0:03

There is a value for

0:05

carbon. There's a value for reducing

0:07

carbon. There's a value for, you

0:10

know, making sure that we're taking

0:12

care of the climate. And

0:15

so we do have to pay for

0:17

that. So there's always

0:19

going to be a little bit

0:21

higher cost for e-fuel than for

0:23

fossil fuel, because e-fuel is cleaner

0:25

and it is better for us.

0:28

Cleaner alternatives to the oil

0:30

and gas that power vital

0:32

industries are necessary for economy-wide

0:34

decarbonization. E-fuels, or electrofuels,

0:37

are touted as a carbon neutral

0:39

solution for the hard to decarbonize

0:41

sectors that rely on energy dense

0:44

fossil fuels. E-fuels

0:46

are made by combining hydrogen with

0:48

CO2. Through the electrolysis

0:50

process, water is split into

0:52

oxygen and hydrogen atoms. The

0:54

hydrogen is then combined with

0:56

CO2, sometimes captured from the air,

0:59

through a process called synthesis. The

1:01

outcome is an energy dense liquid

1:03

synthetic fuel. But currently

1:06

the e-fuel production process makes

1:08

these alternatives more expensive than

1:10

fossil fuels. And when

1:12

burned, they release CO2, making critics

1:14

question the claims of climate neutrality.

1:18

So what is the climate impact

1:20

of e-fuels? What industries are turning

1:22

to these alternatives for decarbonization? And

1:25

how can policy and tax incentives make

1:27

them cost competitive with conventional

1:29

oil and gas? This

1:34

is Columbia Energy Exchange, a

1:36

weekly podcast from the Center

1:38

on Global Energy Policy at

1:40

Columbia University. I'm Bill Loveless.

1:49

Today on the show, Meg Gentle. Meg

1:52

is the executive director of HIF

1:54

Global, an e-fuel company developing some

1:56

of the largest projects around the

1:58

world. Before joining HIF,

2:01

Meg served as the director of OVINTIF,

2:03

one of the biggest producers of

2:05

oil and natural gas in North America.

2:08

She was also the president and CEO

2:10

of Tullurion, a liquefied natural gas company

2:13

based in Texas. And she

2:15

spent 10 years working for Schineer Energy,

2:17

helping grow their LNG marketing and trading

2:20

company into a worldwide business. Meg

2:23

joined me to discuss the

2:25

applications of e-fuels in the transport

2:27

sector, specifically shipping, aviation, and

2:29

passenger vehicles. We talked

2:31

about two of HIF's most notable projects

2:33

in Chile and Texas, and

2:36

recent technology advancements in the sector. We

2:39

also discussed Meg's background developing

2:41

large-scale energy infrastructure. I

2:43

hope you enjoy our conversation. Meg

2:46

Gentle, welcome back to Columbia Energy

2:49

Exchange. Thank you, Bill. So

2:51

happy to be here. Yeah, it's good to talk to you again.

2:53

It's been a while, but I'm glad we're able to do it

2:55

again today. You know, I was thinking

2:57

your career has taken you deep into the oil

3:00

and gas business in the past. Early

3:02

on, you were an analyst and

3:04

later an executive, including a CEO.

3:07

Now your work takes you into

3:09

the world of alternatives to those

3:11

traditional fossil fuels. What's

3:13

your worldview of energy today, and how

3:16

has your outlook changed over the years?

3:18

Well, Bill, the world needs energy,

3:20

so nothing has changed there. In

3:22

fact, we need more and more

3:24

energy to do everything that we

3:26

want to do. We're more and

3:28

more interconnected. We are traveling

3:31

more, and all of that requires

3:34

more energy. So what's

3:36

changing today in

3:38

the energy markets is what do

3:41

we do about carbon dioxide emissions?

3:44

And there are more

3:46

and more CO2 emissions at

3:49

an alarming rate. We're continuing to put

3:51

more CO2 into the atmosphere, and

3:54

everybody now recognizes that has

3:56

to change. It

3:58

has to change. So what can

4:00

we do, even in our traditional

4:03

production of energy, that reduces

4:05

the amount of CO2 emissions?

4:07

And at the same time,

4:09

what different technologies can just

4:11

pull CO2 that's in the

4:13

atmosphere out and kind of

4:15

put it back where it came from? Well,

4:17

your focus now is on E

4:20

or electrofuels. What

4:22

are they and what can they

4:24

be used for? Efuels can

4:26

be used for everything that we

4:29

use fossil fuels for today. They

4:32

are synthetic hydrocarbons. So we

4:34

talked about fossil fuels, hydrocarbons,

4:36

what is that? They're just

4:39

chains of hydrogen molecules and

4:42

CO2 molecules put together. And

4:47

fossil fuels are produced today

4:49

from beneath the Earth. But

4:52

we can still make hydrocarbon chains

4:54

just by chemistry if

4:58

we have molecules of hydrogen and molecules

5:00

of carbon. And so if

5:02

you'll start with electricity, we use

5:06

renewable electricity, so

5:08

wind, solar, hydro,

5:10

if we can do it in a sustainable

5:12

way, electricity to

5:16

separate hydrogen from water. So

5:19

water is H2O. We just take

5:21

all the H's. And

5:24

then we recombine them with molecules

5:26

of carbon dioxide. And carbon dioxide

5:29

is just in the air today.

5:32

And so we can capture that carbon

5:35

dioxide either directly from the air or

5:37

from industrial stacks

5:39

that have emissions, or we can

5:41

collect it from excess plants. And

5:45

we bring the hydrogen and the CO2,

5:47

connect them back together, and you have

5:49

these hydrocarbon chains. So we

5:52

today, in actually our first

5:54

plant in southern Chile, we

5:56

produce shipping fuel and

5:58

gasoline. from

6:01

this exact process. So renewable

6:04

wind electricity, water, we

6:07

separate the hydrogen, we

6:09

bring some carbon dioxide, and we

6:11

put those together and that makes

6:13

shipping fuel, and then we synthesize

6:15

that a little bit further into

6:17

gasoline and we sell that gasoline

6:19

to Porsche and Porsche

6:22

uses it in their experience centers,

6:24

their racing events, and in fact

6:26

they took a 911 and broke

6:28

a new world record

6:31

for the highest altitude that a

6:33

car has ever driven and they

6:35

use the efuel from the chili plant

6:38

to do that. When you say shipping, what

6:40

sort of shipping are you referring to? Big ships

6:43

that boats, you know, on

6:45

the water that carry cargo

6:47

around the world and actually

6:49

today I think there are more than

6:52

200 new

6:54

vessels that are

6:56

in construction today that are

6:59

primarily container vessels. So

7:01

all the big boats that you

7:03

see, you know, the boxes that

7:05

have everything in it that, you

7:07

know, you buy in the store, a lot of

7:09

that comes on container vessels

7:11

and those ships can use

7:14

methanol as their shipping fuel and that

7:17

can be e-methanol. And

7:20

they can use it but as

7:23

is the case with the automotive use,

7:25

that's still sort of in a test

7:27

phase, right? You mentioned Porsche is doing,

7:29

running it in their engines on

7:31

a race track, right? Right

7:34

now with the shipping, there's actually fuels

7:36

being tested in ships right now, efuels

7:38

being tested in ships as a portion

7:40

of the fuel that they're carrying. They

7:42

can actually be used so there's

7:45

no like need for

7:47

testing them in the engine per

7:49

se because they're exactly the same

7:51

as methanol that is used today

7:54

and carried around the world, that

7:56

methanol that's produced from fossil fuel.

8:00

e-methanol, you know, produced

8:02

from air and water. And

8:04

so many ships are

8:08

dual fuel capable, and

8:10

that gives the ship flexibility for

8:13

where, whichever port it's bunkering

8:15

in, so it's getting its fuel to run

8:18

the ship. There might

8:20

be, like, different fuels available

8:22

in different ports. And so

8:24

many ships have these, like,

8:26

dual fuel capabilities, and

8:28

they can run their regular

8:30

fuel oil, that's fossil fuel,

8:32

or they can run methanol or

8:35

e-methanol. We think of that fuel in

8:37

ships bunker fuel as pretty dirty, right? And

8:40

of course, now there are stricter emissions on

8:42

shipping fuels, the fuels that ships

8:45

use that are really

8:47

changing the scene for that sort of

8:49

thing. So the e-fuels would become a

8:51

rather important alternative, I would think. And

8:54

is there significant quantities yet that they're

8:56

being used on ships or not? There

8:58

are not very large quantities

9:00

yet, because we are

9:03

just starting to make

9:05

the supply of the fuels.

9:08

And we

9:10

have to build an entirely new

9:12

production facility to be able to

9:15

make the fuel. It can't just

9:17

come from a traditional refinery, you

9:20

know, overnight. And just, like,

9:22

by way of example, probably

9:24

our most advanced project, which

9:26

is ready

9:28

to start construction this year

9:31

in Texas, South Texas,

9:34

fully permitted. The engineering has

9:36

just been completed. We,

9:39

even after we start construction,

9:41

will need to invest about

9:43

seven billion dollars and spend

9:45

four years of construction before

9:47

we can actually bring the

9:50

shipping fuel to the market.

9:53

So you can see, like, just

9:55

like major turnover times

9:58

In the energy business, We were

10:00

coming upon one of those

10:03

yeah were a lot of

10:05

new Ah manufacturing capabilities needed

10:07

to make a Fuels on

10:10

Bio Fuels A tweener Lng

10:12

for shipping a lot of

10:14

different alternatives for them said

10:16

take that's dirty bunker fuel

10:19

and instead use clean bunker.

10:21

Fuel Your issues are derived from

10:23

hydrogen. As as you noted, how

10:25

do they compare as a fuel

10:28

alternative? The hydrogen itself. Or

10:30

are much much more flexible

10:32

So they solve many of

10:34

the challenges of of hydrogen.

10:37

Ah number one, they don't

10:39

need new engine. At. All

10:41

views existing engine. no change

10:44

on number two. They're very

10:46

easy to transfer of because

10:48

there are liquid and ambient

10:50

air temperatures and so they

10:53

can be. You know even

10:55

transported by things that we

10:57

used for traditional fossil fuel

10:59

transport today and are that

11:02

would contrast like with hydrogen

11:04

To transport it across the

11:06

sea you have to sell

11:09

the hydrogen to are absolute.

11:11

Zero Negative: Four Hundred Degrees

11:13

Fahrenheit. Answer is very hard

11:15

to contain the hydrogen in

11:17

in a liquid form to

11:20

be able to easily bring

11:22

it to market. So one

11:24

thing that we find is

11:26

so amazing that easels and

11:28

this isn't good. Example: with

11:30

our Sicilian, Southern Ca are

11:33

producing these fuels all the

11:35

way ad says Streets of

11:37

Magellan's and there is an

11:39

incredible wind resources there. but

11:41

there's no population were very

11:44

small town on were printed

11:46

a nurse is the the

11:48

old ports on the streets

11:51

of magellan and so we

11:53

are able to take an

11:55

incredible renewable energy resource and

11:58

converted into an energy form

12:00

that can be transported to

12:03

export markets and even other markets in

12:05

Chile that are just so far away.

12:07

And where does the CO2 come from that

12:09

you're using there? It's a

12:11

combination of some local

12:15

industry and also biogenic

12:17

CO2 from the wood

12:19

and pulp and paper

12:22

industry in southern Chile.

12:24

Interesting. Tell me more about

12:26

the Texas project. It's

12:29

your newest plant, right? Where

12:33

does that facility stand right now and

12:36

when might it be producing some

12:38

fuel? So the Texas facility

12:40

will actually be our first

12:43

commercial scale facility.

12:47

It is designed for 1.4 million

12:51

tons of methanol production, which is

12:53

the shipping fuel. It's

12:56

actually fully permitted, has all of its

12:58

environmental permits. It's

13:01

supported very, very strongly by

13:03

the local community. It

13:06

has just completed the

13:08

engineering, so a combination

13:11

of Bechtel, Siemens,

13:13

a Danish company called Topso,

13:16

and Baker Hughes have been finalizing

13:18

the engineering. So it has

13:21

a couple months of cost estimating that

13:23

it needs to go through. We

13:26

have all of the

13:28

logistics arranged for port

13:30

facilities, water supply,

13:34

and we're working on really the

13:36

last two pieces, which is the

13:39

supply of the CO2, which we'll

13:41

get from biogenic sources in the

13:43

U.S. And then also

13:45

the sale of the shipping fuel to

13:49

probably a combination of the shipping

13:51

companies and some of the major

13:53

oil and gas companies that will help us move

13:55

it into the market. So

13:58

We are working to start constructing. The on

14:00

that facility Seven billion dollars,

14:02

five thousand and construction jobs

14:04

Ah this year and where

14:06

are we need the final

14:08

Ah regulations for though the

14:10

hydrogen production tax credit to

14:12

get finalized So he got

14:14

a little bit a regulatory

14:16

to finish out there and I

14:19

think you'd say Us Treasury

14:21

forgetting that it is as quickly

14:23

as possible. What about T V

14:25

of Renewable Energy? Where are you getting your power

14:27

from? For those of us who have a motor

14:30

fuel for Saudi. The power of

14:32

the new build power ah,

14:34

culmination of wind and solar

14:36

plants and will need about

14:38

two thousand megawatts of are

14:40

fairly like baseload power for

14:42

the plants. So we will

14:44

actually commission new build. Ah,

14:46

about Five thousand megawatts of

14:49

new build wind and solar.

14:51

Ah, we won't actually build

14:53

the power, will contract for

14:55

that under a long term

14:57

power purchase agreements. Ah, so

14:59

all that big. Power

15:01

Developers and Texas are are getting

15:03

ready with their projects. For couldn't

15:05

produce a project like that dedicated to

15:08

specific facility. In this case, yours Work

15:10

in a place like Texas because I

15:12

often hear the stories about Texas having

15:14

difficulties with the grid. When there's a

15:16

you know, extreme weather you know, very

15:19

very hot weather or or even though

15:21

you know freezing cold weather. He

15:23

had sex is Brenda is

15:25

an incredible on resilience and

15:28

it runs. I think that

15:30

piece about eighty gigawatts eight

15:32

eighty thousand megawatts of power

15:34

on and so we have

15:37

a number of us pieces

15:39

of flexibility in our power

15:41

supply First of all will

15:43

be able to interrupt our

15:46

our production on when power

15:48

prices are very very high

15:50

as so that we can.

15:52

Put power back on the bread

15:55

South skill you can imagine if

15:57

we're at two thousand megawatt load.

16:00

And there's any light stress happening

16:02

on the granted we can put

16:04

two thousand megawatts right there in

16:06

sir supply of power for the

16:08

grid. Ah we will also have

16:10

like fully like new additional power

16:12

so you know every hour of

16:14

power that we need will be

16:17

new power that we've put on

16:19

the grid and and as the

16:21

same time like will use the

16:23

grid for for some on for

16:25

some balancing. Ah so that you

16:27

know where adding to the strength

16:29

of the network. Lens to the

16:31

balance of the grid. Motorcar that's

16:34

right, met with. It is the

16:36

biggest potential for the fuels as

16:38

the aviation and marine sectors mean

16:40

they seem. More. Reliant

16:42

on fuel based solutions for

16:45

decarbonization and road transport where

16:47

there's improvements in fuel efficiency

16:49

sales and. Which

16:52

of them rather significantly. Below,

16:55

you're exactly right. I would say

16:57

that Das sector was so least

16:59

amount of options is a these

17:01

and sector and he always talks

17:04

a little bit about producing gasoline

17:06

today for for for say an

17:08

alpha road transport and getting ready

17:11

to produce shipping see all and

17:13

so he know a ton about

17:15

the shipping markets and and then

17:18

that next step on he feels

17:20

his odds are produced sustainable aviation

17:22

fuel and actually in the European.

17:24

Regulations There are sub

17:27

mandates our airlines will

17:29

be required that a

17:31

portion of their fuel

17:33

purchases is coming from

17:35

a fuel cell. A

17:37

sustainable easy since your

17:39

or assess that is

17:41

also an easy. Also

17:43

made from hydrogen, green

17:45

hydrazine, me from electricity

17:47

and some. and

17:49

so that aviation sector will

17:51

will actually eventually be the

17:53

largest ah transportation sector of

17:55

demand for he feels because

17:58

it really can only either

18:01

e-fuels or biofuels. And most of

18:03

the biofuels, and you hear people

18:05

talk about buying Saff

18:08

or Hefa or Yuko,

18:10

all of that are

18:13

different acronyms basically

18:16

for use cooking oil,

18:18

derived, made

18:22

into sustainable aviation fuel. And

18:24

there's only like so much

18:26

feedstock for

18:28

use cooking oil supply

18:30

that can become a Saff.

18:33

And after that

18:35

you start to compete with

18:38

land for agriculture and plants

18:41

that can become food and instead

18:44

making them into aviation fuel. So

18:46

the e-fuels coming into

18:48

that as a supply solution is

18:50

going to be really really critical

18:52

to decarbonizing the aviation sector. I was

18:55

reading a report from the International Energy Agency

18:57

that refers to an assumed ambitious goal, I

18:59

think that was the way they put it,

19:02

of achieving a 10% share of e-fuels, 10%

19:05

of e-fuels in aviation and

19:07

shipping by 2030. Is that

19:10

realistic? I think it is Bill.

19:12

2030 is an ambitious

19:15

year, right? Yeah, right for a lot

19:17

of reasons, right? And it requires a lot

19:19

of capital to do that. But

19:21

here's what we need for that. We

19:24

need clear demand

19:27

signals and the

19:29

success of the European mandates

19:31

has been very important because

19:33

Europe said you have to

19:36

buy e-fuels and so the

19:38

airlines and the fuel distributors

19:40

in Europe, they know, well,

19:42

I have to buy this.

19:45

So I feel comfortable then buying

19:47

it under a long-term 20-year agreement.

19:49

And that's what has to happen

19:51

for Companies

19:54

like HIF and others that can

19:56

produce E-fuels. We need long-term 20-year

19:58

agreement. So that

20:01

we can find those big

20:03

tobacco cigarettes so it kind of

20:05

all you know flows down

20:07

together. We really need those clear

20:09

clear clear market signals that

20:11

say the market has to buy

20:14

it so that everybody knows he

20:16

ah my competitor also has to

20:19

buy it. That will support

20:21

the capital investment to happen. We'd

20:23

all get investments unless we have

20:25

certain see in the market. Right

20:28

to him. And you know you refer

20:30

to those of the policies in the

20:33

Edu that are certainly helping this industry.

20:36

But but it seems generally speaking,

20:38

certainly in the Us and other

20:41

places the necessary political freedom framework

20:43

to enable he feels production on

20:45

an industrial scale. There

20:48

are still lack is you know the

20:50

mean There's things that could be done

20:52

like a C O two base tax

20:54

of fuels are crediting of Israel's as

20:56

climate neutral few and road transport. It

20:59

would seem as though that is

21:01

is more significant obstacle to commercial

21:04

adoption of these technologies and broad

21:06

scale than than is the development

21:08

of the technologies themselves. Need

21:11

suicides, right? Any that's

21:13

healthy, Regulatory environment. That that

21:16

will do that? Environmental permitting in a

21:18

timely fashion. And

21:20

and that has so also happening

21:23

to me is that supports that

21:25

infrastructure to come there. So yeah

21:27

we we have some are places

21:29

in our country where communities don't

21:32

want name for success and we

21:34

have other places in our country

21:36

where communities do want that infrastructure

21:39

and and thankfully those also tend

21:41

to have a little bit more

21:43

stable environmental permitting. Rabbit. Free Environment

21:45

for example. We finished our

21:48

environmental permitting work in one

21:50

year. I'm under the A

21:52

P A delegated to Texas

21:55

Ah Environmental Air Quality on

21:57

so that was a like

21:59

successful. Process and announced like ten

22:01

or one side of the development

22:04

scale and then the other has

22:06

to be like he said like

22:08

well what. Is. The incentives

22:10

clearly for the markets and

22:12

I'm I think there's much

22:14

debate that happens. I do

22:16

you make a carbon tax

22:18

or and you make some

22:20

other kind of incentive for

22:22

his You just made a

22:25

level playing field right where

22:27

every airline in the United

22:29

States had to buy even

22:31

start with a small percentage

22:33

of their fuel as ah

22:35

I'm sorry for as a

22:37

fuel he says then everybody

22:39

would. Have to do the same thing. Yeah,

22:41

but us lucky to have right in

22:43

the United States is not Europe, at

22:45

least some extent. We. Need that final

22:48

piece? To. See that? sort of. Policy.

22:50

Ever happening in the United States, it's

22:52

seems almost with to me. We've.

22:54

Had some pretty monumental policies that

22:57

has happened recently and and even

22:59

if you go back in history

23:01

ah I'm look at requirement said

23:03

have a person is of a

23:06

dazzling as often all that we

23:08

don't know things about that so

23:10

much anymore but our own important

23:12

decarbonizing sent for our road transport

23:15

and people were very concerned about

23:17

the beginning that I was still

23:19

has significantly increase the cost of

23:21

gasoline. Want it didn't really. Know,

23:24

but that's the sort of. Those

23:26

signal you think is necessary from government that

23:28

the resort of minimum requirements for the production

23:30

and or use of the fuel to really

23:33

of enable us to take off on a

23:35

commercial level. Exactly because everyone from

23:37

a competitive standpoint of we

23:39

put our ourselves in issues

23:41

of the airlines on it's

23:43

very difficult to buy a

23:45

new fuel that maybe your

23:47

competitor is not buying and

23:50

then they're beating you on

23:52

airline tickets. so do you see

23:54

them the the the markets for the seals are

23:56

more likely to be say and europe then they

23:58

are in the united states We

24:00

see the European market is the strongest

24:03

for for green fuels and Actually,

24:06

there's also a lot developing in

24:08

terms of demand side Structures

24:11

in in Asia and and

24:14

as a result actually we have

24:17

some pretty strong cooperation agreements with

24:20

a number of Japanese companies who

24:23

are trying to build those structures in

24:25

their market to encourage efuels

24:29

and and just green fuels in

24:31

general and And

24:34

they have what they're calling a contract

24:36

for differences to try to cover the

24:38

cost difference between the green fuel and

24:41

a fossil fuel To

24:43

minimize kind of the impact on

24:45

the consumer in Japan. That's

24:47

interesting what? You

24:50

referred a minute ago to the Treasury

24:52

Department and certain tax advantages that

24:55

are available under the Inflation

24:57

Reduction Act What are

25:00

the the the policy and

25:02

tax incentives that are available for efuels

25:04

and efuels in the United States today?

25:06

Thanks to that law or perhaps other

25:09

initiatives. Well efuels because they're

25:11

hydrogen derived are You

25:14

know benefiting from the hydrogen

25:16

production tax credit and

25:19

and the hydrogen production tax credit

25:23

Was really, you know

25:25

a monumental piece of legislation that

25:27

that I think was even originally

25:30

conceived in a bipartisan way

25:34

To encourage hydrogen production in this

25:37

country and and it really moved

25:39

the US into the

25:41

leadership position on on hydrogen

25:44

incentives So it's

25:46

really so important we have we don't

25:49

really have that tax credit yet because

25:51

the regulation piece how to

25:54

get it implemented hasn't

25:56

yet been finalized but The.

26:00

The guidance I suppose is

26:02

being very careful rightly so

26:05

to be sure that we're

26:07

incentivizing the greenest production of

26:09

hydrogen on in the best

26:11

way possible. And so we

26:13

we have a regime of

26:15

our testing. It'll make sure

26:18

we don't have any C

26:20

O two emissions and our

26:22

production of hydrogen. and and

26:24

that is on E O

26:26

S. Three dollars a kilogram

26:28

of hydrogen production incentive. And

26:31

and that forms the biggest costs

26:33

actually of Israel's production is is

26:36

that hunters in power pots and

26:38

nitrogen. What about tax breaks

26:40

for carbon capture? I would think that

26:42

the that says is that the sexes

26:44

is an important rather go to your

26:47

business. Ah, Yes Also, ah, because

26:49

that will benefit the easiest

26:51

production. Ah, almost like a

26:53

little bit indirectly through the

26:55

cost of the C O

26:57

Two South. We're not going

27:00

to be the Ceo to

27:02

capture, but we will purchase.

27:04

C. O two from people

27:06

who do capture it and

27:09

then we'll deliver the C

27:11

O Two to our facility.

27:13

So ah you can in

27:15

this and another industry as

27:18

actually. Building. In the

27:20

U S which which is ah the

27:22

C O two industry which will be

27:24

upon any sense of what we are

27:27

were massive C O. Two recyclers.

27:29

right? On are aware see how

27:31

to utilize are some people say

27:34

or C O Two converters. Ah

27:36

and then there are also many

27:38

projects planned to sequester C O

27:40

Two soda, take their capture carbon

27:43

dioxide and put it back into

27:45

the ground and he how safe.

27:47

Wow Well where I can say

27:49

you know originally came from anyway

27:52

and so on. These industries are

27:54

going to result in it. You

27:56

know I see I'm to network

27:58

happening and. we can see this already happening

28:01

on the Gulf Coast. We've got some CO2

28:04

pipelines where we'll have different

28:06

users of carbon dioxide

28:08

like us, like other industries. And

28:11

so the carbon capture tax credit, which actually

28:14

has been a tax credit since 2005, is

28:16

a really important supporter to help

28:22

that new industry happen. And

28:25

I always encourage people like these

28:27

tax credits, these are not

28:31

a handout, right? These

28:34

are investments that

28:36

we're making in our country

28:38

in creation of new

28:40

industries. And as we create these

28:42

new industries, they're going

28:44

to eventually stand up on their

28:46

own as businesses on their own.

28:49

And as that's happening, we'll

28:52

have created new infrastructure, new

28:54

investment, new jobs. People

28:57

say, oh, well, the energy industry jobs

28:59

are going away. Like,

29:01

really? There's a whole big city behind me

29:03

in Houston, Texas,

29:06

of really smart people that are going

29:08

to be in jobs in

29:10

the new energy industry. I mean,

29:12

as you know, there's some pushback over tax credits.

29:14

And in fact, there are some that say if

29:16

there's a change in administrations in Washington, there may

29:19

be a movement to eliminate

29:21

these tax credits. I mean, but

29:23

when you look across the industry,

29:25

you're based in Houston. I mean,

29:27

what is the perception you see

29:29

of the attitude regarding tax incentives

29:32

more broadly in industry and elsewhere? I

29:34

see an industry, and I actually also

29:37

sit on an oil and

29:39

gas board, the Board

29:41

of Oventive. And I see an

29:44

industry that is full of

29:47

energy professionals that

29:50

are entirely motivated by

29:54

making the industry cleaner, making the

29:57

industry better, and making the supplies.

30:01

to the United States and to the

30:03

world, an energy system

30:05

that is sustainable over time. And

30:08

so as you look at

30:11

energy professionals across the sector, this

30:13

is where all the knowledge is,

30:16

right? The knowledge of energy systems,

30:18

how electric networks work,

30:22

how refining works, how transporting

30:24

energy around the world works.

30:27

And these are the professionals that

30:29

are gonna make the energy transition

30:32

happen. And so as we

30:34

think about, okay, well, tax credits, we

30:37

need to remember that these are

30:40

credits against net income, right? And

30:42

we wouldn't have that net income

30:45

going into the US Treasury if

30:47

we weren't creating these new businesses,

30:49

yeah? So we're

30:52

all making investments. I made a personal

30:54

investment to move

30:56

from traditional energy into new energy.

30:59

And the US government is helping

31:01

make that investment also. And

31:06

that is going to make the US

31:08

a leader. Yeah, I mean, do you think

31:10

a policy like the Inflation Reduction Act is an important

31:13

one to enable these new opportunities? Yeah, energy

31:15

transition is the modern day

31:17

industrial revolution. Supporters

31:20

of e-fuels say they're climate

31:22

neutral. There's no additional greenhouse gas

31:24

emissions that are produced while they

31:27

are in use,

31:29

but they do release CO2 into the

31:31

air when burned. So what

31:33

does climate neutral mean in this

31:36

case? Yeah, you're exactly right. Because

31:39

they are chemically identical to their

31:41

fossil fuel, they have carbon in

31:43

them just like the fossil fuel.

31:46

And so they have the same

31:48

emission, right? But we

31:50

talked also about they are

31:52

a carbon recycling system. So

31:55

the emission came from the carbon

31:57

that we captured. So

32:00

we took CO2 that was already out

32:02

here in our atmosphere, and

32:04

we brought it to make the

32:07

fuel. Then the fuel

32:09

does, when you use it, it re-emits

32:11

it. But

32:13

we haven't had any new CO2 come.

32:17

Actually, when we just completed

32:19

one of the many life, what

32:22

they call life cycle analysis, where

32:24

you track any CO2 that might

32:26

be in your process anywhere, when

32:30

we've just finished one for

32:33

the California Air

32:35

Resources Board process. Because

32:38

producing the fossil fuel

32:41

has some CO2 emissions

32:43

along the production process,

32:47

and we don't have that. We just take

32:50

the CO2, recycle it, and it

32:52

gets re-emitted. But

32:54

on the process, on the whole life

32:56

cycle, we're actually a little bit carbon

32:58

reducing. I want to go back to the, I'm

33:01

still intrigued by Porsche, and the testing

33:04

on the tracks and all that sort of

33:06

thing. But as you know, it's

33:09

shipping and aviation where the

33:11

big market pull is potentially

33:13

for e-fuels. The

33:19

e-fuel alliance, the industry group, that

33:21

lobby group, there's

33:24

oil and gas majors there like Exxon,

33:26

mobile. The car makers, Porsche,

33:28

of course, and Mazda are broadly

33:30

supportive of the technology. Porsche, I

33:32

believe, holds a stake in HIF,

33:34

don't they? HIF Global? They do.

33:36

Yeah. But other car makers like

33:38

Volkswagen, Mercedes Benz, are

33:40

betting on electric battery vehicles to

33:42

decarbonize. So I guess the question

33:45

is, why invest in e-fuels or road transportation

33:47

when you

33:49

do have this movement towards electric vehicles?

33:51

A movement to some extent, it's moderated

33:53

more recently, but still I think it's

33:55

seen as having tremendous potential. Why

34:00

there are those government policies and corporate

34:02

strategies that would support electric vehicles, let's

34:04

say, or fuel efficiency. So where is

34:07

the incentive to produce or

34:09

develop e-fuels for the road, for cars,

34:11

for trucks? Well, the

34:13

electric vehicle, I think,

34:15

worldwide push has definitely

34:17

been incredible. And

34:20

especially for places where there's

34:22

like a very concentrated

34:25

population where it's easy, you

34:27

don't have to drive very

34:29

far distances. You also tend

34:31

to have more public transport.

34:34

You have public

34:37

support for a lot

34:39

of the charging infrastructure

34:42

that has to get built. You don't have

34:44

very, very extreme weather, right? Very

34:47

hot and very cold puts a

34:49

lot more strain on the car

34:51

battery. So there are lots of

34:53

places in the world where electric

34:56

vehicles is the perfect solution

35:00

for decarbonizing road transport. And

35:02

then there are other places where it's not

35:05

as easy. You

35:07

either have very disparate

35:09

population, a lot

35:11

farther driving distances, maybe a

35:13

lot lower income who

35:16

can't afford the change over to electric

35:18

vehicles. In fact, they can't even afford

35:20

a new vehicle. So

35:23

they're going to drive a used vehicle,

35:25

right? Like one that you and I

35:27

would sell when we buy our

35:29

electric vehicle. And it's

35:32

those cars, one and a half billion

35:34

cars that are on the road today

35:36

that are still going to

35:38

be driven while the

35:41

electric vehicle proliferation

35:43

is increasing ever

35:45

more successfully. So

35:48

there is still, I think, a need for the

35:50

e-fuel to help us

35:53

decarbonize that segment of

35:55

the road transport And

35:58

really, in fact, support. Some of

36:00

our lower income communities who

36:02

who were i can't turn

36:05

over their. Infrastructure as quickly. What

36:07

about the cost to make him

36:09

a few merger mean critics of

36:11

would say that to the manufacturing

36:13

defused is very expensive and energy

36:15

intensive to make any. Feals is

36:17

more expensive than making fossil fuels

36:19

and there is alive and or

36:21

see that's used. Just send make

36:24

the hydrogen so those you know

36:26

our practice and we have to

36:28

like. The big. Considerations I'd say

36:30

things about one is that l

36:33

over time there there is a

36:35

value for carbon. There's a value

36:37

for reducing carbon. There's a value

36:40

for now making sure that we're

36:42

taking care of the climate and

36:44

so we we do have to

36:47

pay for that. I'm so there's

36:49

always going to be a well

36:51

that higher cost for easy old

36:54

and for fossil fuel because if

36:56

you're is cleaner and it is

36:58

better for. Us. But

37:01

the question is how much more

37:03

Ah does at ease her past

37:05

and we on that side. We

37:07

as an industry we still have

37:09

work to do on and we

37:12

need to bring the costs of

37:14

production down And we will and

37:16

the two big places are going

37:18

to come from. The manufacturing costs

37:20

are that the electoral either wishes

37:22

that piece of equipment that uses

37:25

the electricity either separate the water

37:27

and the efficiency of that electrolytes

37:29

ourselves. We're gonna bring the

37:31

manufacturing costs down over time.

37:33

today. There's like you know,

37:35

a couple units produced at

37:37

a time. When we have

37:39

commercial scale production, will will

37:41

be producing a thousand units.

37:44

l at a time and and

37:46

the efficiency is is also going

37:48

to get better when which also

37:50

helps your energy efficiency and your

37:53

or cost and then second place

37:55

is that the costs of capturing

37:57

the carbon dioxide that is all

38:00

going to come down. Some of it just

38:03

from the manufacturing costs but also

38:06

from like deploying that technology in

38:08

more and more efficient ways. And

38:10

so we can ask, well, are

38:12

there actually examples of this where

38:15

this has been true? And I

38:18

would say that a really great analogy

38:20

is in the renewable

38:22

power sector, where renewable power

38:24

started out much, much more

38:27

expensive than like natural gas

38:29

fired power. And over

38:31

a decade, all that costs came

38:33

down so that renewable

38:36

power development is actually without

38:39

any government assistance, it's

38:42

competitive with natural gas fired

38:44

power. A good comparison. I

38:46

could say the same amount of electric batteries,

38:48

too, vehicle batteries. I've

38:50

read where the Advanced Research Projects Agency

38:52

at the Energy Department has worked on

38:54

e-fuels starting some years ago. How

38:58

effective and adequate has the research

39:00

been at ARPA-E, or for that

39:02

matter, any other government programs or

39:05

in industry itself? Is there sufficient

39:07

attention and resources being paid to

39:10

research and development in bringing these

39:12

technologies further forward? Yeah, I

39:14

think that not only our

39:16

government, but governments all over

39:19

the world understand what

39:21

e-fuels are and what the

39:23

potential is, and are

39:25

supporting not just even

39:27

from the national

39:31

labs network

39:34

that we have in this country,

39:36

but even also from some of

39:38

the DOE funding. So they're

39:41

doing research within the government organizations,

39:43

but also funding private industry to

39:45

do that research. And

39:48

then grant money through the universities are

39:51

probably the three places where

39:53

we have a really robust R&D

39:56

process. I mean, one great

39:58

example is that we're

40:00

now testing units for direct

40:02

air capture. Direct air

40:04

capture units would just be able to filter

40:07

the air for the CO2 and that is

40:10

more expensive than capturing

40:13

it from industrial plants but eventually

40:16

industrial plants won't have emissions. Yeah,

40:20

when you say we are working on

40:22

that, do you mean your company

40:24

or someone else? No,

40:26

we are. HIF is and

40:29

we're actually working on two technologies,

40:31

one together with Baker Hughes who's

40:33

also our partner

40:35

and one together with Porsche who

40:38

has a unit and the

40:41

Baker Hughes unit, the Mosaic, they

40:44

bought a company called Mosaic which

40:46

came out of Stanford

40:49

so a lot of the research that

40:52

was happening there is now becoming transformed

40:55

into a commercial company

40:57

and the real like

41:01

those like maybe decades ago

41:04

research projects are now

41:06

becoming commercial scale projects

41:08

and that's where we'll

41:10

take the technology and

41:12

actually get the cost

41:15

down so that it can be commercially applied.

41:17

What more might you want to

41:19

see from the federal

41:22

government regarding policy

41:24

or funding support? I

41:27

think what we talked about

41:29

earlier Bill on clear

41:31

signals to the market is

41:33

just so important and

41:36

some of the incredible

41:38

like support for this

41:41

new industry came

41:43

through in the hydrogen production

41:45

tax credit improvements to the carbon

41:48

capture tax credit and we're just

41:50

taking too long. We're taking too

41:53

long to actually

41:55

implement the regulation

41:57

that makes those incentives turn

42:00

into real investments and we cannot

42:02

have investment in

42:05

an environment of regulatory uncertainty.

42:08

You don't see billions of dollars get deployed

42:12

without certain and clear signals. You

42:14

do see like maybe 20 million

42:16

dollars at a time but that is

42:19

not going to solve our challenges. We

42:21

need you know billions and trillions of

42:24

investment especially if we're going to make the

42:26

challenge that you gave us earlier

42:29

in this discussion for you

42:31

know 10% of shipping and aviation

42:33

to be served with green fuels by 2030.

42:37

You know before we go I want to get

42:39

back to your career and ask what advice you

42:41

may offer young professionals. If you were starting out

42:43

today what would

42:45

you do differently? What

42:47

would you be studying? What would you be

42:50

paying attention to? Well Bill first for

42:52

young people I think

42:54

you know find what makes

42:57

you energized in the

43:00

morning to you know

43:02

get up every day and do it

43:04

because that

43:06

is really what you're going to be

43:08

good at right? Yeah, and my undergraduate

43:11

degree was in economics and

43:14

I really had a passion

43:16

for international

43:18

development and economic

43:22

development in even like lower

43:24

income countries like what makes

43:26

a stable team,

43:29

a stable society happen.

43:32

And so I found my way

43:34

into the energy business and realized

43:36

that you know

43:39

energy is kind of at the heart of

43:41

everything. It's at the heart of politics. It's

43:43

at the heart of security. It's

43:45

at the heart of economic development. People

43:48

want to have you know lights in

43:50

their house the same everywhere

43:52

in the world and and

43:55

so yeah for young

43:57

people you know find your passion. and

44:00

then take the opportunities as

44:02

they come and don't try

44:05

to have a master plan. I

44:08

like that. Don't have a master

44:10

plan. Meg Gentle, thanks

44:12

for joining us today on Columbia Energy

44:15

Exchange. I enjoyed our conversation. It's really

44:17

great to see you, Bill. Thank you for having

44:19

me, and cheers to new

44:21

energy. That's

44:26

it for this week's episode of Columbia

44:28

Energy Exchange. Thank you again, Meg Gentle,

44:30

and thank you for listening. The

44:33

show is brought to you by the

44:35

Center on Global Energy Policy at Columbia

44:37

University School of International and Public Affairs.

44:40

The show is hosted by Jason Bordoff

44:42

and me, Bill Loveless. The

44:44

show is produced by Aaron Hardick from

44:46

Latitude Studios. Additional support

44:48

from Lily Lee, Caroline Pittman,

44:50

and Q. Lee. Roy

44:53

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44:55

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44:57

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45:00

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45:02

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