Not just a Rental Generator Company

00:00:02 Speaker 1
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 2100 dealer locations worldwide, Caterpillar offers customers a dedicated support team to assist with their premier power solutions. Welcome to the Energy Pipeline Podcast with your host, KC Yost. Tune in each week to learn more about industry issues, tools and resources to streamline and modernize the future of the industry. Whether you work in oil and gas or bring a unique perspective, this podcast is your knowledge transfer hub. Welcome to the Energy Pipeline.

00:00:54 Russell Stewart
Hey everybody, thanks for listening. Today my guest on the show is Michael Garrett. Michael is the business development manager at a company called dps. Michael, thanks for coming on the show today.

00:01:07 Michael Garrett
Russell, thank you for having me. It's a pleasure being here with you.

00:01:10 Russell Stewart
Well, it's. The pleasure's all mine, Michael. DPS, Is that an acronym for something? Who or what is dps?

00:01:20 Michael Garrett
Yes, sir. So DPS is Distributed Power Solutions. We are owned by two Caterpillar dealers, Louisiana Cat out of Louisiana, of course, and Mustang Cat out of Houston. So we're, we're one of three global power providers for Caterpillar for electric power generation.

00:01:45 Russell Stewart
Oh, wow.

00:01:46 Michael Garrett
So yes, we received that title about a year ago, over a year ago. So we're very happy to get that with the Caterpillar group.

00:01:55 Russell Stewart
And you, you're specifically in oil and gas, is that right?

00:02:01 Michael Garrett
Well, that's part of our business model, yes sir. So we DPS cut our teeth originally got started in the oil and gas industry doing kind of a depot style business. We have a, a fleet of reciprocating natural gas engine generator sets as well as turbine engine driven generator sets. 100% of our equipment is mobile and on wheels. So fast deployable power for us. So we got started in the oil field and as the energy demand has grown across the country, as you know, we've also ventured off and we're doing some work with utilities and data centers and also have done some hurricane relief work as well.

00:02:48 Russell Stewart
Okay, so is your background oil and gas?

00:02:51 Michael Garrett
Yes, sir. Yes sir. I've started, I've been with various cat dealers for 15 years. Then I worked for Caterpillar oil and gas division as well, then then joined the DPS team a little about three and a half years ago.

00:03:05 Russell Stewart
Okay, so are you in the Permian right now?

00:03:09 Michael Garrett
Yes sir, I'm in Midland right now. Been doing some site tours and getting a new site set up this week as a matter of fact.

00:03:17 Russell Stewart
Okay, so tell me about that. What, what kind of sites? How does that work?

00:03:23 Michael Garrett
So we, we are setting up various micro grids out here in the Permian. So what we've started doing, we've kind of displaced some of these smaller Richburn units with our larger XGC 1900s, which is a 1.9 megawatt unit, and building some 5, 10, up to 15 megawatt micro grids for customers running their ESPs, compression tank batteries and various equipment out there in the oil field.

00:04:02 Russell Stewart
Okay, so a micro grid is what?

00:04:07 Michael Garrett
So, so basically, you know, we do a lot, you know, we call, what we call bridge power. So, you know, a lot of these producers out here are, they're unable to get the utilities, unable to get to them in time. So they are, you know, they need, they need to produce oil, they need to pump oil to make that money. So we provide that bridge power between, you know, when they're through drilling and everything, you're ready to start producing to when they can get utilities. Okay, micro grid. And we can run multiple pads. So basically what we're doing is we're going in and tying in. They already have their overhead lines that they're going to, you know, need for the utility, you know, already constructed. So what we do is come in and we'll, we'll come in on their pad and tie into their, on one of their overhead poles and just tie into their utility where, where the utility will eventually come to. So this way, when, when it's time, when the utility finally does arrive, it's just a disk, one disconnect from us, then they can turn the utility on. So then they don't, they don't have to do a lot of, you know, with some smaller units, they'll do them on individual ESPs and tie into the disconnects. So you've got to, you may have to go disconnect from nine different units. This way we're able to afford them one connection or a quick and simple demobilization once they're ready to, to start a utility.

00:05:32 Russell Stewart
So you're like the, you're like my whole home generator when the electricity goes out. Only you don't have any electricity there yet.

00:05:40 Michael Garrett
Right? They don't have any electricity there. So we're their prime power. We're 100% prime power for them until the utility arrives.

00:05:48 Russell Stewart
Okay, and so you mentioned earlier, reciprocate. Did you say reciprocating natural gas engine?

00:05:56 Michael Garrett
Yes, sir. Yes, sir. So DPS fleet is 100% natural gas. So all of our units are natural gas. So we have the Caterpillar XGC 1900 which is a 1.9 megawatt unit. We also have some of what they call their XQ 1475, which is a 1.475 megawatt unit, along with a few XQ 1000 which is a 1 megawatt unit.

00:06:26 Russell Stewart
Okay, so when you say they're powered by natural gas, and I've been in the oil and gas business for a long, long time and of course all I ever knew was, all I ever knew was diesel, right? Yes sir. So I know how you put diesel into an engine. How do you power it with natural gas?

00:06:48 Michael Garrett
So we do various, we have various options with that. So if the customer has a residue gas line on the site, we can utilize that. One thing we have started doing, you know, out here in, in the Permian, the gas is rather hot. So we have one particular site right now, a little scalable micro grid that we, we have for customers. Started out 3 megawatts, that's going to grow to 10 megawatts. We're actually using a mechanical refrigeration unit for the gas. So basically what we're doing is removing all those heavies out of that gas, the liquids out of that gas, and giving us a clean gas that we can burn. But it's also that MRU is providing a customer an additional revenue stream. So once they remove those, you know, the butanes, propanes and all those heavies out of there, you know, they're selling those back to the market. And it's also helping them reduce their flaring as well on the site. So it's, you know, it provides them some gas that they can burn as well as producing another revenue stream for them with the heavies.

00:07:57 Russell Stewart
You are singing my song. I'm glad to be able to get this information out. That is exactly the kind of technology that the oil and gas industry has moved to. I think people don't realize exactly how significant, you know, the oil and gas industry gets, gets attacked all the time, you know, and, and you know, we're for dirty air and dirty water and you know, blah, blah, blah, and, and we're not. And in fact we're actually providing the solutions to, to, to do just exactly the opposite of that. And so what I'm hearing you say about how you're, how you're using this natural gas to not only, to not only be more efficient and more environmentally friendly with the flaring and all that sort of thing, but then to turn it into a revenue stream that's exactly the kind of technology that we need to be moving toward. That's what's going to save the environment.

00:09:08 Michael Garrett
Yes sir. And that's one of the things I think where DPS has a real advantage with it. You know, you know, I talked about, you know, we had displaced some of the smaller rich burn units which you know, they can burn that, that gas, they can burn those, those heavy carbons, but you know, basically you're, you're burning, you're losing that extra revenue that you could have from, you know, removing them from the fuel and selling them back. So I think that's, that's one of the advantages DPS has. You know, we're, we're also, you know, talking about the missions, you know, which the goal is, you know, to get as clean, clean burn as we can. So that's one of the, we strive for as well with our customers and natural gas being one of the, you know, definitely a better option over diesel.

00:09:52 Russell Stewart
Over diesel, right. Exactly, exactly.

00:09:54 Michael Garrett
So when you start talking that emissions profile and we're also utilizing, we have a couple of sites right now that are going to be utilizing a three way oxidation catalyst to help those, you know, to help reduce some co and stuff and help the customer meet, you know, their, their emission requirements.

00:10:13 Russell Stewart
So three way oxidation catalyst, what is that?

00:10:16 Michael Garrett
So basically oxidation catalyst, we help reduce the co content of the exhaust in the formaldehydes is what that mainly is the purpose of that oxidation catalyst.

00:10:30 Russell Stewart
Okay, and so you guys are doing this in the Permian, you're doing it other places?

00:10:38 Michael Garrett
Yes sir, we have some units in the Permian running with the oxidation catalyst. And we also have a project in Utah as well where we're utilizing that three way oxidation catalyst on our units. That, that, that particular project we is actually running a saltwater disposal well with some additional pads. But yeah, so, and the great thing about that, they had a, we had enough power there that the customer's actually been able to do work with the local utility company there. And we're doing, they're doing some net metering as well. Selling, selling some power back to the grid to kind of help offset their cost for the rental of the units.

00:11:18 Russell Stewart
Oh, that's, that's incredible folks. This has been worth the price of admission right here. This is, this is the kind of, this is kind of the kind of cutting edge technology that, that this podcast is designed to, to get out there. So how do you, how do you start a project like this or when does it start?

00:11:45 Michael Garrett
You know, typically once the customer will come to Us once you know, that they've, you know, they've drilled their well, that, you know, they've, they're getting ready to start production. They've worked with the utility company and the utility company might tell them, hey, we're two years out.

00:12:01 Russell Stewart
You know, I was going to ask you that. You used the term, I really like the term you used. I understood it when you used the term bridge power. And so how long do you have to keep that bridge up?

00:12:17 Michael Garrett
Well, it definitely varies, you know, depending on. We have some from three months and we have some that'll go out to three years. You know, we've actually seen some customers that they've. We had a site with them previously that went for six months and they were so happy with our reliability and our uptime of our units that they had some. They seen the need for power coming and they were just kind of tired of messing with the utility and they said, hey, let's, let's do a three year deal and we're going to grow it over time over about a year and a half. We're going to grow it from starting out at 3 megawatts, grow it roughly to 10 megawatts. So, you know, we're their prime power, you know, for the next three years.

00:13:06 Russell Stewart
Oh, wow. And so you mentioned reliability. Okay, so we're depending upon these, these machines. So how dependable are they?

00:13:17 Michael Garrett
Yes, sir. So I mean, we're seeing an average of 98 to 99% uptime on those units, which is a lot of time Is, is better than a lot of the.

00:13:25 Russell Stewart
I was going to say better than the electric company. Yeah, exactly.

00:13:28 Michael Garrett
Yes, sir. Yes, sir. So I think our reliability is definitely better than utility a lot of the time. So we have a. What I like to think so we do all, we operate, commission operate and maintain all of our sites. You know, we have our own dps, employs our own staff. So we keep what I think are some of the best technicians in the business, our own staff with dps. So we have a great team that works very diligently to keep these sites up and running and very dependable for our customers.

00:14:04 Russell Stewart
Okay, so you provide this bridge power. So you move these generators. I guess that's what you call them as generators, right?

00:14:17 Michael Garrett
Yeah, we call it, we actually, we call them power modules.

00:14:19 Russell Stewart
Power modules. Okay. All right, that's. That, that, that sounds, that sounds much more technologically advanced than generator, especially when it usually is associated with a term diesel.

00:14:36 Michael Garrett
Yes.

00:14:36 Russell Stewart
Okay, so you move these power modules in to provide the bridge power, then they get the utilities in. Do you provide? We're talking about the utilities going down. What happens when the utilities go down?

00:14:52 Michael Garrett
Well, you know, some customers we have asked to keep our units on standby, you know, if just in case that does happen and, but you know, once we're off the side, you know, there's not much we can do to unfortunately assist them with that once their utility goes down. And if it goes down.

00:15:14 Russell Stewart
So it's, I mentioned my whole home generator in case the electricity goes down. You don't, you don't see a lot of that or not?

00:15:23 Michael Garrett
No sir, we don't see a lot of standby applications. The vast majority of nearly and obviously 99% of our projects are prime power will be the main source of power, not a standby power generation.

00:15:40 Russell Stewart
Okay, so production facilities, you do anything else?

00:15:48 Michael Garrett
Yes sir, we're actually, you know, as I said, we have a fleet of solar turbines which is also a Caterpillar owned company.

00:15:59 Russell Stewart
Did you say solar?

00:16:01 Michael Garrett
It's solar? Yes sir. It's not. When you say solar, you know, most people think of the sunlight solar.

00:16:08 Russell Stewart
Right, that's, that's exactly what I thought. So, so I was thinking wrong.

00:16:12 Michael Garrett
Yes sir. Yes sir. So the company, solar turbines, they're, they're out of San Diego, California. So they produce an industrial turbine generator sets which they're not only generator sets, they also do a lot of gas compression as well, turbine driven gas compressors. So we have a fleet of these that are as like our power modules are also mobile. We've got some what we call our SMT 60 or their Titan 60 Turbine, which is a 5.7 megawatt ISO rated unit that's in a single trailer. Then we also have some SMT130s which is a two trailer configuration, which is a 16 megawatt ISO rated unit. So we have a few of those right now. So as you know, the power demand in the US is the way our infrastructure is right now, which is not great, which we need to do better. So we're growing so fast and you're seeing a huge growth in the data industry right now with AI technology, everything on electronic. There's a huge demand in that industry. So DPS as one of the only 100% prime power for a cloud based data center in Virginia right now. So we have 100 megawatt power plant there in Virginia that we got permitted, you know, we're seeing two point part two parts per million on our NOX emissions. So they were able to get that site permitted to the DEQ and we're powering that data center 100% right now with no utility.

00:17:59 Russell Stewart
Oh, wow. And using natural gas.

00:18:03 Michael Garrett
Yes, sir. Those are all natural gas turbines.

00:18:07 Russell Stewart
Okay. Are there any other kind?

00:18:10 Michael Garrett
They do have, you know, some of those turbines you can get in a dual fuel where they could run diesel or natural gas. But, you know, most everybody we see, you know, typically sticks with the natural gas just because, you know, when you start talking natural gas costs versus diesel cost, you start burning one of those turbines can burn a lot of diesel.

00:18:32 Russell Stewart
Yeah, exactly. Yeah. So it's a whole lot. Not only is it cleaner, but it's, it's more economical.

00:18:39 Michael Garrett
Yes, sir. Yes, sir, Exactly. So it saves them a ton. So, you know, they, they do have diesel backup generators on their, you know, at each site, which is, you know, typically for all those, just in case, if they ever lost utility, you know, they had those diesel generators back, you know, to back up the data center. So. But what we've seen, we've been operating there a little over a year and then in that year time we've had a little over 99% availability rate for the units, which is yet once again, you know, has beaten the utility up there tremendously.

00:19:16 Russell Stewart
Exactly. Okay, so you say that's in Virginia.

00:19:19 Michael Garrett
Yes, sir.

00:19:20 Russell Stewart
And we already talked about the Permian. Where else are you?

00:19:27 Michael Garrett
We're, we're, we are all over the, you know, North America. So we have, you know, okay, U.S. projects. We also, we've done, for the last four years, there's, there's a protocol in Mexico during their peak demand season to help. We've done up to little over 300 megawatts down there previously utilizing turbines and receipts both to, you know, to help them during their summer peaking months. It runs from July, from June to September.

00:20:00 Russell Stewart
Oh, wow.

00:20:01 Michael Garrett
Yeah, so we've, we've done that. We've done some projects and down on the Gulf coast of Louisiana, we were down there at a petrochemical facility. We did a, that was 120 megawatt site. So we actually had two 60 megawatt sites there on the plant helping those. The facility was producing lng, so it was kind of right during the Russian Ukraine war. So the customer was trying to take advantage of the spot pricing on LNG. So we were able to provide them with that 120 megawatts of power so they could commission their liquefaction blocks a little faster and you know, start producing more in LNG at that time. So we mobilized 120 megawatts and was up and running in 21 days.

00:20:54 Russell Stewart
Wow. And so the, the had they had to have relied on traditional utility power, that would have been what.

00:21:04 Michael Garrett
But yeah, well, you know, they actually had their own power plant there, so they were, they were converting their units some, you know, some larger aerodyrivative turbines. They were converting them from a simple cycle to a combined cycle where it also had a steam turbine on it as well. But during that changeover, you know, they had, it ended up being a seven month project, you know, that they, before they could get their, their turbines converted from simple cycle to combined cycle.

00:21:34 Russell Stewart
So you provided the bridge power for that then, huh?

00:21:38 Michael Garrett
Yes, sir, we provided a bridge power for that. So they, you know, kind of help, help them expedite their, their commissioning of their liquefaction blocks and be able to start producing LNG sooner.

00:21:49 Russell Stewart
Wow. Well, this is all fascinating. I'm, I'm really, I'm really glad to, to get all this information. Michael. This is, this is really interesting. So you're the business development manager. So you, what do you like the GM or the, you oversee this stuff or.

00:22:07 Michael Garrett
No, sir, I'm one of four business development managers here at dps and we have a VP of business development, Zach Zuwilla, who's my boss. Okay. Scott Milligan is our president of the company.

00:22:25 Russell Stewart
All right, and so Your website is.

00:22:28 Michael Garrett
Dps.Www.Dps energy.com DPS energy.com.

00:22:35 Russell Stewart
Okay, yes sir, that, we'll definitely put that in the, in the show notes, folks. For those of you who are in this space, you're gonna, you're gonna want to know about these folks. You're gonna reach out to them and let them help you with, with your bridge power needs. Michael, I assume you're on LinkedIn.

00:22:56 Michael Garrett
Yes, sir, I am.

00:22:58 Russell Stewart
All right, well, we'll put your LinkedIn URL in the, in the show notes as well so people can, can reach out to you for more information. Have I missed anything, Michael?

00:23:10 Michael Garrett
No, sir. Like the only thing you. I know we kind of touched on the gas earlier and we got off onto the mru. But you know, dps, we've done additional projects as well where we can, if there's not a residue gas line close or, or filled gas close, that the customer you would get hook an Mr. Up mru up to. We also, you know, work with various suppliers to provide what we call a virtual pipeline. So we've, we've done projects utilizing CNG or compressed natural gas on site as, or LNG as well, you know, liquefied natural gas. So we did a 2020 megawatt site was actually for some cryptocurrency.

00:23:52 Russell Stewart
Oh really? Bitcoin, huh?

00:23:54 Michael Garrett
Bitcoin, yes sir. So we, we did a project, it was 20 megawatts that we used 10 of those XGC 1900s and was powering it off LNG.

00:24:06 Russell Stewart
Okay, now where do you get the, how do you store that lng?

00:24:10 Michael Garrett
So they store it there on site, they have storage tanks on there. And so, you know, we'll truck in LNG and they transfer those trailers. Then we, you know, then we'll, it's relique, it'll go through the vaporizer, you know, in turn to that liquid back into a gaseous form for us to burn.

00:24:32 Russell Stewart
Wow, that's fascinating.

00:24:34 Michael Garrett
So, yeah, so there's definitely a lot of options that we're able to provide customers for their power needs. You know what, you know, we do multiple voltages, you know, so all of our, all of our units, the 1900s are a 480 volt output. But you know, out here we've done projects where we step that voltage up to 12, 4, 7, 13, 8, 22, 8, 60. So we do a variety of voltages as well. And that's something else DPS carries. We don't carry just those power modules. We carry the balance of plan items. Your step up transformer, step down transformers protection. So we like to look at ourselves as a total solution. Not just a, a generator provider, we're okay provider and we provide that whole complete solution. So we have, you know, in house engineering staff that's, you know, which like our technicians I think are some of the best in the industry. So we take it from, you know, the customer says, this is what I have. So we've got our, the sales guys or us business development guys, work with our engineering department, come up with a solution for that customer. Once we have that, then our field guys go out there and you can set these sites up remarkably fast. It still amazes me every time how quick they can mobilize some of these sites. And once we're set up and running, you know, we have our guys that maintain those units and operate those units along. You know, we do a lot of remote monitoring with those units. So it's a complete solution is the way dps, you know, how we like to present ourselves. We're not just a rental generator company, we're a total solutions provider.

00:26:23 Russell Stewart
Okay. All right, and your technology, you guys come up with this on your own, how does that work? Because this is some cutting edge stuff that you're doing here.

00:26:37 Michael Garrett
Yes. When we say technology, you know, which all of our power modules are Caterpillar, you know, which, you know, we, I believe is probably the best engine manufacturer out there.

00:26:50 Russell Stewart
So, yeah, they've only got about 80 years experience in it, I think with oil and gas solutions.

00:26:55 Michael Garrett
Yeah, they have a lot of experience in oil and gas industry for sure. So they provide us with, with some great units. You know, we see roughly 40%, 40 to 42% efficiency on our, on those power modules, which is phenomenal, you know, compared to a lot of the other, you know, rich burn units we see that are going to be your mid-20s efficiency. So we're definitely, you know, more efficient when, when you are burning your foot fuel, you know, we're gonna, it's gonna be less money for you.

00:27:25 Russell Stewart
So it'd be fair to say Caterpillar is providing the technology. You guys are providing expert technicians to put it all together.

00:27:32 Michael Garrett
Yes, sir.

00:27:33 Russell Stewart
That's how that works.

00:27:33 Michael Garrett
So they provide us that technology, a wonderful technology, then dps, you know, providing that engineer solution that will, you know, supply the customer with the power that they need.

00:27:47 Russell Stewart
Okay. All right. Well, Michael, again, I really appreciate you taking your time to sit down and do this and to provide this information to our audience. This is exactly the kind of stuff that the energy pipeline podcast is all about. So thanks, thank you for taking your time and we might do it again sometime.

00:28:12 Michael Garrett
Absolutely, we'd love to. I appreciate you having me on. Let me talk a little bit about DPS and our capabilities and for all those listeners out there, reach out to us. We'll be happy to help you with any of your power needs in the future.

00:28:25 Russell Stewart
Absolutely. Okay, well, for everybody out there, as always, thanks for listening. Please tell your friends to listen. Post us on LinkedIn and all your other social media and we'll see you next time.

00:28:37 Speaker 1
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