ECV once again attended CERAWeek, one of the top five overall “corporate leader” conferences in the world, held annually in Houston. This year’s CERAWeek was different, marking a year of record attendance and a stronger emphasis on climate change topics than ever before. We spent most of our time in the “Innovation Agora” side of the conference and as you will see in our summary report below, the future of Green Molecules™ was center stage with discussions on hydrogen, CCUS, and the Inflation Reduction Act, while Loss & Damage and water use also got some stage time. The event brought together senior executives, government officials, thought leaders, academics, technology innovators and financial leaders to discuss the biggest challenges facing the future of energy, the environment, and climate.
Hydrogen has long been discussed as the Fuel of the Future. This year, panelists discussed its benefits but there was also a lot of discussion surrounding its challenges and opportunities. Hydrogen has the potential to replace natural gas in certain applications, particularly in areas where emissions reductions are a priority and where Green Molecules™ will continue to provide reliable energy, such as in heating and heavy industry. A lot of the discussion was focused on reducing the barriers of cost and availability, and solving the challenges of production, storage, and transportation technologies.
The federal regulatory environment is becoming more and more favorable for innovations in Green Molecules™. Several leaders weighed in on how to create a hydrogen economy from the existing subsidies offered through the IRA and pending hydrogen hubs. Although the future of hydrogen looks different depending on who you ask, everyone could agree on one thing: colors are out. There’s no room for the hydrogen rainbow in a net zero future. All hydrogen production technologies will play a role and it's about time to shift the conversation from meaningless colors to carbon intensity comparisons.
As CCUS technologies become more developed, economic and feasible, their role in reducing greenhouse gas emissions becomes more critical. CCUS could significantly decarbonize Industrial processes and power generation, however major permitting barriers continue to plague the industry. Currently, there are no clear regulatory frameworks or standards for CCUS projects, delaying the financing and deployment of projects as developers and investors are left with major uncertainty.
Another challenge is the complex nature of these projects, which involve multiple stages and potentially multiple regulatory bodies at the federal, state and local levels. This can lead to project delays and higher costs, as developers navigate the permitting process and work to meet the requirements of various regulatory agencies. Lastly, public acceptance and lack of community engagement can delay projects even further. CERAWeek speakers confirmed how important it is to address these challenges. Calls for collaboration and permitting reform echoed through the convention center.
Although CERAWeek is historically focused on energy topics, the organizers carved out some time to discuss other sustainable development concerns such as Loss & Damage and Water Use challenges.
Loss & Damage: Loss and Damage refers to the negative impacts of climate change that are not effectively addressed through mitigation or adaptation; for example the loss of land, homes, infrastructure, and livelihoods due to extreme weather events that are becoming more frequent and severe as a result of climate change. CERAWeek did address taking accountability for these losses and addressed why it is one of the thorniest topics of negotiation with no clear mechanism for funding. First and foremost, the cost basis of infrastructure damage in developing countries is not even close to the human suffering experienced. Second, there are no cash flows associated with Loss and Damage, so that makes it a really challenging investment case. In order to align people around this fund, speakers recommended (1) Measuring quality of life and human suffering separate from the monetary value of infrastructure and (2) Reserving bite-sized pieces of larger, cash-flow generating fundraises for Loss and Damage purposes. The topic will continue to be heavily debated.
Water Use: Water is critical for the production of energy, as it is used in the extraction of fossil fuels and is an important co-product that is brought to the surface. In the U.S. alone, more than 50 million barrels of produced water are generated every day —with varying contaminants and reuse potential. Today, around 30% of produced water is treated and reused for hydraulic fracturing, water flooding and steam generation. With a fifth of the global population living in areas of water scarcity, there is 70% of wastewater being untapped in the energy industry. CERAWeek speakers acknowledged the importance of strong water management in the energy industry to reduce overall water footprints, promote resource recovery, and minimize dependency on saltwater disposal wells.
The Innovation Agora is a special track of the conference tailored to technology providers, innovators, investors, academics and industry leaders to discuss transformational technology platforms ranging from digitalization, AI, analytics, and connectivity to robotics, blockchain, additive manufacturing and mobility, and decarbonization. Energy Capital Ventures is always looking for innovation in Green Molecules™, so we spent most of our time at the Agora Pods to hear entrepreneurs present their innovations in CCUS, methane emissions management, and emissions abatement. Agora was all Green Molecules™, all day.
Founded in 2022 and backed by The Engine and New Climate Ventures, Mantel is using molten borates as the first high-temperature liquid-phase materials for carbon capture. By operating at around 600ºC the heat generated during capture is recovered as high-quality heat – reducing energy losses by more than 60% By leveraging liquid-phase chemistry, Molten can cycle between capture and release indefinitely without deterioration or decay.
What it means for natural gas: Amine scrubbing and other point source carbon capture systems tend to have high OpEx that make the economics challenging, particularly when using heat to regenerate the solvent. By focusing on solutions that cleverly leverage new materials at high temperatures, operating costs are slashed and retrofitting an existing industrial boiler or CCGT plant becomes a CapEx decision with minimal incremental costs, ensuring that projects remain profitable.
Highwood Emissions Management is a long-time staple of the oil and gas industry, providing software and consulting services on emissions inventory calculations, emissions management technologies, reduction pathways, voluntary programs and more. The company recently announced a new suite of software tools that help manage and reduce methane emissions across the natural gas value chain. Stronger emissions management can become a competitive advantage for owners and operators of energy assets. Reducing methane emissions is an essential step in securing a Green Molecules™future.
What it means for natural gas: The solution enables natural gas utilities to develop methane emission inventories, and provides guidance on reduction pathways specific to natural gas operations. The founders have unique expertise and even consult on various emissions management regulations and voluntary programs in both the US and Canada.
Osmoses is developing an advanced membrane platform technology to achieve unprecedented permeability and selectivity performance in gas separations, enabling several Green Molecules™ applications. Natural gas processing, biomethane upgrading, point source carbon capture and hydrogen production / blending / recovery are all use cases that Osmoses can address.
What it means for natural gas: This solution makes biogas upgrading to RNG 40-60% cheaper, and it also creates a cost affordable pathway for natural gas and hydrogen separation for hydrogen blended in pipelines.
M2X has created a technology to avoid flaring (and the associated methane emissions) during natural gas operations. M2X developed a Gas-to-Liquid (GTL) process that generates methanol from flare gas, and has recently started testing their pre-production units in the field.
What it means for natural gas: This is solving a major problem since typically gas is flared because there is no gas gathering infrastructure which is highly inefficient and releases methane into the atmosphere. The methanol produced is a liquid, easy to store and transport, and is a popular intermediate chemical that can easily be marketed and further converted into fuels of other more complex chemicals.
ECV’s first portfolio company, Cemvita is a synthetic biology company that uses microbes to create the next generation of carbon-negative fuels and materials across multiple industries. Cemvita provided updates on their various partnerships across all lines of business including cOre biomining, gold H2, and eCO2 biomanufacturing.
What it means for natural gas: Cemvita’s Gold Hydrogen produces high quantities of low-cost Hydrogen that is harnessed and distributed with existing natural gas gathering networks. In addition, Cemvita’s bio-methanation process converts CO2 and water into Renewable Natural Gas (RNG), using only CO2 as a feedstock and increases the availability of RNG beyond existing biosolid resources.
Gramholm supports O&G: CERAWeek 2023 experienced a shift in tone regarding the future of the Oil and Gas industry in the United States. Just one month ago the industry was given a shelf life of only 10 years. During a CERAWeek keynote, Energy Secretary Jennifer Granholm stated “we know that oil and gas is going to remain a part of our energy mix for years to come.” She then added, “Even the boldest projections for clean energy deployment suggest that in the middle of the century we are going to be using abated fossil fuels.” This shift in sentiment simply reinforces a longstanding argument regarding energy security but doesn’t absolve the administration’s resistance to collaboration over the last two years.
Schlumberger cement alternative: Schlumberger took the opportunity to introduce EcoShield as part of its SLB Transition Technologies portfolio. The technology is a geopolymer cement-free system that minimizes the CO2 footprint of a well’s construction, which will eliminate up to 85% of embodied CO2 emissions compared with conventional well cementing systems. The EcoShield system has the potential to avoid up to 5 million metric tons of CO2 emissions annually—the equivalent of removing 1.1 million cars from the road each year.
Chevron and JERA sign MOU to explore CCS projects: This MOU furthers the collaboration between the companies in the lower carbon space, following the November 2022 announcement of their collaboration on the potential co-development of lower carbon fuel in Australia and the study of liquid organic hydrogen carriers (LOHC) in the United States. JERA and Chevron have worked together to bring stable and reliable LNG to their customers over the years, and this CCS collaboration further demonstrates a strong commitment to advance lower carbon solutions.
Petrobras to pursue more green energy: Brazil's state-run oil company, Petrobras, announced it was evaluating seven offshore wind power projects along the Brazilian coastline with Norway's national energy giant Equinor. CEO Jean Paul Prates stated the company will focus on financing large-scale renewable energy projects and evaluating new partnerships with energy companies in the coming years.
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