Stanford's Hydrogen and Natural Gas Initiatives
Dr. Naomi Boness is the managing director of the Natural Gas Initiative and co-managing director of the Hydrogen Initiative at Stanford University. With a Ph.D. in Geophysics from Stanford and over 13 years in technical and management roles at Chevron, Dr. Boness combines deep scientific knowledge with real-world experience in energy operations.
In this episode, we dive into the molecule side of energy, focusing on the evolving roles of natural gas and hydrogen in a decarbonizing world. Topics range from geopolitics and energy security to emissions challenges and the future of these key resources in the energy mix.
Episode recorded on Aug 14, 2024 (Published on Dec 5, 2024)
In this episode, we cover:
[1:38] Dr. Boness' work and focus at Stanford
[5:10] Corporate involvement: utilities, investment firms, and oil majors
[7:12] Natural gas in the global energy mix and its role as a coal alternative
[9:09] Addressing the critical issue of methane leaks
[11:42] Incentives for midstream players to participate
[13:53] Dr. Boness' pov on the idea of halting oil and gas production entirely
[16:04] Geopolitical dynamics of natural gas production and exportation
[20:59] Breakdown of the global gas production mix
[22:55] Effects of Russia's invasion of Ukraine on the European gas market
[27:10] DPower vs. heat transition and natural gas' role
[29:49] Vision for the future of natural gas in a renewable energy landscape
[33:55] Challenges and trade-offs in transitioning from natural gas and investing in infrastructure
[39:25] Potential role of hydrogen in decarbonizing hard-to-abate sectors
[43:38] Environmental impacts of hydrogen as a potential greenhouse gas
[47:33] Policy and regulatory hurdles for clean hydrogen production
[50:39] Issues surrounding the "45V rule" in the Inflation Reduction Act
[54:21] Dr. Boness' top policy priorities and wish list
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Cody Simms (00:00):
Today on Inevitable, our guest is Dr. Naomi Boness. Dr. Boness is the managing director of the Natural Gas Initiative at Stanford University. She's also co-managing director of the Stanford Hydrogen Initiative. Prior to Stanford, she held a variety of technical and management positions over 13 years at Chevron. And she holds a Ph.D. in Geophysics from Stanford.
(00:25):
In this episode, we're digging deep on the molecule side of energy, and in particular on natural gas and hydrogen. We touch on topics from geopolitics, to emissions, and a lot in between. We probably could have gone on for twice as long as we did as these are each incredibly complex areas in our energy economy.
(00:47):
From MCJ, I'm Cody Simms, and this is Inevitable. Climate change is inevitable. It's already here, but so are the solutions shaping our future. Join us every week to learn from experts and entrepreneurs about the transition of energy and industry.
(01:14):
Dr. Naomi Boness, welcome to the show.
Dr. Naomi Boness (01:16):
Thanks for having me, Cody. Happy to be here.
Cody Simms (01:19):
Thanks for joining, and I am really looking forward to learning from you about the role of molecules in our energy mix. And in particular, I think we'll spend some time today talking about natural gas, and some time today talking about hydrogen, and we'll see where else the conversation goes.
(01:37):
Maybe start by sharing a little bit about the work you do at Stanford and how the initiative that you work on fits into the broader picture of the different schools and departments at Stanford that people have likely heard of.
Dr. Naomi Boness (01:51):
So within the School of Sustainability at Stanford, which is the new school that's just been open now for two years...
Cody Simms (01:56):
The John Doerr School. Yeah.
Dr. Naomi Boness (01:58):
Yep. There are a number of different energy affiliate programs, so I actually run two of those. The first is the Natural Gas Initiative. I think it's really telling that Stanford's School of Sustainability has a Natural Gas Initiative. And the other program that I'm the co-managing director for is the Hydrogen Initiative. And I really think that's appropriate because I think of molecules kind of on a continuum. So four out of five of the atoms in natural gas are hydrogen, and so it makes a lot of sense to think about the molecule space in that continuum, particularly as we're going to use hydrogen to decarbonize natural gas.
(02:37):
Within the Natural Gas Initiative, all of the projects that we have have a sustainability component, so this is really important. We're not lobbyists for the gas industry. We're doing scientific research to understand the value of natural gas to society, to the environment. Although we have 40 faculty from all the schools on campus except for the medical school, but I'm working on that, they can broadly be divided into two categories.
(03:05):
So we think about how do we use natural gas to accelerate decarbonization. And that's really thinking about it as a reliability mechanism for the deployment of more renewable energy, particularly in places like the United States where we're starting to deploy a lot of renewables and we need some reliable baseload power, and thinking about natural gas as a replacement for coal overseas.
(03:32):
The biggest decarbonization story that is so rarely told is how we use natural gas in the United States to replace coal, and we drop to our emissions by a huge fraction by doing that, so we can really think about using our resource to help the rest of the world. And in the case of Asia, it's responsible for over 50% of our emissions, and that is growing. Natural gas is really, I believe, the most pragmatic and cost-effective solution to mitigate those emissions.
(04:05):
The other category of work that we do at Stanford is really thinking about if we're going to be using gas, how do we ensure that it's as clean and sustainable as possible? So we do a lot of work thinking about how to measure and mitigate methane leaks from the system.
Cody Simms (04:22):
So when I look at the work you're doing at Stanford with the Natural Gas Initiative, it looks like a number of large energy companies are sort of part of this mix. I think that's what you called an affiliate program to the school where you're, I presume, working together with industry to work on these solutions. It's companies that you would traditionally define as oil and gas companies, Exxon, Mobil, Shell, BP, Schlumberger, etc.
(04:43):
When you talk to scientists, you get the, "The science is clear. Burning fossil fuels is driving climate change and global warming." And there's often this pushback that the oil and gas companies have obfuscated information from the public about all of this. How engaged are these large companies in climate change as a priority and as a thing that needs to be solved in the work you're doing today?
Dr. Naomi Boness (05:16):
Our program is blessed to have lots of different types of companies, so we also have utilities, and investment firms, and think tanks. And everyone that I engage with is figuring out how to provide the energy the world needs in a way that is sustainable, is front and center for all of the companies that we work with.
(05:40):
Before I came back to Stanford five and a half years ago, I worked at Chevron. I was lucky enough to live and work all over the world. And when you see countries and communities that don't have access to the same quality of life that we have because they don't have energy, I think it really changes your perspective. So these companies understand that they have a responsibility to humanity, to provide that energy, and that we don't have the technology today, and we don't have the resources, the financial resources today to switch to wind and solar, which by the way also have sustainability issues associated with them.
(06:28):
There's no perfect solution even in a world with unlimited resources. At Stanford and in the Natural Gas Initiative, we're really pragmatic. I am really focused on trying to find solutions that address this dual challenge of providing the energy we need, maintaining quality of life for much of the western world, improving quality of life in the developing world, and finding solutions that are also sustainable. And I believe that we need to put in place solutions today that minimize the amount of emissions, even if they're not perfect.
(07:12):
We're all striving towards the same goal. We want to live on a planet where people have a good quality of life and where we are doing good by the environment. I think it's how we get there where the conversation differs. I think if we're using fossil fuels far into the future, I think something's gone horribly wrong. Clearly burning fuels that have carbon in them is not good for our planet and we need to find a better solution, but today we don't have totally clean solutions available, so being pragmatic and saying natural gas is not perfect. I agree. It has carbon in it. That's not good. But when we burn it, it has 50 to 60% less carbon than coal, so maybe we should buy ourselves some time while we're working on all these technologies that are low carbon or zero carbon and plug the holes in the boat right now because we don't have a perfect solution available.
Cody Simms (08:13):
The plug the holes in the boat is an interesting metaphor because I think for many people the question about natural gas is maybe less the combustion of it, and yes, it is a cleaner burning fuel than obviously coal and the like. It's that methane is this heat trapping gas and there are leaks across the system. So you're building out infrastructure that ultimately creates near-term like immediate warming capabilities even if it diffuses over time, unrelated to the burning of it. I'm curious how that factors into the work that you do.
Dr. Naomi Boness (08:51):
This is our largest focus area. We've got this natural gas infrastructure, millions of miles of pipelines in the United States that has been in place for a long time, and I don't think that global warming was even a term that we used when it was built. The emissions across the United States vary from place to place.
(09:13):
In the Natural Gas Initiative, there was a recent paper that was published in Nature that looks at the methane leakage rate, and we found that in some places it's very low. So if you look at places like Appalachia, over in Pennsylvania, the Marcellus Shale, it's dry gas, which means there's not oil associated with it, and that leads to a very low leakage rate. It's below 1%.
(09:34):
Now you go to the Permian, and what we found and we published is that it's over double what was being reported because we're not able to always see all these leaks. And instead of pointing the finger, we use science to say, "Hey, these are the actual data, and now we're working with operators who are making huge strides to reduce those emissions." So we work with our partner companies. You mentioned some of them, ConocoPhillips, Exxon, bpx, and we help them derive strategies to measure and mitigate. And those emissions are coming down. Is it perfect? No, but we are working really hard. And I do believe that we're on the right track to get those methane emissions down to a level that is no longer contributing to this massive problem that we have.
(10:26):
So the other thing that I'll say is that methane emissions into the atmosphere, the majority of it is actually from natural occurrences, marshlands and so on and so forth. And although it's unacceptable for the oil and gas industry to have any methane leaks in their system, that is actually not where the majority of those methane emissions are coming from. So should we fix it? Absolutely, and it's kind of a no-brainer. Nobody wants their product leaking anyway. It doesn't make any sense, but it's not, I think maybe as big an issue as some people have portrayed it to be.
Cody Simms (11:03):
In my head I have, of anthropogenic causes, natural gas and the like are roughly a third, landfills are roughly a third, and agriculture is roughly a third. Of anthropogenic, it's still a decent chunk. These big publicly traded companies, while you could say, hey, in the seventies and eighties, maybe they were obfuscating some science that they had and holding it from the public. I think today most of them are acknowledging these are problems and these are the things they need to do, but the industry itself is very fragmented with lots of small businesses, lots of private companies, companies that maybe aren't accountable to big public shareholder pools of capital.
(11:42):
How do we drive incentives for these midstream players in the transport systems to engage on this stuff? Are they getting pressure from the large, big brand name oil and energy companies or does something else regulatory need to happen here?
Dr. Naomi Boness (11:58):
When we did our Nature paper and we looked at the Permian, what we actually find is in the core where the big operators are, for the most part, the emissions are actually quite low, and it's actually the smaller independent operators around the periphery where the majority of the emissions are coming from. There's obviously resource allocation that big companies have access to and are able to put in place, but I do think that there are a number of things on the horizon that are going to help mid to smaller sized operators, one of which are the launch of satellites.
(12:43):
So we have a number of satellites. We've been testing those at Stanford. We do some blind test field trials with all of the satellite companies, and the technology is amazing. Some of those satellites such as the one that EDF is launching are going to provide that data at low or zero cost. That's one mechanism. So now the data is available. You don't have to pay for expensive detection technologies.
(13:14):
I think the other thing that's happening via regulation, because I do think that we need both carrots and sticks in this world, is that we now have the methane fee regulation. So there's actually going to be a cost associated with those methane emissions. And we're getting to a much better place, I think where we've really sort of figured out over the last decade, which detection technologies work, what the accuracy is, and now those are being translated into what's actually recorded by the EPA.
Cody Simms (13:49):
So are those EPA fines that have the potential to be levied? Is that what That is?
Dr. Naomi Boness (13:52):
Correct.
Cody Simms (13:53):
The last question I want to ask just on the broad landscape and a lot of the pressure that the industry feels from the climate side is when you see things like the recent IPCC reports and things like that that basically say we should halt all oil and gas exploration essentially immediately, how does that jibe with reality and is it helpful to the energy world that we are living in? I don't think I'm misinterpreting what some of those reports are saying. I would love to hear your thoughts on that.
Dr. Naomi Boness (14:24):
I sit in a place that a friend of mine, Scott Tinker calls the radical middle. We live in such a polarized world and with everything in life, if we can find the common ground, I think we're in a much better place. We have huge resources that have already been discovered, so particularly in the United States, our shale gas, for example, is already a discovered resource.
(14:52):
I understand where the special interest groups are coming from. They don't want to lock us into a fossil fuel future, and I don't want that either. I also think that every morning they're waking up, they're turning on their light switch, they're probably driving their kids to school, they're going to the grocery store and it's stocked because trucks have brought their food there, all these things that we take for granted, and that is made possible by the fossil fuel industry.
(15:23):
I think it's great that we are deploying renewables. I think that's great, but it's only a small piece of the total energy that we use. More than 90% of global energy comes from molecules, from fuels, and most of that is fossil fuels right now. It's easy to say that these companies are not doing their part because they're still providing the fuel, but I think millions of people will die if we halt energy delivery today. We have a responsibility to transition, but what we transition to is not clear yet.
Cody Simms (16:04):
You talked at the beginning about the North American and developed world energy systems, and the developing world energy systems. In the developing world in particular, you talked about natural gas as essentially a coal replacement, which has already not wholly happened in the US for example, but largely happened. We've done fairly recent pod episodes, focused deep dives on India and deep dives on China that identified that coal is really the primary energy natural resource in those countries. I'm curious how you think if they don't have large endemic gas industries, how are they going to start importing and using gas relative to just using the thing they already have under their feet, which is coal? Do you see that transition starting to happen and what pushes it to happen, versus just leapfrogging to solar and storage for example?
Dr. Naomi Boness (16:59):
I think this concept of leapfrogging is a false narrative. Let's take California. We have 54% renewables. It's like something like 41 if you take out all the hydro. Our natural gas consumption over the last decade as we've built out renewables and batteries has stayed completely flat, so we haven't been able to get to wind and solar primarily because battery storage is so expensive. And we haven't figured out how to do hydrogen storage or other chemical storage. We pay four times the national average for our electricity, 50 cents a kilowatt-hour.
(17:40):
I don't think that it is fair, in fact, I think it's hypocritical to ask developing countries to leapfrog to a solution that we can't afford and have not been technically able to execute ourselves. In India, they're doing an amazing job of leveraging their solar resources. They have huge shares of renewables. It's just that as more and more people in that country want energy, the pie is growing. And as you said, coal is their available local resource, but they are trying to do good by the environment.
(18:21):
There have been a number of policies put in place to increase natural gas imports. Right now, it's primarily coming from Qatar, but if you look at imports, they are ramping up for sure. The US would be able to supply India with gas. We have more gas than we need here. And we are constrained by LNG export policy. So right now there's a pause on LNG export, construction and so on and so forth. That is cutting off our nose to spite our face. We could cut emissions significantly today. They're going to be using coal because they're trying to do renewables and they can't get to a hundred percent. It's not going to happen. The idea of not providing them gas and hoping that they find a solution other than coal, I think is not feasible.
Cody Simms (19:17):
This is all political rhetoric, but in the US there's a lot of, "Oh, you can't move to clean energy because you're just empowering China. With all of the work they do in solar powers and batteries, the US should be energy independent with resources we have domestically." Is the same sentiment exist in China and or India, which is to say, why should we put ourselves into a place where we're dependent on a US natural gas infrastructure if we can leverage our own natural resources? I'm curious how that transition will play out there.
Dr. Naomi Boness (19:49):
So I think we need to think about them separately. That strategy is probably part of China's five-year plan, but we don't really have a lot of insight, but I imagine that they're thinking about how to be independent when it comes to energy.
(20:06):
India is a great friend to the US. Much like some of the other countries in Asia like Japan and South Korea, I think that there is a lot of opportunity to create trade partnerships and to minimize some of the emissions that go into our shared atmosphere. There has been a lot of policies put in place in India, so for example, using natural gas for clean cooking. 4 million people die a year, not just in India, also primarily in Africa, from cooking on dirty stoves using biomass. The idea of having propane and not providing it for that purpose to save lives seems unfathomable to me.
Cody Simms (20:59):
Let's talk about the global gas production mix. If you look at the sources of energy, gas is where the US says we actually have a geopolitical strategic advantage. We can produce this stuff. And particularly with the shale revolution, which I'd love to spend a little time on, the US got technically proficient at producing this probably above and beyond anywhere else in the world. But the US is not the largest gas producer in the world. That's still coming out of the Middle East. Is that right?
Dr. Naomi Boness (21:25):
That's correct. The shale gas changed our entire geopolitical position. Suddenly we had this resource, it wasn't even on the radar up until that point, but it wasn't just that we developed the technology.
(21:40):
So we did that. I was working on the early days of the shale revolution, and horizontal wells, and fracking really changed the landscape for that. But it's also that the rocks in the US are unique. And we went all over the world looking for other types of shale gas. We found pockets here and there, but nothing to the scale and quality that we have here in the US, so it is a very unique advantage that we have.
(22:10):
But the Middle East, Qatar in particular, in Saudi Arabia, this is part of their natural resource. And they're using it for the same reasons that we are, so domestically and to produce things like hydrogen, thinking about how they're going to sequester CO₂, and depleted oil and gas reservoirs. They're thinking about the same issues that we are, and providing that natural gas all over the world the same way that the US could be.
Cody Simms (22:41):
And with the Russian invasion of Ukraine, obviously Russia's and Ukraine's gas production came heavily into public consciousness. Where do Russia and Ukraine fit into the overall production curve here?
Dr. Naomi Boness (22:55):
There are countries that are still going to take Russian gas. Obviously the Nord Stream pipeline was compromised, and Europe I think is pretty committed to not taking gas from Russia, so the US increased their imports to Europe. Europe's gas reserves are obviously declining, so the North Sea in particular is winding down. Europe is trying to come up with strategies where natural gas winds down completely and is replaced by something else, but it's hard to imagine how that is actually going to play out when they're also winding down nuclear in many of those countries as well, and struggling from the same reliability issues that we're starting to see in the renewables-heavy states in the US, resiliency and reliability, seasonal swings in energy consumption.
(23:54):
So for Europe, the winter could have been catastrophic and they got off lightly. It was a mild winter. The US plugged the gap. They were able to pay a premium for the gas. It wasn't that more gas was really going into the market, it was just that it was being diverted from Asia. This also has some ramifications because there are countries in Asia that I think would have more gas in their portfolio potentially instead of coal, and because the supply now is coming into question, is Europe going to get the gas because they're able to pay a premium or is it the market's just not going to be there? I think they are thinking through their strategies and maybe going in other directions now because of that.
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(25:42):
Thanks and enjoy the rest of the show.
Cody Simms (25:44):
You mentioned that the US is not currently exporting LNG. Can you comment on why that is and what that export restriction looks like?
Dr. Naomi Boness (25:52):
So there's a pause right now on an increase in LNG exports, so we're still exporting at the same rate, but there won't be any more. It's sort of widely acknowledged that that was, I'm going to say a pre-election move by the current administration.
(26:09):
A paper that is largely quoted is a paper by Howarth that talks about the life cycle emissions of US LNG being higher than coal. Recently, another study has come out that really shows that when you look at the actual emissions from all around the US, and look at the efficiencies of using gas as an end-use fuel compared to coal or fuel oil, what we actually find is that there is a net climate benefit.
(26:42):
So I've been spending a lot of time in DC recently because I feel very strongly that because we live in such a polarized world, there are dogmatic positions that are clung to, and we should be looking at science, at the data, and thinking about our one atmosphere, and recognizing that it might not be a perfect solution, but we shouldn't let perfect be the enemy of the good here.
Cody Simms (27:10):
We've talked a lot about gas as a power source. You were starting to talk in Europe about gas as a heat source in the winter. Gas is also a large industrial heat source. I'm curious how you see over time the renewables transition as it relates to gas. As you think about it from a power perspective and as you think about it from a heat perspective, are those two going to happen at the same time or is one likely to advance faster than the other?
Dr. Naomi Boness (27:39):
Natural gas is a very efficient heating mechanism, so if you look at the East Coast, which has cold winters, I think in New York is something like five times the energy use in the winter compared to the summer. Most of that is taken up by the natural gas system, but policies that have been put in place to wind down fossil gas in the state mean that we're going to have to electrify. That means that we're not just electrifying at the same level, but it means that in the winter, the electric grid is going to have to take on five times what it is during the summer in order to provide the heating power that gas provides.
(28:30):
And the same is true for industry. There's a lot of industries that have very high heat and power needs, so you can think about things like steel production. So steel's been on my radar a lot because we're looking at using hydrogen to replace natural gas.
(28:47):
It's hard to imagine a world where we electrify everything and especially these really high heat and power needs. We already know that we have to increase the grid by 60%. It's hard to get anything permitted these days. Nobody wants more transmission lines, but we need them in order to get there. And of course with the recent surge in AI and data centers, we're looking at power needs that are exponentially increasing. All of this is happening kind of as a perfect storm. It's unrealistic to think that we're going to electrify everything whilst increasing our power needs and wean off natural gas. And so instead, I think it would be more pragmatic to say natural gas is going to be here for a while. Let's sure it is as clean and sustainable as it possibly can be while we figure out all these other issues.
Cody Simms (29:49):
Let's dig into that. The notion of sustainable gas. Does that have to do with how it's produced or does that have to do with putting some sort of carbon capture mechanism at the point of combustion? When we talk about making gas more sustainable, and we already talked about fixing pipeline leaks or trying to fix pipeline leaks, what does that roadmap look like?
Dr. Naomi Boness (30:11):
I do think that we should be decreasing the amount of gas that we use over time. I think it's a combination of all of those things that you mentioned. For sure we should be preventing methane from leaking into the atmosphere. We talked about that a little bit already, and that's both at the well and then it's in how we distribute it. And we work with pipeline operators to figure out how we make sure that our systems are not leaking. And that's an engineering challenge. We can switch out devices, pneumatic compressors, and we can put detection technologies in place and make sure it's not leaking.
(30:50):
We did a study within the Natural Gas Initiative looking at how California could optimize for decarbonization, and cost, and reliability. And what we found is that we definitely want to reduce the amount of natural gas, but it's hard to get to zero, especially if you want it to be cost-effective. You definitely need a small amount of gas to provide reliability, particularly during climate events. So if there's a wildfire and the solar panels are not producing the output that you need, you need some backup. The future vision would be to have a very pruned down system, so you electrify residential, use gas as power backup, and for perhaps some of these hard-to-abate industrial operations with carbon capture. I don't think that there is another solution that is really feasible.
(31:50):
I'm a big proponent of nuclear and I think a lot of people are starting to look at that more closely and be like, "Oh, maybe that was not such a good idea, closing down all those nuclear power plants that are zero carbon and were running safely."
Cody Simms (32:05):
I mean here in California there's a moratorium on building new power right now. I mean Diablo Canyon is the only active nuclear power plant.
Dr. Naomi Boness (32:11):
That's right.
Cody Simms (32:12):
There's been some interesting policy choices over the last few decades, I would say.
Dr. Naomi Boness (32:16):
Safety considerations and cost considerations that were the drivers for some of those policy changes have changed. The technologies are very different now and the costs are different. And if we're really trying to optimize for carbon, then we need to have all of these solutions back on the table. We can't just be blinkered because I don't believe that we're going to get there with wind, solar, and batteries.
Cody Simms (32:43):
I don't know if this episode will be live by the time our conversation here ships, but I just recorded last week with the CEO of Radiant Nuclear, which is trying to build one megawatt microreactors to essentially replace diesel generators in the field, which is a lot of the backup use cases that you were talking about.
(32:59):
Not specific to nuclear, but when I talk to people in the clean energy space about carbon capture for gas in particular, one of the pieces of pushback I get from people about that technology getting widely adopted is whether they're power plants or whether they're industrial heat sources that use gas today, these are 20, 30 year pieces of infrastructure. And so the question is do you want to bet on a system that in order to upgrade itself is going to have to install new CapEx around carbon capture but is also going to be dependent on the build out of CO₂ pipelines, the build out of CO₂ wells, the build out of this entire carbon capture infrastructure in the timeframe we're talking about? Or do you want to bet on storage thermal batteries and electrification catching up in that timeframe?
(33:55):
I generally come at it from a perspective of we're going to need all of the above. When you're talking about building interstate CO₂ pipelines for example, that's a huge amount of investment that someone is going to have to come up with, so I'm curious how you think about that trade-off decision that large industrial companies are clearly going to need to start making as they continue to operate.
Dr. Naomi Boness (34:17):
I really try to avoid conversations where it's one technology pitched against another because I agree with you completely. We're going to need all of it. The task ahead of us to get from 37 gigatons of CO₂ a year to net-zero requires everything. Carbon capture and storage, particularly the sequestration of carbon underground, is something that we know how to do. We've been pulling molecules out of the ground for hundreds of years and putting them in is fairly straightforward.
Cody Simms (34:54):
My wife's family is from Hutchinson, Kansas, which is one of the largest underground saline storage mechanisms for natural gas in the country, I think.
Dr. Naomi Boness (35:02):
That's so cool. I love that. She feels safe living there, right? We've been doing this for a long time.
Cody Simms (35:08):
There was one incident about a decade and a half ago where there were random gas flares popping up around town to be honest, but for the most part, yes, it's been safe.
Dr. Naomi Boness (35:17):
That wasn't what I thought you were going to say.
Cody Simms (35:18):
Sorry.
Dr. Naomi Boness (35:20):
This is the point though, right? Nothing is perfect. If you want to deploy solar, you have to use huge quantities of land. And there's emissions associated with making solar panels, by the way. If you want to do wind, you got to find a way to dispose of the blade. There is no perfect solution. There is going to be a need to invest in CO₂ infrastructure. We saw a massive acquisition by Exxon of the Denbury CO₂ pipelines. They're betting heavily on becoming a CO₂ hub in the Gulf Coast.
(35:58):
And I think when you look at the trade-offs of what it's going to take, putting point source carbon capture, particularly in the industrial hubs, our manufacturing center in California could also be a hub, and there's lots of available port space, we're going to have to get smart and try and do things in clusters so that we can optimize the costs. It's been decades that we've been deploying renewables and we really haven't seen the technologies developed to such a point where we would feel comfortable shutting off all the other options today.
Cody Simms (36:40):
I hope storage continues to advance at a rapid pace for sure. From a carbon capture perspective, it feels like particularly when it comes to gas and combustion of gas, the places that are likely to see early adoption are going to be where it doesn't have to cross state lines, where you can store the CO₂ somewhere near the place of power generation, which I would think somewhere like the Permian in Texas would potentially be a winning location for that, but I'm curious how you're seeing that play out. I think we're seeing a lot of activity in Louisiana right now as well around CO₂ sequestration starting to come online.
Dr. Naomi Boness (37:15):
I like the offshore solutions to start with. I think there's a lot of oil and gas fields in the Gulf that are depleted or close to depleted. I like that it's offshore so that we're not at risk of creating earthquakes. We saw that with the injection of wastewater from fracking operations. Taking a very conservative approach and starting with somewhere that is a known quantity. Our subsurface data from the Gulf is exceptional. I really feel like it's a low risk, high reward scenario. The infrastructure's in place. It's close to an industrial hub. Gathering up the CO₂ to make it economically viable. All of this feels like it passes the sniff test and would be a good place to do that. But I agree with you. I think we're looking for co-location. In California, we have a lot of depleted oil and gas reservoirs onshore. I think some of those are really good options.
(38:22):
I feel with the aquifers we have to be particularly careful. Because they haven't been depleted, we haven't produced the liquids that are currently in there, it means that as we put in CO₂, we have to be particularly mindful not to increase the pressure and create earthquakes. And I think we don't really understand yet the subsurface structures the way that we do for oil and gas reservoirs that have already been worked. This is my background in geophysics and earthquake seismology coming out, but we want to proceed in a cautious manner so that we get it right the first time.
(39:03):
There is huge international agreement that we don't get to our net-zero goals at any time with without some kind of carbon capture and storage. Getting that to scale as quickly as possible I think is a priority regardless of how you feel about the continued use of fossil fuels for reliability.
Cody Simms (39:25):
If we can, I'd like to use this to transition from the talking about moving one type of molecules, which is CO₂, to moving and just the general world of another molecule, which is hydrogen. It feels like a natural transition point because from what I understand, one of the largest challenges of hydrogen is the transport of it.
(39:42):
And so we're going to dig into that a little bit, but first and foremost, why is hydrogen an area that energy companies seem so interested in today in general?
Dr. Naomi Boness (39:54):
I think it's a real natural fit for their skill sets. Molecules have certain properties that energy companies have spent hundreds of years learning about and working with, and so it feels like a very natural area for them to work in. It's a lot less of a natural fit, for example, for them to be working on battery technologies. It's just a completely different science. Utilizing the skills of the industry is really important, and that's both the chemical engineering skills but also the subsurface skills, because thinking about where we're going to store hydrogen, I think underground is probably a pretty good option.
Cody Simms (40:38):
When I think of hydrogen, I think of there being two main use cases for it. I'm sure there are a bunch more, but broadly speaking, you can combust it like you do methane or natural gas, or you can run it through a fuel cell, which is more of an electrochemical reaction, kind of like a battery. Do you see either one of those being more of a driver of interest in energy company investments in hydrogen?
Dr. Naomi Boness (41:04):
Both have their pros and cons. Fuel cells, which is basically to create electricity, have been around for a really long time. Hydrogen doesn't exist for the most part in nature. There's a few random exceptions to that, but we're basically creating it from something else. And today we mostly create it from natural gas, but we could create it from splitting water. So we're already converting one energy source into hydrogen, and then to convert it back to electricity, you just have lots of efficiency losses through the system.
(41:37):
Now for vehicles, maybe those efficiency losses are worth it in some cases. So I've done some work on looking at hydrogen for example, for heavy duty trucking. The options to get to clean trucks are really hydrogen or electric vehicle battery trucks. Batteries have some serious disadvantages. If you're a long haul trucker, you probably don't want to have to wait for eight hours to charge because it probably isn't on your schedule, and that's kind of annoying. And batteries are also very heavy and they take up a lot of your payload space, so maybe hydrogen where you can refuel in six minutes, whatever it is and is very light, maybe that's a good option, and it's worth taking the hit on the efficiency. I think of hydrogen as a good option for power needs in those hard-to-abate sectors that we were talking about before where electrification is really going to struggle. It is a high density fuel and could be a really good option there.
(42:47):
I also think there are some uses of hydrogen, so for example, things like using it to make sustainable aviation fuel. Planes are not going to run on batteries anytime soon or at least not the mid to long distance planes. And there really aren't a lot of other options. Using hydrogen, I think, in these applications where the other options are limited is a really good way to think about it. I don't think that we should be randomly using hydrogen where there's other really great solutions. If electrification works, we should probably do that first.
Cody Simms (43:27):
In these combustion use cases for hydrogen, how much work on the science has been done on if there's global warming potential that emerges from that? I would imagine it's a lot less than coal, for example, as we talked about being an advantage of gas relative to coal, but I've heard that there may be some issues there, but that the science is unclear.
Dr. Naomi Boness (43:48):
There's a number of papers that have looked at this and the mechanisms for how hydrogen would act as a greenhouse gas are a little unclear, but there's basically three ways.
(44:02):
In the lower part of the atmosphere, the troposphere, the biggest issue is that hydrogen interacts with the hydroxyl radicals. Who cares what those are? It doesn't really matter, but what's important is that those hydroxyl radicals are what eat the methane. They destroy the methane. The presence of hydrogen allows methane to last for longer in the atmosphere, and methane is by far a stronger greenhouse gas for sure.
(44:31):
As we move up into the stratosphere, there's some other things that happen, so hydrogen can interact with ozone, it can reduce the amount of ozone. And then as we go even further up, it actually increases the amount of water vapor. And water actually high up in the stratosphere is also a greenhouse gas. So we have these three mechanisms, but they're not super well understood. And the global warming potential varies depending on the literature from something as small as five to as much as 30. Of course, global warming potential is the strength of the gas as a greenhouse gas relative to carbon dioxide, so it's much better than methane. Methane is like 80. It still has some issues associated with it.
(45:17):
I think what I feel optimistic about is that we've spent a decade understanding how methane leaks out of infrastructure. And as we build new infrastructure for hydrogen, we really have an opportunity to get it right the first time. The struggle is that hydrogen is really hard to detect. The smallest molecule in the universe. It's 14 times lighter than air. We can't use the same detection technologies that we use for methane. We have some work going on at Stanford actually, and I know there's other projects that are working on figuring out how do we make sure that we don't let this become an issue.
(45:53):
There's a really great paper by Ron and Caldera that shows that even in the worst case scenario, even if you're making hydrogen from natural gas, and there's a high methane leak from the natural gas, and then you turn it into hydrogen, the net climate benefit relative to fossil fuels is overwhelming. I don't want anyone to be left with the impression, although we should make sure that we are not creating any more issues, there is clearly a net climate benefit to using hydrogen compared to fossil fuels.
Cody Simms (46:25):
When it comes to producing hydrogen, you mentioned today the bulk of hydrogen is produced using methane, steam methane reformation I believe. Some of that is starting to be carbon capture associated, which would be the blue hydrogen definition as I understand it, but most of it is not. And then there's all this other work happening around electrolyzers, and back to the fuel cell metaphor, it's the reverse of a fuel cell. It's producing hydrogen using electricity, essentially. How do you see these things playing out? What do the roadmaps here look like for each of these mechanisms?
Dr. Naomi Boness (46:59):
Because there are so many steam methane reforming plants, adding carbon capture and storage is actually quite low cost. It doesn't add very much. That is clearly the most economic root. There are some practical issues. It sounds really simple like, oh, just bolt on a carbon capture facility. In reality, you actually need quite a lot of land in order to do that. Usually it's amine towers and they take up a lot of space.
Cody Simms (47:30):
And it's power too. It uses a significant amount of power itself.
Dr. Naomi Boness (47:33):
It also uses a lot of electricity. That's correct. So there are definitely some issues associated with doing that.
(47:43):
However, on the electrolytic side, we're all waiting for clarifications on the 45V rule within the IRA, the Inflation Reduction Act. It's unclear whether or not we're going to have to add additional renewable resources to the grid so that we're not stealing those green electrons from other applications to make hydrogen. It's also not clear to me, if we were to ramp up hydrogen to its maximum decarbonization potential, we're talking about maybe five times the production today, how we, A find enough green electrons to make that is one question.
(48:27):
But the other question is electrolyzers, although we've been using them for a long, long time, Jules Verne back in the 1800s predicted that we would make energy from splitting water, this has been a concept for a long time, how we make the electrolyzers that can be used with intermittent renewables, so proton exchange and anion exchange membrane electrolyzers is relatively new. And we're nowhere close to being at the scale that is thrown around casually in some of these hydrogen strategies.
Cody Simms (49:04):
It's a metals and mining problem again, same with lithium ion batteries.
Dr. Naomi Boness (49:08):
That's one issue, so they use iridium and platinum in the proton exchange membrane. And the largest one is something like 250 megawatts in China. That's the largest. That's solar panels for as far as you can see basically, and we're talking about gigawatt scale electrolyzers. I don't think that the manufacturing capacity, even if you had all the iridium and platinum solved, that the manufacturing capacity is there to provide the electrolyzers, and all of the components that we would need in order to get this to scale. I don't like to think of one versus the other because practically, not a single technology can make it by itself. We're going to need everything. And it's also going to be dependent on what the resources are in the region that you're trying to make it.
(49:58):
Moving hydrogen around, as you said earlier, is really tricky, and right now we do it on the back of tube trailers that I'm pretty sure run on diesel. We need to make hydrogen as close to where it's going to be used as possible. And so in Texas you might choose to make it from natural gas because that's the resource that you have and it's the lowest cost option. In California, you might choose to use renewables. Hopefully we be allowed to make hydrogen using the grid. That would be a great use of some of that curtailed energy in the middle of the day. We have more green electrons than we can use.
Cody Simms (50:39):
With the 45V clarification you were talking about, and the challenge there as I understand it is, if you're advertising it as green hydrogen, you want it produced using renewable power, and yet you don't want to use renewable power to produce hydrogen such that other parts of the grid have to turn on more coal or fossil fuel based power, so it's this whole leakage issue, I guess that as you would talk about things from a carbon crediting perspective. You don't want to leak electrons from one use case to another.
Dr. Naomi Boness (51:07):
And I agree. We want clean hydrogen to be made using clean power, but we also need to get these markets started. We're starting from zero and project developers are not going to move forward on any of these projects if the cost now is tripled or quadrupled because we got to put in whole new solar and wind developments. Being practical about it would mean it's not perfect right now.
(51:35):
Do an annual average, make it better than what we're using right now in the terms of fossil fuels, and let's phase in a requirement on the matching of the carbon from the electricity to the hydrogen once we've got this market going, and are building out our grid and can accommodate it.
Cody Simms (51:56):
It seems like we've gotten over that from an EV perspective. You get tax credits when you buy an EV and yet you're charging your EV sometimes with non-renewable based power, but the tax credit regime is okay with that, so it seems like maybe there's potentially a double standard being applied to hydrogen here.
Dr. Naomi Boness (52:16):
I love that analogy, Cody. You're absolutely right. There are places in the United States where today for the environment, it's actually worse to have an EV than it is to drive a gasoline car because you're charging it with power from coal, and there is life cycle emissions associated with an EV that you don't have or that are much lower with a conventional car.
(52:39):
But what we said was, we're looking to the future, winding down coal, we're going to clean up our grid, and if we don't get the EV market started now, we'll never have any penetration and it just won't get off the ground.
Cody Simms (52:53):
And the EV market started with incentives on the production side and then now has incentives on essentially the buy side. From a hydrogen perspective with the IRA, there's a bunch of incentives on the production side. Do you see there being a world where there are a bunch of incentives on essentially the buy side of hydrogen coming?
Dr. Naomi Boness (53:15):
When the DOE allocated the money to the hydrogen hubs, there was originally $7 billion in the pot. What they actually did was allocate 6 billion and then they put together a demand-side incentive program that Energy Futures Initiative is the lead on, and where they're assessing all of the different end use sectors, and figuring out how to put in place a strategy for demand-side incentives. Because you're absolutely right. There's no good having a lot of push from the production side if you can't get offtake agreements because the hydrogen, even with the incentives, is more expensive than the incumbent fuels that are being used.
Cody Simms (54:02):
I have really, really loved this conversation. I feel like we've dug into so many things.
(54:07):
The last thing I guess I'll ask you is if you could project a future in the United States of your policy wish list for the next five or 10 years, what are the things you would be asking for?
Dr. Naomi Boness (54:21):
The number one thing that we need to do is permitting reform. The recognition that in order to transition to a clean energy future, we have to build stuff. We have to put steel in the ground. We can't be opposed to building anything. We don't want pipelines. We don't want transmission lines. We don't want hydrogen lines. At some point, we have to say we have to build and construct in order to get us to the future that we want.
Cody Simms (54:53):
I know there's a draft of permitting reform in Congress right now. Do you have any initial thoughts on it? I haven't dug into it at all yet. Clearly I need to.
Dr. Naomi Boness (55:01):
I haven't. I was in DC and we were talking about it a little bit. I think anything that moves us in a bipartisan way towards this idea that, let's build the vision that we want for our country together, is a good thing in my book, so I'm excited to see how it all unravels. And any progress on permitting for any clean energy would be great as far as I'm concerned.
Cody Simms (55:34):
I'm so grateful for you coming on here. I know I probably asked some questions that challenge things here and there, but I appreciate your willingness to engage. And these are all such complicated, complex topics, and so important to how we all live our lives, and the future of the planet we live on, so I appreciate your time.
Dr. Naomi Boness (55:53):
I appreciate you too. Thanks, Cody.
Cody Simms (55:56):
Inevitable is an MCJ podcast. At MCJ, we back founders driving the transition of energy and industry, and solving the inevitable impacts of climate change.
(56:09):
If you'd like to learn more about MCJ, visit us at mcj.vc. And subscribe to our weekly newsletter at newsletter.mcj.vc.
(56:21):
Thanks and see you next episode.
