July 06, 2023 • Paul Rodden • Season: 2023 • Episode: 228
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Welcome to The Hydrogen Podcast!
In episode 228, Okay, I want to try something different today, when you send me emails, I take them to heart. And one subject that I get asked is how do I choose what I want to talk about on the podcast? The hydrogen podcast was started over two years ago with my business partner and Co-creator of the show, William Rutledge. We started this show with the idea of wanting to be advocates for the hydrogen economy and leverage our backgrounds in energy and finance investing to discuss the economic factors that will need to happen in order for hydrogen to play a key role in the energy transition. We routinely have meetings together to discuss the industry and share conversations that we have had with members of the hydrogen community. This has helped us gain an understanding of the movements behind the scenes on what companies and policymakers are doing to propel the hydrogen economy forward. I thought I would share a snippet of one of those recent meetings is I think we touched on an important issue that's plaguing the short term potential of hydrogen, Also thought it would be fun for you to see a behind the scenes look at how these conversations lead to the ideas behind our podcast, I'm going to cut into the conversation to save some time and to get you the information you are going to find interesting. I hope you enjoy.
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Paul Rodden 0:00
Okay, I want to try something different today, when you send me emails, I take them to heart. And one subject that I get asked is how do I choose what I want to talk about on the podcast? The hydrogen podcast was started over two years ago with my business partner and Co-creator of the show, William Rutledge. We started this show with the idea of wanting to be advocates for the hydrogen economy and leverage our backgrounds in energy and finance investing to discuss the economic factors that will need to happen in order for hydrogen to play a key role in the energy transition. We routinely have meetings together to discuss the industry and share conversations that we have had with members of the hydrogen community. This has helped us gain an understanding of the movements behind the scenes on what companies and policymakers are doing to propel the hydrogen economy forward. I thought I would share a snippet of one of those recent meetings is I think we touched on an important issue that's plaguing the short term potential of hydrogen, Also thought it would be fun for you to see a behind the scenes look at how these conversations lead to the ideas behind our podcast, I'm going to cut into the conversation to save some time and to get you the information you are going to find interesting. I hope you enjoy.
Paul Rodden 1:18
So the big questions in the energy industry today are? How is hydrogen the primary driving force behind the evolution of energy? Where is capital being deployed for hydrogen projects globally? And where are the best investment opportunities for early adopters who recognize the importance of hydrogen? I will address the critical issues and give you the information you need to deploy capital. Those are the questions that will unlock the potential of hydrogen. And this podcast will give you the answers. My name is Paul Rodden. And welcome to the hydrogen podcast.
William Rutledge 1:47
Well, Paul, that's a great point, though. I mean, if you think about the state of the industry, right? Like, what, two, three years ago, we were talking about, you know, hydrogen being on path for 2050 to really start, you know, accelerating the timeline of everything happening. And then you have the Ukraine War, Russia invades, and now we're talking like global global energy crisis, right? Everybody's reinventing how they are gonna get their energy.
Paul Rodden 2:16
The thing is, you look at energy timelines, right. And oil has had, what, 130 years of growth, and even even renewables, wind, solar, they've had 40 to 50 years to get where they are today. And now with hydrogen, you know, originally, everyone's talking about net zero carbon neutrality, by 2050, and hydrogen coming in so strong, that I mean, now we're just looking at 10 to 15 years for this industry to develop, they're really pushing it hard. And it's gonna be important for everyone to understand the needs that we have now, energy needs globally. And the best ways to move forward without trying to force something where it shouldn't belong. And with everything being shortened on timelines, it's going to be critical that everyone has... just takes a deep breath. They think about it, and they don't try to push something where it shouldn't be. And I'm not talking about any specific technologies, colors, whatever it is just, and i'm not syaing hit the brakes either keep going hard, but do so responsibly.
William Rutledge 3:48
What I think is interesting in the industry as well, is that you're starting to see, you know, especially in kind of the media side of things where the industry is almost turning on itself a little bit where you know, last year, you had massive amount of investments. And so we had a number of projects, and this was very exciting. And we're going going going, and then all the projects need to be built out. So now we're starting to get into these debates like oh, what's the best technology and oh, you can only use electrolyzers with, you know, with solar or wind or you know, additionality clauses thing that yeah, coming into. I mean, it's, it's, it's interesting. I mean, it's, it's a tough conversation when you start to think we need all of these technologies to work together. We need hydrogen and we need solar. We need oil. We you know, we need natural gas, that all has to work together in order for us to Yeah, and nucular , to get us where we need. Our energy demands are growing, they're not shrinking. So to me, it seems like we need to we need to change the conversation and move it back to how does all of this work together? Not what is the one stop solution.
Paul Rodden 5:00
To really echo that's that's a good point. Just look, just look at the IRA. Right? We're now we're starting to see some some bickering and some infighting with hydrogen hubs, who's going to get that, that money, that IRA money, there's plenty to go around 8 billion dollars is gonna go a long way, you know, hivelocity is out there, West Virginia is out there. And there are some other hubs that have also been encouraged to continue their submission process. There's plenty of capital. And that's just government funding, not including any kind of private capital that can be allocated to this. Also, we all will have to work together for whether it's ammonia exporting, or using hydrogen internally with synthetic fuels, or transportation, whether it's direct hydrogen fuel cells, internal combustion engine, whatever it is, you know, all of these hubs will have to work together to set up the infrastructure needed for cross country travel.
William Rutledge 6:00
Can you imagine... you're a hydrogen tech company, you know, and today you thought you had, you know, 10-20 years to get that figured out. And now someone's throwing, you know, $70 million at you and going, Okay, let's go and gotta figure it out.
Paul Rodden 6:19
Get this tech developed! Oh, we got 10 years, right? No, I want to see a demo next year.
William Rutledge 6:27
Man, you know, and the big challenge right now? I mean, well, I guess two, I mean, for me, like, number one is offtake. But number two, is the transportation of it. They're talking... Yeah, you can, you can ship ammonia round. Sure. But unless you're, unless you're invested in like a hydrogen hub, like that concept of taking it more locally, so you don't have to, you know, ship it or truck it, you know, the gas line thing, I think, you know, that's, that's a non starter, like they're gonna have to, you can't pump it through existing gas lines. So that's a little bit of money they're gonna have to invest in to do new new lines.
Paul Rodden 7:08
Well, in there, there are a lot of issues when it comes to pipe blending. You know, the hydrogen and natural gas lines, there are a lot of issues.
William Rutledge 7:16
That's why I think the hydrogen hub concept is so interesting.
Paul Rodden 7:19
I do too.
William Rutledge 7:21
I mean, let's use this as an example. Like it, let's say you're a city manager, right now and the United States, you know, you have to meet some some hard targets, right. So you, you create a waste to hydrogen facility that is pulling, you know, using your your landfill dump, as as feedstock. So right there, you're, you're generating enough hydrogen to then power your city buses, and let's say your garbage trucks that are going to pick up stuff, you can start doing municipal buildings that you could use the Bloom Energy. I think there was a great interview on the podcast recently about Yeah, about their technology. So power generation, emergency power generation. I mean, Texas is going through that. Both sides, you know, winter and heat. I mean, with like, the month of April, and maybe October, you guys are good.
Paul Rodden 8:22
I think we are predicting record a record draw this year from ERCOT.
William Rutledge 8:28
Yeah, I mean, there are a number of solutions that hydrogen solve. And I think that it's really about just finding creative solutions and then acting on it. The solutions are there now.
Paul Rodden 8:40
I don't even know if you could call it Middle America, but it would be think of Denver, Dallas, Austin, Minneapolis, St. Louis, you have these large metropolitan areas within the middle of the country where it could be hard depending on weather events, things like that getting energy in and out of if these cities became energy, not necessarily energy independent, but where they can leverage their own resources to begin creating the energy that they need for like you were saying, buses or their facilities, construction equipment as it migrates over to fuel cells, which you know, JCB is doing caterpillar is doing. You know, a lot of these big companies are doing that and they're eventually going to be able to sell to those. And they also have, you know, large trucks, semis, class B, and class eight vehicles.
William Rutledge 9:34
Did you see the new Hyzon truck that came out?
Paul Rodden 9:37
William Rutledge 9:38
That 200 Watt single stack? That's gonna be cool. It's gonna be cool.
Paul Rodden 9:44
I can't wait.
William Rutledge 9:46
You know that industry is gonna be really interesting. And it feels like that's the first one that's going to come you know, heavy industry, like cement, you know, ammonia, that kind of stuff for fertilizer, but they really push it hard for the trucking. It's gonna be interesting to see who comes out? I don't know, as you know, not the leader, but who's gonna survive the coal here?
Paul Rodden 10:07
Well, yeah, Who's gonna survive? And you know, what I haven't heard. So I hear a lot about Nikola, and Tesla. I haven't heard anything from Daimler or Volvo, or the other ones that have been talking about it. I know, they're still working on it. But I wonder if they're just kind of sitting back being like, let's see what happens to these other two startups.
William Rutledge 10:28
You were hearing that with like, consumer automobile? Well, you know, then they were announcing these exciting projects or whatnot. But I mean, really, if the, if the refueling infrastructure isn't there, you know, people aren't gonna buy it. I see a different case for the heavy trucking industry, because you can set up hub and spoke, where it's literally like, you know, I'm swinging back to base, I'm going to refuel at the, you know, my Amazon truck is refueling at Amazon, I go do my route, I come back, I park the truck for the night. You know, I'm good to go. So I think that that's, it's definitely more of a workable scenario. And we you know, in talking about the city example, I mean, that's something that could easily be done, you have like a hub spoke either, you know, one at the waste facility. So the garbage trucks roll in, they dump their load, they refuel, they pop back out. And then you could have another hub where you could you could truck in the hydrogen to that area, all your school buses, all of your city buses, infrastructure needs that you need are all right, they're gonna take care of you. I mean, it's such a, when you think about it, there's there's an easy solution there. I think it just is really just getting everybody on board and then raising the capital to get that initial, but they could they could scale it. And over time, I mean, it's not a big deal.
Paul Rodden 11:49
And the thing is, I know, like, I have worked with some cities who are pursuing that actively, and there are some hydrogen companies who are helping them out on it. Yeah, it was kind of behind the scenes stuff. So I don't want to say who it was. But it's coming. This isn't hypothetical stuff. It's it's actually in the works. This is part of what we were talking about, you know, the the 2050 Is it gonna be 2050. So be like 2035.And that's the 2050 was an insane timeline for an energy transition. And now we're talking 15 years.
William Rutledge 12:27
And they can do it. I think, when you're looking at all the subsidies that are going in, people are committed to the project of energy transition. I mean, even even the the super majors. they they were like, I mean, from what you and I both know, from behind the scenes, the pie is being divvied up. So it's really just a matter of, okay, where do we all fit in the new ecosystem of, you know, energy dominance globally.
Paul Rodden 12:53
I mean, you know, when he talks about the Super majors, super majors have been working with hydrogen for 50 years, they know how to deal with this stuff. The only thing they're adding in now is carbon capture. They know how to do this stuff. And so that's why I think it's so easy for them to step into this energy transition, and not really hurt their bottom line, because they've already been doing it for so long. I don't think I don't think people in the general public really know how much hydrogen gets used on a day to day basis in refineries.
William Rutledge 13:33
You know, blows me away, Paul, it when you start to think of diversification of your energy portfolio. Now, you know, every every single energy company out there, right now needs to be adding hydrogen to their portfolio, you know, maybe they don't have to change their entire business model, I understand the core core focus is on what they do natural gas, oil, whatever, whatever that is their core focus. That's, that's what they should keep. But, but it's just an additional, at the very least, it's an additional revenue stream that they can implement, you know, with their existing infrastructure. And it kills I mean, I mean, think about this, like, so, you know, we have a relationship. I mean, if you had, I don't know, let's say, if you had a well, natural gas, you pump it out, what, 200 MCF a day? You could, you could take this technology, plunk it down right next to the well start producing hydrogen. And there you go, you're not like it's, it's right at the source, no transportation unless you're transporting hydrogen, straight out to your offtake. But, but I mean, it's there. I mean, you think these low producing wells that you know, what are you going to do with it, you can't tie it into the grid because it's too expensive. For such a low output. So, what are you gonna do? What are you gonna do? Think about this, like, you could, if you had like, let's say 600 MCF a day, you could have that technology sitting there with like a Bloom Energy, fuel cell, self cannibalize that energy. And now you're like, greener than green. I'm gonna hate using the color sorry. Incredibly low carbon intensity, there we go. We do that. But, but I mean, it's phenomenal. I mean, you can create a solution that is sustainable off the grid, you're producing something, or if you want to, you know, the other solution would be just pumping, like having a hub that's closer to your offtake. So you gotta have a facility that will manage it, and then just truck in the natural gas. So it's, you know, it's cheaper than trucking the hydrogen. So, I mean, there was a number of options. And it seems like, if you're talking to the companies, it's a no brainer to add this kind of stuff like it's easy to do, you just need to worry about when your offtake is.
Paul Rodden 15:57
Having been in the oil field, for a good part of my life.You see, either, like you're saying these low volume wells, for natural gas, they're just your 200 MCF a day, just, it's not much, you know, they're just going to either shut these wells or flare the gas off. And that's another thing, you got flare gas, that you're just burning, that's money literally going up in flames where you could repipe, that kind of this technology, now you have your hydrogen on site. And so for these field units, field crews have their places where they stay out in the field. And you have field offices, all of that can be powered now by the natural gas that you're making on site without having to be tied back into the grid. And now you're completely autonomous, you don't have to worry about grid failures, working with grid companies, electrical companies, you're now using your own resources at the site, you're not wasting material anymore. It's a win win. And you know, this is we're, we're not even talking super majors. Here. We're talking small and mid cap companies working out in the eagleford in the Barnett in the Permian, in Appalachia, any heavy gas field didn't even have to be a heavy gas field, just anything that's not not too wet on gas. So something a little bit drier than condensate, you just take that gas out. And you utilize that you cannibalize that, like you said, and now you're off the grid, you're powering all of your own systems. And now you're green. You know, one of the things to think about is if you if you pull that flare gas, and you start using that, then all of a sudden, the light pollution that you have to worry about is gone. Because that's a big thing out in Permian, and the eagleford and things like that is light pollution, you have to make sure that these flares aren't too close to any establishments, any residential buildings. You don't have to worry about that anymore. So that regulatory issue gets pushed aside.
William Rutledge 18:01
Yeah, and I think I think that's where, you know, if you look at hydrogen location analytics, I think that comes into play. I mean, there's a lot of stuff for software out there for oil and gas. But I mean, as far as hydrogen is concerned, you know, and how that all comes into play. There's only a few solutions out there. It's gonna be interesting to see in the future, how these energy companies are willing to, to adapt, and, you know, de risk in order to take advantage of this opportunity.
Paul Rodden 18:34
You know, you brought up location Analytics, which is close close to my heart, it took oil and gas 15 to 20 years to adapt location analytics into their day to day workflows. We're now at a place where that can be leveraged now with hydrogen in its infancy, to help push it forward. To me, location Analytics has to be at the upper echelon of thought processes with hydrogen companies, hydrogen off takers, producers, transporters globally to have a platform where you can look at everything. That system is going to be revolutionary.
William Rutledge 19:16
Yeah, I agree. Well, I need to get back to some client work. So that was a good talk. And I look forward to doing it again. Same. Hey, this is Paul. I hope you liked this podcast. If you did and want to hear more. I'd appreciate it if you would either subscribe to this channel on YouTube, or connect with your favorite platform through my website at www.thehydrogenpodcast.com. Thanks for listening. I very much appreciate it. Have a great day.