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Hill Vaden
Alright, welcome back to EnergyCents, an IHS Market podcast that discusses all things on the intersection of energy and finance. This year, host Hill Vaden and I am here today with Paola Perez Pena to talk about carbon capture utilization and sequestration, or CCUS. Hi Paola.

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Paola Perez Pena
I'm good, what about you?

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Hill Vaden
I'm alright, I'm a well. I guess we were just talking that that you just went and grabbed a what would looks to be a sweater sitting in Houston and in the middle of summer so I applaud your ability to withstand the heat better than ice it's sitting here in a T shirt.

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Paola Perez Pena
Yeah well that as I said, that depends on you know who you live with and what type of you know temperatures were used to. Definitely not 70 seventy degree person here. I like the hot weather so.

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Paola Perez Pena
Need my jacket here at home.

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Hill Vaden
Well, it is. You're definitely in the right place for hot weather.

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Paola Perez Pena
Yeah, I know.

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Hill Vaden
So, so you're not been trading emails and communication for several months now. About CCUS or carbon capture utilization, sequestration, and I'm glad we're finally able to to get a podcast on this. This is one of the the as far as one of the more interesting and talked about topics as decarbonization becomes more and more of a consistent theme within energy, and you know, I guess one of the.

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Hill Vaden
Uh, I guess there are a lot of interesting things that that that I want to talk about today. And you know, one of them being that the carbon capture and sequestration is been around. Technologically speaking, the idea for for a very long time.

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Hill Vaden
But it hasn't scaled to the degree that that I think many, I suppose, need it to to to really meet a lot of our net zero ambition. But before we get into some of the details, that kind of the the the business and where we are.

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Hill Vaden
Uhm, can we start with some, maybe elementary discussion elementary for for me? I suppose that in terms of we've got nature based solutions, we've got technology based solutions. We've got capture utilization, sequestration that there's a lot to unpack here.

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Paola Perez Pena
Right?

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Hill Vaden
So maybe if you could help us understand, you know how to view nature based solutions versus the technology based solutions before we get into some of the detail.

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Paola Perez Pena
Yeah, yeah, of course Hill. I think that's that's a great way to start this conversation in dumb between star. Just kind of like unraveling a little bit of what this they were all of carbon capture covers and sequestration as well. So when we talk about carbon capture and sequestration, we thank tend to think of just one type of solution.

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Paola Perez Pena
However, there is more than one solution available to capture and sequester CO2. In fact, this as you mentioned, you know we can classify the carbon sequestration into 2 main groups, one being the nature based solutions and the other one being the technology based solutions.

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Paola Perez Pena
Uh, nature based solutions enhance natural processes to remove carbon from the atmosphere, so this solutions includes things like, Umm, I heard of this planting trees.

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Paola Perez Pena
Also, uh, you know some other more. I'll say it.

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Paola Perez Pena
Uhm, complex solutions like soil carbon sequestration or via charter or even using the ocean SS sync. So there is a lot of nature based solutions out there and we need to keep in mind that these these nature based solutions are used as offsets.

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Paola Perez Pena
Meaning that the projects that that use these type of solutions will compensate their emissions that are occurring somewhere else.

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Hill Vaden
And so how? If, if we're thinking about some of the nature base, I mean, it is tree planning. It is easy for me to see and understand it is. Is that the most common?

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Hill Vaden
Uhm, relative to some of the other examples you gave.

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Paola Perez Pena
Yeah, exactly, yeah that that's the most common and and that's what I you know like to bring it. Of course, like you know I'm being very simplistic here that you know there is a lot of studies around where you know to plant trees and how this is going to affect the different ecosystems. So. So yeah, the answer is is the most common because it's something that we know there is a lot of expertise on that and it's also a very low cost compared to.

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Paola Perez Pena
Other solutions out there so this This is why it's quite popular these days to use planting trees as a, you know as an offset.

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Hill Vaden
Would aesthetically I think there's a lot of value that as well, and the you may have seen it. There was an article in the New York Times this weekend.

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Hill Vaden
Uhm, looking at different temperatures in different neighborhoods in New York.

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Hill Vaden
And those with a lot of tree cover. Or, you know, make up numbers, but but 10 or 15 degrees cooler in the peak summer.

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Hill Vaden
Then those were the trees have been torn down.

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Paola Perez Pena
right?

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Hill Vaden
And I was sitting here in Houston. I mean you, you can run into Memorial Park and it's that much cool. Or some of that. Just the shade of the trees.

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Paola Perez Pena
Right?

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Hill Vaden
But but there is some sort of, you know. I suppose cooling process within the tree.

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Paola Perez Pena
Right, right?

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Hill Vaden
So I can see there's a lot of value in that how? How many trees does one you know? Are we thinking trees in a small yard or are we thinking planning big forest to have any sort of noticeable impact on emissions?

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Paola Perez Pena
Right, so, and that that's the the I will say tricky part. We are thinking of or or talking about planting or four is right growing forests, so we're talking about big large scale type of solutions, right? So when you look at the uh they micro level of these these solutions. Then you're right. Like you know there is. There are areas that used to have trees that don't have trees anymore.

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Paola Perez Pena
Then we should you know, go back to that.

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Paola Perez Pena
Uh, and that will improve the ecosystem that will prove improve the whole dynamic right? As you are capturing CIA two, you're also bringing back the ecosystem that was there before and is not there anymore, so that that seems like a natural trend and something we should do.

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Paola Perez Pena
But when we're talking about large scale deployment, we're talking about, you know, creating or focusing on huge forests. That again could have impact on on some ecosystem. So here what I'm saying is, like, you know, these solutions or something that corporations are focusing on because the locals and the easy way of deployment. But also every every stream is is is some.

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Paola Perez Pena
Is not good right? So we focus completely all our attention and investment into that. We're going to have. We're not going to have enough land. We're going to create long competition with some food crops, right? And we're going to start planting trees. Am in ecosystem that are not meant to to have trees, right? So we have it. This is our limited solution and is good, right? We have to keep it as part of the decarbonization strategy, but we should not put all our eggs into that type of solutions. And that's what.

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Paola Perez Pena
Nature based solutions are a little bit limited in in that regards.

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Hill Vaden
Are there kind of practical concerns that? I mean we we we look right now and in the American West and and there's forest fires? If if I planted a forest to offset my carbon emissions and that forest burned down, am I on the hook for the credits that I may have previously enjoyed as a result of my tree planting, or?

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Hill Vaden
Is there any sort of accountability or?

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Hill Vaden
Uh, you know, once that tree has been planted, is there a timeline on how long it takes to have a noticeable impact on my emissions credit?

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Paola Perez Pena
Uh, so that's a great question. There is a lot of uncertainty around that, and there is a lot of uncertainty because we haven't used this mechanism for long time. So so far we were talking about permanence. This is what you just mentioned. Ah, there is a lot of external factors that would affect that CO2 being sequestered in these type of solutions, like you said, like a wildfire that will release all this. You too that was captured in the question is.

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Paola Perez Pena
OK, so how are we going to account for that? What's going to happen with the company or institution that invested invested into that four? So those are a lot of questions that are still being discussed and the the the the answer is like a lot of people don't know how to treat these type of things. Like if we see it and with hearing from the permanence point of view that this solutions or most likely not going to give me a long.

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Paola Perez Pena
Not term solution because there's a lot of external factors affecting this. So from this sequence the the permanent part there is a lot of uncertainty right from the accounting part you mentioned. There is also a lot of uncertainty. There's a lot of conversations right now the experts are having and how to account for these type of offsets and there there is not an agreement yet towards this, so it's.

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Hill Vaden
Right?

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Hill Vaden
Right?

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Paola Perez Pena
Something that will see short term and I see I I see it as a as a as a good way to start making option, but in the long term is this the right solution? And that's the question that you know we're trying to answer that. That's why when we talk about technology based solutions, we have a way to monitor the solution. They they they see 02 being sequestered easier. We know a little bit how long the the the CO2 could be a storage if we injected into a geological.

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Paola Perez Pena
Uhm formation. So there is more certainty around these type of solutions versus the nature based solutions nature base are highly uncertain at the moment. They are low locals and his implementation, but there is there is a tradeoff there and I think companies should be aware of that.

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Hill Vaden
So the nature of it sounds like there's a lot of attraction to that loop calls piece, but but the permanence concerns.

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Hill Vaden
Uhm?

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Hill Vaden
You know, I, I guess dingit relatives some of the technology based solutions. So if you're looking at technology based solutions, what are the video aside from what I assume is some winning aspects on the permanence?

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Hill Vaden
What? What are the hurdles? Is it all? Is it technology or is it economics or a combination of both?

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Paola Perez Pena
Is it is mainly economics? I mean we have we have the technology that technology is mature. Will be. We've been using it for many years, so we understand the technology. You understand how to separate CO2 from other gas stream and I think the the the VIG also challenge is the economics. So we need to have the right incentives for these projects to be attractive and that is through policy.

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Hill Vaden
OK.

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Paola Perez Pena
So that that's that's kind of like they they they remained challenge right now for these type of projects.

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Hill Vaden
And if we're looking at the the the see the you and ask that the capture utilization is sequestration.

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Hill Vaden
It is one of those.

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Hill Vaden
Yes, uh, I guess easier to manage than the other.

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Hill Vaden
And in terms of some of the policy intimidate hurdles. But to make this more economic and more of a business.

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Paola Perez Pena
Well, that that's that's that complex question, because that that depends on geography or or markets, right? So when we're talking about carbon capture and utilization, right? We're we're we're talking about how to reuse or or utilize this year or two. So you know, in a way you will think OK, if I'm re using or utilizing the O2 is better for the economics and and you're right.

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Paola Perez Pena
Like if you are you're reusing or utilizing this year 2 year selling it to somebody or using it to produce something else. That's what CCU carbon copy retaliation has been. The most common type of project in the past 20 years. We've been having projects that utilized CO2 four, either the oil production but also for food and beverage, as well as fertilizers so.

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Paola Perez Pena
There's been, you know, like more of a focus on that area because they cannot mix in a way or better. They issue is that that the amount of industries that utilized you two are limited and we're talking about this technology to be a large scale technology to decarbonize some industrial sectors. So we're looking into that as a as the approach and focus going forward. Then the carbon capture and sequestration becomes more relevant.

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Paola Perez Pena
And that's actually what we've seen. You know where we actually can take this year 2 and storage or injector in a logical formation? Now the the issue there is where you're not monetizing the CO2, right?

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Hill Vaden
And where's so? If we're looking at the? The CO2 monetization is the oil industry that that the biggest.

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Hill Vaden
Uh, I guess market share of that. You mentioned food and beverage also, I mean.

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Hill Vaden
It is one you know several times larger than the others. Or is it are all fairly small?

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Paola Perez Pena
Ah, well, like they're all fairly small there, like we don't have a lot of projects. In fact, you know, like if you're looking at operating projects is around large scales. Around 21 projects, so it's you know there we don't have a lot of projects, but if we look at it from the sharp point of view, it most of the the the share market is from oil and gas companies using CO2 for enhanced oil recovery, so that's that's being the path of this.

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Paola Perez Pena
Industry now with the you know, the net zero targets and aggressive climate goals from different companies and countries. We've noticed that that is changing, so we are. They industry is actually moving away from the traditional oil and gas utilization business model to looking into sequestration and looking at, you know other type of industries like hydrogen. Hydrogen is going to be and you know.

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Paola Perez Pena
Feeling mainly by UM, the blue hydrogen focus within which includes CC CCS. We also look at some industrial industrial sectors, right? We're looking a lot at are still looking into other cement power generation as well, specially in the US. So we've seen a move away from the traditional, you know, enhanced oil recovery and oil and gas focused Amor.

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Paola Perez Pena
Towards mortified, diversify.

00:16:07.740 --> 00:16:19.270
Paola Perez Pena
I sectors in that's that's quite interesting because it seems like CC I will be driving other type of industries to the DB decarbonize.

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Hill Vaden
Well, yeah, it seems like the I mean more and more conversations are, you know, happening around hydrogen and it seems cethydrogen the CCS or two sides of the same coin that that one is contingent on the other.

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Hill Vaden
To to make each kinda viable as opposed viable business.

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Hill Vaden
Is that an appropriate way to look at it or or it is?

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Hill Vaden
CCS or CCUS have a lot of running room on its own without hydrogen.

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Paola Perez Pena
Ah well, I will say dumb. It's partially partially true. I mean, one of the main drivers right now for.

00:16:55.270 --> 00:17:04.200
Paola Perez Pena
Uh, CCUS projects, is hydrogen? Uh is just like it goes hand in hand, especially in Europe, right?

00:17:05.290 --> 00:17:07.040
Paola Perez Pena
Uh, I think what?

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Paola Perez Pena
Is unique about CCUS is the the ability of decarbonize also hard to abate industries? So like things like as I mentioned before, it still or cement.

00:17:19.270 --> 00:17:49.020
Paola Perez Pena
Uhm, those we see it also coming as a potential growth market for this. This this solutions they issue with this is like again we need when IT policy incentives right and right now what is working for for the industry is being related to hydrogen in Europe so that's why you see a big driver there in in the US you've seen a little bit more on the power generation side.

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Paola Perez Pena
Uh, but that's very niche, very small so I wouldn't say that's going to be a trend right on.

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Hill Vaden
K.

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Paola Perez Pena
The other thing that is interesting is the the hops. You might hurt up those hops on our mixing multiple industrial plants and the idea is that you know we'll be able to bring CCUS a solution to multiple sectors. Not only you know hydrogen, but all sectors that by itself could be expensive, but once they are in a hub which share in transportation and storage.

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Paola Perez Pena
It make it easier and more accessible for different industries.

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Hill Vaden
So is that.

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Hill Vaden
So, so I'm not familiar with this work. Can you explain a little bit more about the hub? I mean it's it's like a bunch of industrial kind of facilities sharing the same footprint or or how do you? How do you mean the the hug process here?

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Paola Perez Pena
Yeah yeah. And and that's like great question. So when we talking about Hobbes, we're talking about a project that shares infrastructure, either transportation or it. Shares is storage, either the same geological formation, 4 multiple industries. So the way this is going to work as you will have multiple emitters, there will be capturing their CEO 2, but they will use share infrastructure.

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Paola Perez Pena
In share storage through UHM to keep this year to sequestre so that will create you know that would reduce reduce. Some costs will have some economies of scale that could be. You know that could improve the economics for this specific emitters that you know before you will have to use. If you were a single emitter you will have to do your capture but also focus on transportation and storage. Now in a way.

00:19:44.480 --> 00:19:48.810
Paola Perez Pena
You can share that calls with with our emitters near you.

00:19:48.280 --> 00:19:54.390
Hill Vaden
And where, where are these hubs happening here? Are they happening in certain states or or certain countries?

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Paola Perez Pena
So they helps are happening are happening all over Europe is one of the main leaders on this this this type of business model specially the UK. They got a lot of funding from the the the UK Government to a star.

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Paola Perez Pena
Uh, putting together this hop, so we'll see. There are multiples on multiple hubs in UK being developed, and they're kind of taking the lead. We have also one very well known in Norway, the Northern Lights.

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Hill Vaden
OK, sure yeah.

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Paola Perez Pena
There's also vu. See there's also the government. Also put our funding towards that. So a lot of the governments have been backing up these initiatives, and that's what they're moving and making progress. So their family Europe is is is leading this type of projects. But then we have one also. Or we have actually multiple here in in in the US and Canada. Canada has a small one that is operating right now.

00:21:02.840 --> 00:21:32.910
Paola Perez Pena
And it has two facilities that chair transportation and storage so but they they just have those two facilities. So is I'll say, in a way it's a small one compared to once in Europe. In the US we have a lot of hops being a man being investigated and and trying to understand how the the whole system we work. And I'm pretty sure you're aware of the announcement that Exxon data on.

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Paola Perez Pena
Few months ago, on focusing then hop for the golf costs as well. So so there is a lot of, UM, interest on this type of business models on it. It seems that it's gonna is gonna bring cost down and it could be a way to bring more emitters into this type of solutions is just again in in in euro we saw a lot of government support to make this happen. The question is like what's going to happen here in the USA.

00:21:35.070 --> 00:21:35.800
Hill Vaden
The ship channel.

00:22:04.160 --> 00:22:09.980
Paola Perez Pena
And in order regions to make these hubs happen going forward.

00:22:10.650 --> 00:22:20.880
Hill Vaden
In the is the UK, Norway example or or they kind of the the furthest along in the one that we should watch his potential blueprint that that other parts the world can copy?

00:22:21.930 --> 00:22:52.380
Paola Perez Pena
Yeah, I will say yes, specially 'cause they they are involving a lot of emitters. So Canada is one example is is is is is a small project that is working and it's it's it's it's. It's successful example so it's something that we can look into. But the interesting part of the European projects is that they involve multiple emitters, so we're talking about 4-5 and they're looking at different ways to transport CO2, not only.

00:22:52.770 --> 00:23:05.630
Paola Perez Pena
Now through pipelines but also using cheats or like any shipping. So is there they're looking about different different business models and I think we should definitely keep an eye on those.

00:22:59.000 --> 00:22:59.410
Hill Vaden
OK.

00:23:06.100 --> 00:23:11.750
Hill Vaden
So you mentioned shipping. What are some of the other industries participating in the hub concept out there?

00:23:12.800 --> 00:23:44.570
Paola Perez Pena
Ah well, we have it it? It depends on on the the hub, so there are multiples, right? So we're talking about like on industries like power generation, right, chemicals, production, even cement, waste to energy facilities. So they are with their looking. The way is working in the UK is they? They? They identify a what they call a cluster of industrial emitters so multiple.

00:23:20.760 --> 00:23:21.230
Hill Vaden
OK.

00:23:44.850 --> 00:24:07.500
Paola Perez Pena
Facilities that have high emissions levels and they try to come, you know, developed infrastructure to transport in the CO2 and storage this year too. So there are multiple. There are multiple players there and it it it. It varies by by hub or by industrial cluster.

00:24:08.810 --> 00:24:10.590
Hill Vaden
It is the hao.

00:24:11.790 --> 00:24:14.790
Hill Vaden
In in terms of proximity, if if we're looking at.

00:24:15.940 --> 00:24:20.250
Hill Vaden
Where were these hubs or are going to be most you know, potentially successful.

00:24:20.900 --> 00:24:31.950
Hill Vaden
Uhm, or there's some obvious regions or areas where the geology is most conducive and the industry exists nearby or or the industries looking at.

00:24:32.890 --> 00:24:42.500
Hill Vaden
Did geology and and relocating or reciting in order to be close to that geology or does transportation alleviate any of that proximity concern?

00:24:43.390 --> 00:25:13.060
Paola Perez Pena
Yeah, so the the proximity concern is is is a big question on a big topic right now. You know like you will like to have your your emitters close to your storage because there's going to be cheaper right? Less transportation which means lower costs. So in in in Europe the way this club this helps develop is they they focus on it.

00:25:13.520 --> 00:25:42.210
Paola Perez Pena
In area that has proximity to a storage or it has also infrastructure that can, they can reuse that. That's the case of Acorn. There is one of the the hops there where they are actually planning to reuse some of the infrastructure that was previously used for oil and gas, so they're planning to reuse infrastructure. They already have a proximity to a storage or geological formation, restorage of sight.

00:25:42.870 --> 00:25:48.820
Paola Perez Pena
So they are going backwards in a way that they already have this duration infrastructure. Let's start.

00:25:49.960 --> 00:26:20.570
Paola Perez Pena
Bringing the emitters that could participate in these type of projects so at the moment I think is is focusing on proximity and and and at the moment we're very limited because we don't have a lot of information on geological. Formations are around the globe, we only know the formations that have been used for oil and gas EXPLORATION and production. So as we get more information about the geology of other type of reservoirs.

00:26:13.760 --> 00:26:14.150
Hill Vaden
Right?

00:26:20.620 --> 00:26:37.750
Paola Perez Pena
We might have more flexibility on all locating emitters to different storage so that that that's, you know, that's I think it's going to be quite relevant to get this information and to understand better where we kind of storage. More of these you too.

00:26:39.110 --> 00:26:48.390
Hill Vaden
And are you coming or are you seeing more accommodative government policy in those kind of legacy oil and gas hot spots?

00:26:49.660 --> 00:26:57.290
Hill Vaden
In terms of incentivizing the CCUS business models to come I I guess evolver defined themselves.

00:26:58.410 --> 00:26:59.420
Paola Perez Pena
Yeah, I mean.

00:27:00.630 --> 00:27:25.630
Paola Perez Pena
I think, as I mentioned before, these these type of projects are also are all getting error funding or some sort of incentive from the government because a you know a big part of the cost comes from the capture side rather than from the storage or to transportations. They are big capital investments right? But once they're there?

00:27:17.390 --> 00:27:17.680
Hill Vaden
K.

00:27:26.290 --> 00:27:32.760
Paola Perez Pena
Ah, you need to look at the capture side in some of these industries, like for power generation.

00:27:32.810 --> 00:27:49.840
Paola Perez Pena
Turn up the capturing or incept separating this year 2 from the gas stream is is quite expensive, so the project the whole project and and the players need to have some sort of incentive from the government to make it happen. So that's what is relevant.

00:27:50.530 --> 00:28:04.230
Hill Vaden
When you are looking outside of the, I guess the government space and into more of the corporate space or you see I have we seen in emergence of leaders in terms of who's creating, you know some IP or on the capture side of it.

00:28:06.140 --> 00:28:08.010
Paola Perez Pena
Ah well.

00:28:09.660 --> 00:28:40.190
Paola Perez Pena
There there are some traditional companies working on on on there, but I wouldn't say there is a. You know clear leader on on on the on this market there. As I mentioned before that the technology has been around for multiple years so there is a lot of companies with expertise or separating CO2 from our gas streams. So right now I think the the projects that are operating there just like.

00:28:40.350 --> 00:28:43.600
Paola Perez Pena
They've been using different technology developers.

00:28:44.450 --> 00:29:14.780
Paola Perez Pena
And there's no like a clear leader at the moment. One thing I've noticed is there is a lot of startups working in like more efficient ways or or solvents to separate the CO2 from from gas streams. So that's what we've seen there. Is there is the market is quite fragmented and I think there is still a lot of room for for efficiency gains and and and the next generation technology. So maybe we have a next generation.

00:29:15.440 --> 00:29:19.450
Paola Perez Pena
Think knology, we might see some leaders there, but at the moment is very fragmented.

00:29:20.940 --> 00:29:28.370
Hill Vaden
And so so for looking forward, I mean we've said a couple times on this that that the technology has been around for awhile.

00:29:29.820 --> 00:29:45.770
Hill Vaden
What are the catalysts that that were watching for for when things kind of convert from, say, the old world in to a new world where this becomes more of a scalable and I suppose in many ways money making business.

00:29:46.400 --> 00:30:07.120
Hill Vaden
Uh, that allows for more investment, I mean, and and when I'm looking at this from, you know, I. I guess some proximity but but not as close to Someone Like You. This seems to be like the the the the Holy Grail that if we're going to meet these net zero targets, we gotta get this code. Carbon capture and sequestration. Side kind of figured out in a way that is truly scalable.

00:30:08.290 --> 00:30:12.520
Hill Vaden
To address the emissions that otherwise you know, I'm not sure how.

00:30:13.430 --> 00:30:14.290
Hill Vaden
Get addressed.

00:30:15.710 --> 00:30:30.260
Paola Perez Pena
Right, right? So I think there are couple of things here where you mentioned the 1st I'm talking about. Like you know, what are some of this as Sala raters or factors that could take the industry to a next level.

00:30:30.720 --> 00:30:44.150
Paola Perez Pena
Uh, but one of them is is the economics. I mean there is just a simple as that we need. We need the right incentives for the economics to be attractive and you know that's true policy. So that's that's number one.

00:30:45.180 --> 00:31:14.680
Paola Perez Pena
If we don't have that, we don't think we're not going to be moving on. You know ahead with this industry and that that's a little bit of them certainty around the industry as well. We just need the policy right policy? Then we need a more innovation. We know there is. As I mentioned before, there is that the technology is already there in his mature, but we need next generation technologies. So if if economics is still a big challenge, then let's start looking into.

00:31:14.810 --> 00:31:46.000
Paola Perez Pena
30 knowledge that could bring costs down. It could be more efficient, so that's that's another thing that I think a lot of companies are working towards and we could see maybe some good progress on this and they could help us move ahead they industry and then also all the infrastructure right? Having any support from the government side or corporations getting together and and developing this front structure.

00:31:46.290 --> 00:32:16.900
Paola Perez Pena
Would need for these projects. Will be very helpful so having that infrastructure there will also facilitate some of these projects as well. And just having a clear regulatory framework for operating projects right now for the upcoming projects. So that will definitely you know, like bring some of answer. Some of the questions and bring more. So I'll say more and more.

00:32:17.310 --> 00:32:33.410
Paola Perez Pena
Bring, uh, they they they investors that confidence that they need so they can, you know, fell in a way saved better. These projects are lists are they know what to expect from them in a way.

00:32:34.160 --> 00:32:38.440
Hill Vaden
And and on the infrastructure side of things? Or is there opportunity to?

00:32:38.630 --> 00:32:45.460
Hill Vaden
Uh, repurpose much of the legacy infrastructure that might be used for transportation of other.

00:32:46.030 --> 00:32:47.540
Hill Vaden
Uh, forms of energy.

00:32:47.920 --> 00:32:57.160
Paola Perez Pena
Uh, we yes, yes and no. That that depends on case by case because the infrastructure in the pipelines that we build for oil and gas.

00:32:57.220 --> 00:33:29.680
Paola Perez Pena
Does it have different specifications? They are they face different type of environment so some of them can be like in the UK. As I said there is this hub with this project called ACORN. They are using that and they are being able to reduce the economics quite a bit because they're just they don't need to invest in the infrastructure infrastructure, they're reusing that one. So there is there is oppurtunity there and I think you know like.

00:33:13.600 --> 00:33:14.030
Hill Vaden
Uh-huh

00:33:30.340 --> 00:33:38.010
Paola Perez Pena
Identifying those could be the first step in some of these projects to make the economics more more attractive.

00:33:39.430 --> 00:33:45.840
Hill Vaden
and if we're thinking you know on kind of a a future timeline where CCUS seems to be kind of.

00:33:47.070 --> 00:33:57.970
Hill Vaden
Yeah, I I guess in a sense, right at the edge of scaling. Or you know, having more of an impact in the future than it has over the past ten years or so.

00:33:58.730 --> 00:34:01.150
Hill Vaden
Or are you expecting us to to get to that edge?

00:34:01.640 --> 00:34:03.310
Hill Vaden
Uh, within the next.

00:34:04.300 --> 00:34:13.040
Hill Vaden
Year Week 10 years. I mean how should we be looking at it in terms of that noticeable impact on our net zero ambition?

00:34:08.130 --> 00:34:08.330
Paola Perez Pena
The.

00:34:13.400 --> 00:34:39.520
Paola Perez Pena
Yeah, well, I wish it wasn't next year. Ah now so OK. So this is the thing CCUS is going to be just one of the technologies there is going to help with the decarbonization strategy right? So I CCUS will be contributing to that, but it's not going to be a one of the leading players because there is other technologies.

00:34:39.570 --> 00:35:09.780
Paola Perez Pena
There are, uh, moving faster that are economically make more sense, like renewables like you know, sometimes even a efficiency gains things like that, so CCUS will will grow and will be part of the urbanization, but it's going to be mainly focusing on the specific technologies that are hard to decarbonize, so just keep that in mind the the that that will be kind of like the the focus of this type of technology.

00:35:09.840 --> 00:35:40.560
Paola Perez Pena
So that's where we see it up. So with that in mind, I know the although there is small portion of the the big emissions pie, we still need to grow the the industry quite a bit. We're talking about, you know, double in the industry every five years. If we wanna meet the net zero missions from the heart to decarbonize sectors, right? So which is a small part? Uh, now based on the current.

00:35:34.190 --> 00:35:34.540
Hill Vaden
Right?

00:35:40.840 --> 00:35:53.890
Paola Perez Pena
Project announcements, we've seen that you know, in in the next five years we could be on track on on track to develop the emission reductions that are expected from CCUS.

00:35:54.460 --> 00:36:09.190
Paola Perez Pena
A man in, you know. Going forward, we could continue with that trend will need to double the industry every five years to meet what is expected from the industry. So so far it seems promising.

00:36:10.300 --> 00:36:41.050
Paola Perez Pena
Again, there is a lot of, uh, announced projects that are in early stage of development that they are waiting for a more formal policy, uh structure, specially in in in Europe and also in in the US. So we've seen governments moving towards towards the supporting the industry. The question is how fast this is going to happen and it's going to be enough for investors to be interested in putting the money there.

00:36:19.670 --> 00:36:20.030
Hill Vaden
Yeah.

00:36:41.460 --> 00:36:43.240
Paola Perez Pena
Ride on in.

00:36:42.310 --> 00:36:42.770
Hill Vaden
Yeah.

00:36:44.470 --> 00:36:47.600
Paola Perez Pena
We'll see in the long term it that's gonna happen where we are.

00:36:48.330 --> 00:37:18.340
Paola Perez Pena
Optimistic just because they they. Our short term view seems that we're growing at. We were close to be growing at the rate that we need to, but right now there is still a lot of dependency on on the policy and until that establish an well defined by the governments, we will know how they industry, how fast the industry growth and then the long term.

00:37:18.860 --> 00:37:33.190
Hill Vaden
So really, we're thinking 5 to 10 years is really the the the space to watch for. You know, I suppose action over the next zero to five years will probably see a lot of press releases. Like to say press releases or cheap.

00:37:33.980 --> 00:37:50.270
Hill Vaden
But but in terms of like actual steel in the ground kind of projects and and impact will probably looking 5 to 10 years contingent somewhat on policy? Assume that allow the investment, will you know follow quickly if if not lead. Some of that policy.

00:37:34.430 --> 00:37:35.150
Paola Perez Pena
Correct?

00:37:50.860 --> 00:37:56.770
Paola Perez Pena
Yeah, exactly, that's five years is gonna be there the next five years are going to be crucial for the industry.

00:37:51.100 --> 00:37:51.720
Hill Vaden
Uhm?

00:37:57.710 --> 00:38:04.800
Hill Vaden
OK, well maybe to wrap up just kind of a perhaps a a an oddball question, at least for me.

00:38:04.850 --> 00:38:10.750
Hill Vaden
Do you know we we we? We talked earlier about hydrogen and CCUS being two sides to the same coin.

00:38:11.280 --> 00:38:22.040
Hill Vaden
Uhm, a coin that doesn't get a lot of attention these days is to coal industry that to the CCUS could a viable CCUS industry revitalize?

00:38:23.170 --> 00:38:28.800
Hill Vaden
Coal, which has you know what worked its way out of power generation in favor of lower emitting.

00:38:29.450 --> 00:38:37.500
Hill Vaden
Uh, fuels, but if we're able to sequester CO2, did this at breathe a second life. And the coal industry.

00:38:39.620 --> 00:38:43.050
Paola Perez Pena
That is, that is like a good question, uh?

00:38:43.930 --> 00:39:14.330
Paola Perez Pena
So the way I see, you know CCUS is as enabler and a xcelerator of the the the net zero targets. For hard to avoid industry or hard to decarbonize. So in in. In that sense you know like the power generation industry does will now play like a driving role for for the industry and and you know the reason for that is just it's simple, it's renewables like.

00:39:14.390 --> 00:39:18.410
Paola Perez Pena
You know we're looking at the economics and you know it's it's easier to.

00:39:19.020 --> 00:39:49.190
Paola Perez Pena
Do install renewables is cheaper, so Dan Dan to even put a CCUS plan into a existing power generation facility. So just with with you know with with that simple explanation there, I don't think that you know the CCUS industry will reinvigorate the coal industry at all. It will be one of those things that is case by case is going to be very niche. So in some cases it will keep some plants.

00:39:49.240 --> 00:40:06.710
Paola Perez Pena
Running for longer, that that's true, but I think those cases will depend on, you know, like the specifics of the project, the government support as well in their location, right? But you know talking about you know they they the big picture.

00:40:00.910 --> 00:40:01.430
Hill Vaden
Sure.

00:40:07.410 --> 00:40:08.220
Paola Perez Pena
Uhm?

00:40:08.850 --> 00:40:38.680
Paola Perez Pena
It will be hard to say that is reinvigorated like the is gonna is done. Click maintained is going to maintain some of the plants are running right up, but it's definitely not gonna continue like incentivize the growth of these type of plants or these they use of coal so those specific projects that are the makes sense to include and retrofitted CCUS there. They will keep it running for for longer but.

00:40:38.800 --> 00:40:51.490
Paola Perez Pena
You know, in, in and you will see these more, maybe in Asia as well. But you know, we talk about the US. Let's just a different story. And just like a lot of plants closing so, so I mean.

00:40:48.210 --> 00:40:48.620
Hill Vaden
Yeah.

00:40:52.410 --> 00:40:57.800
Paola Perez Pena
As just a case by case and he's now reinvigorated it at all in my opinion.

00:40:57.420 --> 00:41:04.400
Hill Vaden
So more more project by project, potential and and maybe it sounds like more application potentially in developing economies rather and.

00:41:05.560 --> 00:41:07.160
Hill Vaden
To develop, you gotta means which I've.

00:41:07.760 --> 00:41:09.650
Hill Vaden
You know, for all intents and purposes, build on.

00:41:10.030 --> 00:41:41.150
Paola Perez Pena
Right, right exactly and and the way I see it is just like, you know, like This Is Us will be a solution that will bring reduction of emissions in a in a relative short term. But eventually, like you know, as we move into more sustainable solutions we will face out of that in, you know, like in the case of call or probably gonna just is gonna die at the end of the that out so.

00:41:41.220 --> 00:41:50.390
Paola Perez Pena
It's just a matter of like what it was standing. It went in is needed for specific cases, but maybe I is that we're going to replace it.

00:41:51.420 --> 00:41:54.280
Hill Vaden
Yeah, get back to where it once was.

00:41:52.850 --> 00:41:53.780
Paola Perez Pena
Uh-huh

00:41:55.270 --> 00:42:11.840
Hill Vaden
Alright, well this has been very helpful. I I have very much enjoyed the conversation with which as we said it's been several months in in in the working so so it was everything I expected it to be so so thank you for for for joining and I look forward to doing it again. It as more information comes out.

00:42:03.290 --> 00:42:03.800
Paola Perez Pena
yeah.

00:42:12.270 --> 00:42:19.620
Paola Perez Pena
Yeah, of course. Thank you for having me. Here is always nice to talk about this topic and looking forward for the next podcast.

00:42:20.270 --> 00:42:21.760
Hill Vaden
Alright, thanks Paola.

00:42:22.090 --> 00:42:23.470
Paola Perez Pena
OK, bye.