

00:01:16 Lizzie Hurt
Yes. It's going to be a fun conversation.

00:01:18 Delfina Govia
Dr. Kurtz, welcome to the show.

00:01:20 Dr. Rainer Kurtz
Thank you.

00:01:21 Delfina Govia
Dr. Kurtz is the manager of Gas Compressor Engineering at Solar Turbines, which is a Caterpillar company. Lizzie, is it turbines or turbines?

00:01:32 Lizzie Hurt
Oh, that's a great question. I don't know.

00:01:35 Delfina Govia
Dr. Kurtz, do you have an opinion?

00:01:37 Dr. Rainer Kurtz
English is my second language, so I'll go with either one.

00:01:43 Lizzie Hurt
Dr. K Kurtz, can you start off by just introducing our audience to you? Can you tell us a little bit about your role, your background, how did you get to be where you are today?

00:01:56 Dr. Rainer Kurtz
Okay, let's start with the background. I'm originally from Germany and about 30 years ago thought it would be actually we need to live in the US and then the company made me an offer and then Solar eventually hired me from that company. That's how I got to San Diego. San Diego is a very nice place to live. Actually Solar Turbines is a very good company to work for. I started out in a role where we support oil and gas sales, and I did that for almost 25 years. Then I was asked to head the gas compressor engineering organization. That's basically the people who design, develop our line of centrifugal gas compressors, which are designed to work together with the gas turbines that we make. We predominantly serve the oil and gas upstream midstream industry with these gas compressors.

00:03:08 Delfina Govia
Fabulous. Talking about gas compressors and gas compression technologies, which we know that you are quite the expert, you failed to mention Dr. Kurtz, that you've written two books. Can we just sneak that in there?

00:03:25 Dr. Rainer Kurtz
Yeah, I mean, again, one of the neat things is that I've been working in the general industry with gas turbines and with gas compressors for many years. Then the opportunity came up, " Oh yeah, can you write a book about this?" It was actually really, really, really fun to do that, because there's one thing about talking about things, but once you have to bring that into words and in a coherent text, then you really realize what you know and what you don't know. I learned a lot actually writing these books.

00:04:10 Delfina Govia
Well, you're going to be sharing some of that knowledge right here, right now with us. Let's talk about the centrifugal gas compressors. How are centrifugal gas compressors and gas turbines related different from the perspective of compression technologies? Give us an overview, because solar turbines is known for their centrifugal compressors.

00:04:38 Dr. Rainer Kurtz
Yes. A lot of the industry in this country actually worldwide relies on the use of natural gas. That natural gas, in order to gather this natural gas and to transport natural gas requires that we compress that gas. There are a couple of different methods of doing compression. There are so- called reciprocating compressors that basically have pistons going up and down. There are centrifical compressors which basically have spinning air foils. There's actually, if you want to become a bit more technical, the reciprocating compressors are called positive displacement compressors, because they basically squeeze the gas by the action of the pistons as opposed to centrifugal compressors, which are called dynamic compressors because the movement of the impellers actually imparts energy into the gas and then that shows up as a higher pressure.

00:05:47 Lizzie Hurt
Then in what applications is a gas turbine and a centrifugal compressor best suited for the customer?

00:05:57 Dr. Rainer Kurtz
We do a lot of business with pipeline companies. If you look at in North America, in South America, in Europe, Middle East, and Southeast Asia, a lot of people build gas pipelines to transport gas over often very long distances. To transport that gas, you have to compress it. The neat thing with a gas turbine is actually, when we install our packages at the pipeline, we can actually use the gas that's transported in these pipelines as fuel for our gas turbines. You don't have to develop a lot of extra infrastructure. You basically run these machines of the gas that you transport, and that is indeed one of the big usages of gas turbines. But there are others. There is a lot of gas compression. For example, if you go offshore on offshore platforms, either part of getting gas from gas fields, which is basically underground gas storages or helping to increase the oil production, which also has something to do with pumping gas into wells, pumping gas into reservoirs, and also generally dealing with the gas that's produced as part of the oil production. I probably need to mention that 30 years ago, a lot of that gas would have been flared.

00:07:40 Lizzie Hurt
Yes.

00:07:41 Dr. Rainer Kurtz
Today we compress that gas, we use it either to enhance oil production or we transport it to shore where actually people can use it, for example, to drive power plants. That in and by itself has greatly increased the, let's say, environmentally friendliness of the oil production.

00:08:01 Delfina Govia
We've talked about this quite a bit on my show, which is around... My show is on ESG and sustainability. That also lends itself to, " Hey, this is gas is a valuable commodity," so why are we not capturing it and reusing it instead of just releasing it into the air?

00:08:23 Dr. Rainer Kurtz
I mean also in the discussion, yes, natural gas is a fossil fuel, but just by switching, for example, from coal to natural gas, you literally have your CO two production.

00:08:41 Delfina Govia
That's right.

00:08:42 Dr. Rainer Kurtz
It's not that every fossil fuel is created equal.

00:08:46 Delfina Govia
Very well said. Thank you. I'm going to have to re- air this on my show. You rattled off very quickly innovation that has occurred over the last several decades in this space. Where are you seeing the continued innovation? Because within, you also mentioned how you support quite dramatically the upstream oil industry and our pipelines in the midstream. We're building bigger pipelines, longer pipelines, we're going further, further afield in deeper waters and further beneath the ground. There's a lot of innovation that's coming about to be able to get to solve those challenges plus the environmental challenges. Where do you see the further innovation going? What are you seeing on the horizon or what do you have up your sleeve right now, Dr. Kurtz?

00:09:45 Dr. Rainer Kurtz
On the compressor side, if you compare a compressor that was built 30 years ago to the compressors that we're building today, we've greatly increased the efficiency. We've also greatly increased the operating range where we achieve higher efficiencies. That basically means you get the same amount of gas pumped with less fuel consumption and subsequently also with fewer emissions. On the emission side, the combustion system in gas turbines have reduced things like NOx emissions by almost two orders of magnitude in the last, I'd say about 30 years or so. Currently, one of the big challenges of the industry is with the advent of a lot of renewable energy, what does that mean for our industry? I mean, we're looking into hydrogen as a fuel gas and as a gas to compress, which has significant challenges. We are looking into the CO2 that can be captured and then sequestered, what are you going to do with that? There's a lot of development really just because we're really seeing a lot new applications because of renewable energies.

00:11:22 Lizzie Hurt
Absolutely. You talked about a lot of good development there. Are there any success stories that you want to highlight, whether on the gas turbine side or the centrifugal compressor side that you're really proud of?

00:11:35 Dr. Rainer Kurtz
I mean, there are a couple of things. We're talking about technology, but ultimately what is important for us, for our business is that we keep our customers successful. That success comes in various flavors. We've greatly increased the availability of our machines with a couple of things. Some of them, for example, involving big data and things like that. We have an unmatched delivery performance for our equipment, which is very important to our customers. We are arguably the market leader in customer services, meaning how fast we can respond to customers who, for example, need a new engine fast or have incurred a problem in their operation. I have a bit of a problem saying, " Okay, there was this one point in time where we did that because it's an ongoing process." I think what I'm really proud about is that the people who, for example, work in my organization really take this very serious. That's actually one of the big deals when we bring new people on board that everybody understands we are working for our customers.

00:13:11 Lizzie Hurt
Yeah, that's great and very important to keep the customer in mind. You mentioned big data. Can you talk a little bit more about what Solar Turbines is doing to become smarter, use data in your day-to-day?

00:13:26 Dr. Rainer Kurtz
We have a system in place, where we essentially get a lot of data from our fleets of gas turbines and gas compressors. This is not just, " Okay, we're getting a lot of data." The smart part really comes what you do with this data. For example, that we can do a lot of predictive making, but we can tell our customers upfront, " Look, nothing has failed yet, but half a year from now, you may have considered X, Y, Z because we have some predictive capability." Again, the name of the game in oil and gas is availability. Put equipment in the field, it has to run.

00:14:19 Delfina Govia
Yep.

00:14:21 Dr. Rainer Kurtz
Because that's really how our customers go in their mind.

00:14:24 Delfina Govia
That's exactly right. There are numerous, numerous stories of when I've worked offshore, where some partner, service provider, whomever failed to live up to their end of the bargain when we're out there pulling oil out of the bottom of the ocean and we're shut down and every second is costing us money. We, as an operator, it was all about making sure that we were always producing. That advantage of predictive maintenance, preventative maintenance, and being able to stay on top of these things, we in the upstream business know it very, very well.

00:15:15 Lizzie Hurt
I can only imagine how frustrating it is to have your hands tied and not be able to do anything about it if you have equipment go down.

00:15:22 Delfina Govia
We used to call our offshore foreman. We used to call it coaches, we didn't call it foreman, and our coach would turn red and steam would start coming out of his ears when we could not get back up and running. Having a partner that understands that is dedicated to that sort of efficiency and continuous improvement that's going to allow us to stay on and get better. It's very much appreciated.

00:15:51 Lizzie Hurt
Speaking of continuous improvement, and again tying back to innovation, and I might hint at a future episode that we will launch, where we talk with other research partners that Caterpillar has, but can you talk about some of the partners that Solar Turbines works with, whether it's an industry partner, a customer or research institution to bring about some of the innovations that you've talked about?

00:16:16 Dr. Rainer Kurtz
We actually work very closely with a lot of different institutions. For this one, I'm going to narrow down what my organization does.

00:16:26 Lizzie Hurt
Sure.

00:16:26 Dr. Rainer Kurtz
Because Solar does this on a much wider scale.

00:16:32 Lizzie Hurt
So many things.

00:16:32 Dr. Rainer Kurtz
But for example, this conference here, which is organized by the Gas Machinery Research Council, I have two of my coworkers in committees of that organization having the board of directors, because this is really an important group of people for us. These are all people that work in the industry that we're serving.

00:16:59 Lizzie Hurt
Absolutely.

00:17:00 Dr. Rainer Kurtz
We work a lot with universities at various levels. We support research projects with several universities, both in California and in other parts, including worldwide.

00:17:27 Lizzie Hurt
Oh, good.

00:17:28 Dr. Rainer Kurtz
We are very active also in let's say the helping universities to teach students that we want to hire. For example, several of us are in advisory boards for some of the universities where basically help develop the curriculum that helps students to later find jobs.

00:17:54 Lizzie Hurt
Interesting. Interesting.

00:17:56 Dr. Rainer Kurtz
Yeah, we are very active there.

00:17:58 Lizzie Hurt
Are there any technological advances that you can speak to as a result of those?

00:18:04 Dr. Rainer Kurtz
Well, for example, we developed together with a university in San Diego, a method to influence the gas flow out of turbine sections without having to move the mechanic. We regularly have students that work in our test facilities. I currently have an intern who actually helps us setting up one of our test facilities.

00:18:41 Delfina Govia
Is that a rotational position that you, arrangement that you have with the university that you have that students are allowed to rotate in and out of those types of positions?

00:18:51 Dr. Rainer Kurtz
No, we get a certain amount of internship positions approved. Then we hire-

00:18:57 Delfina Govia
Oh, these are internships.

00:18:59 Dr. Rainer Kurtz
Yes.

00:19:00 Delfina Govia
Extremely important.

00:19:02 Lizzie Hurt
It's awesome to have good work as an intern and do rewarding, valuable, important work.

00:19:08 Dr. Rainer Kurtz
Yes. Yes, and I mean, it's also very helpful for us that we actually get to know the people that eventually we want to hire.

00:19:18 Lizzie Hurt
Yeah. Yes. Good.

00:19:21 Delfina Govia
You mentioned before you just talked about collaboration and partnership and dedication to your customer's needs. Before that, we talked about our advancements in the industry to reduce our carbon footprint. Looking at the topics of collaboration and sustainability, how are you seeing solar turbines influence in that space and the focus on sustainability? The reason why I'm asking is, ladies and gentlemen, you can't see this, but there is a beautiful booth that Solar Turbines has set up here at the conference. They're showing some pretty compelling solutions, sustainable solutions on their screen. I was hoping Dr. Kurtz could share a little bit more about that with us.

00:20:29 Dr. Rainer Kurtz
Part of the problem in the sustainability discussion, is really that there are a whole lot of factors. One of the things we're trying to do is actually to bring rational arguments to the table. All right? The other thing that we are doing is we are very closely listening to what our customers have to deal with, like in conferences like that I just had a discussion with one of our customer companies on some finer details of potentially mixing hydrogen into natural gas pipelines, things like that.

00:21:14 Delfina Govia
Yeah. That expanding beyond just natural gas into renewable solutions that are available. That's fantastic.

00:21:27 Lizzie Hurt
It brings about another issue that we haven't talked about yet today, but safety, with all these new challenges and these new problems, we have to keep safety in mind. What can you share with how Solar Turbines has handled that and how they've introduced their safe practices or advances into the product?

00:21:45 Dr. Rainer Kurtz
Well, we have promoted a safety culture within Solar, so Vision Zero, where we basically strive for zero incidents, and that is part of the culture. Essentially, we promote that at every level. It starts with starting meetings with the safety moment. That starts with keeping an eye out when we walk through the manufacturing area or all areas where there's things that are not safe, but it's also a lot of collaborations with our customers. We go to customer sites. I was at one in January, so part of that is that we also get training from our customers what they expect from us. On that particular visit, they had a interesting process that I took with me and I introduced it for our folks. I mean, it's a minor detail, but one of the things about safety is you learn from each other.

00:22:49 Lizzie Hurt
That's right.

00:22:53 Delfina Govia
Let's take a step into the future. Let's look out and see what's on the horizon with emerging technologies and what is going to be shaping the gas compression industry. Being as you are the type of person that's usually at the head of the innovation that's leading the way, what do you see going forward? What changes might there be?

00:23:21 Dr. Rainer Kurtz
Well, let me actually start with what's not going to change in the future.

00:23:26 Delfina Govia
Ah, I like this.

00:23:27 Dr. Rainer Kurtz
That is that natural gas is not going to go away. I mean, sometimes when you listen to public or read publications or listen to radio shows, it sounds like come next January, we're all going to live off renewables. There is no possible way to say we're going to get out of natural gas. For one thing. It is a very environment friendly fuel, but that does not mean that we sit on our hands and say, " Okay, fine, it's natural gas. We're good for the next 10 years, for the next 15 years." We've introduced a very large gas turbine, the largest one we've built just a few weeks ago because we're confident that natural gas is not going to go away.

00:24:30 Lizzie Hurt
That's the Titan 350?

00:24:32 Dr. Rainer Kurtz
It's the Titan 350.

00:24:33 Delfina Govia
How big is it?

00:24:35 Dr. Rainer Kurtz
It's about 50,000 horsepower.

00:24:37 Delfina Govia
50,000 horsepower. Holy moly.

00:24:40 Dr. Rainer Kurtz
Currently our biggest one is 30,000 horsepower. This is quite a step upwards.

00:24:45 Lizzie Hurt
That's a big jump.

00:24:46 Dr. Rainer Kurtz
But what you're doing is actually we improve the efficiency of the engine, we improve the efficiency of the compressor, and that's probably one of the big areas we help our customers to run their equipment more efficiently. What I mentioned, we can monitor data on the engines, we can simulate processes so we can actually help our customers to save fuel. Today is a huge potential, probably bigger potential in really optimizing processes and using data to basically help people to operate more efficient than just improving a bit of efficiency here or a bit of efficiency there on the equipment.

00:25:37 Lizzie Hurt
How challenging of an engineering problem was that to go from 30,000 horsepower to 50, 000 horsepower to improve the products, improve efficiency? How much of a hurdle was that?

00:25:51 Delfina Govia
It can't be just a direct scaling. Right? To make it a big inaudible.

00:25:57 Lizzie Hurt
No. Uh-huh.

00:25:57 Dr. Rainer Kurtz
It's not. It's not a hurdle. There are many pieces of the engine that are new. There are also many pieces of the compressors that our organization is responsible for that are also new. But what you always do in any development is that you face your development on experience that we have with existing machines. We don't go out and say, " Okay, we start with a green sheet of paper. We forget about everything you heard in the last 60 years." Even though these are new engines, there are always evolution of existing machines, but with features that you either cause you increased your capabilities or lessons that you've learned by working with customers that you can bring into new development. It's more than just developing new technology.

00:26:58 Delfina Govia
What I'm seeing here, what I'm understanding here, is that solar turbines is going to continue to support the natural gas industry. You're going to do it by making more efficient and more powerful pieces of equipment that are going to help us move forward in the industry. You're going to make sure that what you do is more sustainable for the environment. You are doing this in collaboration with customers, with educational institutions and with other partners.

00:27:39 Dr. Rainer Kurtz
Yes. There's one thing though, and that's very important. We are working to improve the availability of our products and services. I mentioned that earlier, the best efficiency on a gas turbine does not buy you much if the machine doesn't run.

00:28:03 Delfina Govia
Well said.

00:28:04 Dr. Rainer Kurtz
We are going through great lengths to help our customers to keep operating and to keep operating in the most efficient possible way. inaudible. Yeah, we are an engineering organization. You always think, " Okay, these other guys do the drawings and do the CFD studies." Yeah, that too, but a lot of it's about people, people development that gives you, for example, the engineers or the service engineers that actually use these tools to make our customers more successful.

00:28:49 Delfina Govia
Dr. Kurtz, last question. What is the one thing that we need to know both about the gas compression business in general? I think you already gave us a hint that natural gas is not going away, but I don't want to put words in your mouth, and what do we need to remember walking away from this discussion around solar terminals?

00:29:23 Dr. Rainer Kurtz
Again, yes, you're absolutely right. The gas industry is not going to go away, but there are a lot of new technology challenges, and in order to be successful, a lot of the work is really collaborating with our customers and looking for ways to make our customers more successful, regardless of whether they decide this they only do natural gas or whether they decide to work with hydrogen in various different ways of work with CO2. It's all about increasing the customer value, and they look also to our employees that that's really the part that counts.

00:30:17 Delfina Govia
Let me tell you what I'm hearing that you didn't actually say, but this is what I'm hearing. Lizzie, tell me if you're hearing this as well, and I'm going to tell you that being from the upstream world, being an operator, I can tell you that my thinking, I'm guilty of this thinking. When I think of Caterpillar or when I thought of Caterpillar in the past, I would think of them as a product company and Solar Turbines being a subsidiary of Caterpillar, also a product company. What I'm hearing Dr. Kurtz saying is that, don't just think about these guys if you need to buy a piece of equipment. Think about these guys when you need to solve a problem and you need to innovate. Am I hearing you correctly? We need to change our thinking about you guys.

00:31:19 Dr. Rainer Kurtz
If what you described is your thinking about us guys, then yes, I absolutely would agree with you.

00:31:24 Delfina Govia
Okay.

00:31:26 Dr. Rainer Kurtz
It's not just about products. I mean, you have to have a good product. Don't understand me wrong, but it's really, you have to think yourselves in the shoes of your customer, and you have to make your customer successful on all different levels.

00:31:43 Delfina Govia
Fantastic.

00:31:44 Lizzie Hurt
Absolutely agree with you.

00:31:46 Delfina Govia
Well, Lizzie, I think that we have just been quite blessed to have Dr. Kurtz on our show.

00:31:52 Lizzie Hurt
Yes. Yeah, thank you for joining us.

00:31:53 Dr. Rainer Kurtz
Absolutely. My pleasure.

00:31:55 Delfina Govia
Enjoy the rest of the conference.

00:31:56 Dr. Rainer Kurtz
Thank you so much.

00:31:58 Speaker 2
Come back next week for another episode of The Energy Pipeline, a production of the Oil and Gas Global Network. To learn more, go to oggn. com.