October 19, 2022 • 21 mins
Catching Carbon welcomes special guest, Bobby Tudor, on episode 11! Bobby Tudor is a Retired Founder and CEO of Tudor, Pickering, Holt & Co., and is currently the CEO of Artemis Energy Partners. Bobby brings a breadth of experience to the Carbon Neutral Coalition, where he sits on the board. The CNC was formed with the stated goal of making Texas carbon neutral by 2050. Bobby notes the involvement of stakeholders from all sectors, from landowners to legislators. To achieve such goals, the state will need an “all hands on deck” approach, and must do more than just talk about solutions. Listen in as our hosts discuss what actions need to be taken to reach the finish line for the innovative state of Texas.
Carbon Neutral Coalition: https://carbonneutralcoalition.com
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:24):
Hey,
what's going on everybody?
We have a special guest with us here today who is going to introduce the carbon neutral coalition,
a group out of texas.
This is bobby tutor bobby has an extensive background in energy.
20 years at Goldman he founded Tudor Pickering Holt and company and is now the Ceo of Artemis Energy as well as sitting on the board of Heady,
(00:45):
which is the Houston energy transition initiative.
I gotta make sure I get that right.
And bobby is also on the board of the carbon mutual coalition bobby.
We're super excited to have you join us in today's conversation.
Thank you so much for being here.
Thanks guys,
I'm very happy to be here.
This is interesting stuff.
So look forward to diving in.
That's that's quite a resume and thank you at this early stage of the morning for making us feel really,
(01:09):
really inadequate with our life choices and remember everything you just said was really impressive.
Good stuff.
Yeah.
Coalition.
I mean,
so surviving really quick.
Give a quick introduction to yourself if you don't mind and tell us all about the carbon neutral coalition.
Yeah.
Like I'm a I'm an energy finance guy by by background,
spent 20 years working in the energy group at Goldman Sachs and then left and started T ph Tudor pickering Holt and company was an investment bank focused exclusively on on the energy industry and uh I retired from T.
(01:42):
P.
H.
At the end of this last calendar year and now I'm focused just on energy investing and on on working on the policy front with groups like the carbon neutral coalition and and heading to Houston energy transition initiative.
There's just so much going on in the energy world right now that the demands our attention and uh and I'm you know,
(02:03):
very happy to be in a position to to help where I can uh and so I'm I'm doing doing a lot of that right now.
Yeah,
so the CMC stated mission is is to to make,
help make texas carbon neutral by 2050.
So we'll put you on the spot a little bit.
How are we doing?
How far along are we?
Are we on the right path?
(02:24):
Well,
um look,
this is a marathon,
not a sprint.
Uh and and I am certainly of the view that the world is going to need fossil fuel production for for a very long time,
if not indefinitely.
Um but it's also clear that we need to do that in a way,
(02:45):
not just produce it,
but also ultimately use it in a way that,
you know,
dramatically and quickly drives down C.
02 emissions.
And so,
Corby Robertson pulled together this group called the carbon neutral coalition.
It it's a it's a cross sections of leaders in in texas who come from um come from the energy business,
but also from the ranching business.
(03:07):
They're royalty owners.
There are um there are environmental groups,
there are,
it's basically all the stakeholders who would would touch uh touch CC US in in any form or fashion,
uh and who have an interest in and ultimately helping us in texas get to a carbon neutral economy,
(03:28):
uh you know,
that that group has been pulled together to to work on these issues because the issues are are difficult and we have a long way to go to have everything in place that we need to have a have a functioning C C U.
S.
Business and and a and a business that will lead to a carbon neutral economy in texas.
So,
how many years into this goal,
(03:49):
are we right now,
the 2050 of you guys getting started here in the last year?
Or is this been in the works for a while?
Yeah,
look,
it's early stage.
It's not it's not as if no work was going on previous to the last year or two,
but I do I do think the last year to uh we we have,
sort of coalesced in a way that's that's new and different,
and we're bringing together,
(04:09):
kind of,
the various groups that ultimately need to uh need to,
you know,
have a say,
because we need their expertise.
And uh and so that's that's happening kind of broadly uh in in the country.
It's certainly happening here in texas,
that's what carbon neutral coalition is.
It's also what the Houston energy transition initiative is.
(04:31):
So it's it's it's bringing together all the constituents and connecting the dots,
Because the nature of this dual challenge and when I say the dual challenge,
I mean,
providing reliable and affordable energy today,
while at the same time,
rapidly and dramatically driving down our CO22 emissions,
the nature of that challenge is such that it has to be all hands on deck kind of thing.
(04:52):
Uh and that's what we're after.
Yeah,
it's uh it's interesting you say that we're always happy to hear that I always love when people say eliminate fossil fuels,
I don't think people realize how much it impacts everyday life and everything that we do.
Um but you talk about the C C U.
S and uh,
you know,
that's so from from our perspective from the audience that we reach out to here,
(05:14):
we're focused on the supply side CO2,
as you noted,
it's,
you know,
we talk about it as being an ingredient,
an integral part of a lot of manufacturing and production processes,
food processing from from beginning to end of that entire process and as the breadbasket of the world and as as the meat producer of the world,
it's it's vital to what we do.
So when we talk about CCS,
(05:35):
you know,
just pure sequestration or storage,
you know,
you forget about that,
you in there,
we forget about that usage.
And and so we're always looking for,
what are those constructive uses of C.
02,
How can we do that?
Um,
you know?
So where are you all on?
It might be within the realm,
not within the realm of what you all work on,
but being in texas and the energy producer of the world at that,
(05:58):
you know,
where are you on biofuels or alternative uses and and uh you know,
aviation fuel,
biodiesel,
things like that.
Yeah,
so we were really very much taking an all of the above kind of approach and ideally uh what we think to the degree there are economic uses of the captured C.
(06:20):
02.
It's going to make capturing C.
02 uh a a bigger and better,
you know,
business and a more effective one for driving down emissions.
So having good economic uses for the Captured CO two is absolutely central to ultimately having a good and and functioning market now,
(06:40):
you know,
for that to happen we ultimately need to have a price on it.
Uh And and in some cases there there is a price for the captured C.
02,
but on the whole there there is not really.
Uh and so that's,
you know,
that's one important milestone we we need to get to.
But while while we do have current uh you know,
(07:00):
uses for for C.
02 and you you mentioned some of them,
I think part of part of the goal here is to dramatically expand the uses of the captured CO two uh across a whole a whole range of of things and there's fantastic work going on uh in the advanced material space for example.
So whether it's whether it's building materials with uh with new forms of of concrete or or otherwise um where where Captured CO two can be put to use economically.
(07:32):
Um That's what we need.
That's what we need a lot more of.
And so you know an important sort of linkage here is a linkage between the industry and the politicians and the you know legislative bodies with our our research engines and our research enterprises.
So so our our universities,
our national Energy labs,
(07:54):
the whole material sciences industry.
You know,
those groups need to be working together as well.
Uh You know to help us turn this captured C.
02 into more and more economical uses.
Yeah,
it's really interesting.
And so I really like how you mentioned the coalition is made up of you know,
a number of parties,
everybody with an interest.
(08:14):
Does that include users of C.
02?
Do we have representation of that voice in the group to say,
hey don't forget about us exactly what Jeff is saying.
We have to make sure we have access to C.
02.
And then part to that question is it a tiered approach where for we're just gonna go ahead and store sequester that CO two.
And while research is taking place,
identify new options or or is it happening at the same time?
(08:36):
We've got utilization over here and we've got storage on the other.
No,
it's it's happening at the same time for sure.
And and we do have those players at the table uh in texas who are who are current current consumers of of the captured CO two and you mentioned several of them and you know,
the Ag world is a good example of that where where it's obviously used it at scale in in the world it's used in the exit all and gas business.
(09:02):
Uh And uh but we need we need those uses to expand uh And in advanced materials is when we really very much have have our eye on.
Uh but because the applications of advanced materials across the economy are at least in theory just really really great.
(09:22):
Uh And and so we're we're working,
you know,
every corner of this problem.
Um but you know,
the more uses we can find for the captured CO two,
the better it's just going to make the project more economic.
Uh and and it's gonna lead to lead to more projects more captured C.
02 and lower emissions.
Yeah,
I talked about that a little bit because I've read a little bit about the polymers and plastics and things like that,
(09:46):
that those seem way more viable long term than the concrete side simply because and that that's what we all default to concrete every time we talk about capture things like that.
And it's great,
it's a great use.
It's just,
I mean the plants itself generate more Co two than they could possibly use in the generation of the blocks.
But it's a great application,
we need more.
What are some of those that you well,
(10:08):
polymers,
you you mentioned polymers and and and polymers are are it's it's just a humongous market,
right?
And it's a big it's a big problem.
Not only are a lot of C.
02 emissions uh sort of created in the in the in the building and construction of polymers,
but but then we also have a separate waste stream that in many cases is very,
(10:31):
very hard to recycle.
And and creates a whole set of environmental problems on on its own.
So,
there's a ton of great work going on around using advanced materials uh in in the polymers world,
uh that will lead to lead to true,
kind of end to end uh you know,
full cycle sustainable sustainable plastics.
(10:52):
Uh and and and we think that that the application of of C.
02 to that world is potentially really,
really vast.
So,
you know,
that's another one,
you know,
concrete is is,
as you mentioned,
it's an obvious one,
but building materials of of all sorts uh actually uh you know,
uh can ultimately sort of use this technology.
(11:17):
Uh and,
you know,
we're in a world where having more sustainable building materials is really,
really desirable.
Yeah,
no,
that's that's totally agree.
That's I think we said it last week,
but the necessity is the mother of innovation and we have all this C o to the idea of just continuously putting it back in the ground and somebody paying for it isn't the the broad answer in the in the long term,
(11:40):
and no,
that can't be the long term and it shouldn't it shouldn't be the long term answer.
Right?
I mean,
uh and and look,
uh you know,
the good news is at least here in texas,
we've got great geology for actually storing this stuff.
Um and and so we can do that and we can do it in size and we can do it quickly once we get the whole regulatory regime in place for uh to allow for it.
(12:05):
But but that's not the highest and best use of the CO to write the highest.
And best use of the CO2 is to be put to work and other industrial uh you know,
applications.
Uh and that's just gonna require a lot more innovation.
Uh and uh and,
you know,
people taking risk around it is also gonna require a lot of capital.
And one of the big challenges of the of the energy transition in general,
(12:28):
and certainly of CC US is just the amount of capital required to,
you know,
get these projects done is is very,
very large.
Uh And so we need to we need to have the conditions in place to attract the capital to do it.
And and the more that we have good uses for the captured C.
02 that our economic,
(12:48):
the more capital we're going to be able to attract to the projects to get the project done.
Yeah,
that kind of leads into my next question.
Right?
You you mentioned universities earlier and but but is texas welcoming in this new research?
Right.
Is there are already a lot of this research taking place and and even outside of the university level,
maybe private research.
What are you seeing in texas right now?
(13:09):
And there must be something for you,
you know,
to be so excited about new polymers and new materials.
You know,
there's there's great work,
you know,
happening.
Uh so so for for example,
here in Houston um the welch Foundation and just recently made a $100 million gift to Rice University to start a new institute for advanced materials where where where basic and other applied,
(13:37):
you know,
research will be,
will be done uh to attack this problem,
you know,
specifically.
And one of the things I I like to remind people is that um so many of the challenges of the energy transition are really about molecules,
right?
And it's it's it's less about electrons at this point because we know how to electrify things,
(14:01):
but it's more about,
it's more about molecules and and uh and that's where we in texas shine.
Right?
We have more chemical engineers per capita than any other state in the in the in the union by a very long shot uh we have industries because of the petrochemical,
the chemical and petrochemical industry that are already here with very large R and D.
(14:21):
Footprints.
We have them working this problem.
We have world class universities and and rice and and UT and A and A and M.
And University of Houston and and Prairie View and others who are who are doing applied research in this space.
So uh it is a space where we in texas frankly should be a leader.
The pieces are in place for us to be a leader uh and and we just got to make sure that we don't squander that no,
(14:47):
that that makes that makes a lot of sense because you look at,
I don't know,
I I see a lot of initiatives coming out of California,
even new york,
but they kind of tout themselves as being that green leader but there's a more just disincentives as saying we must do,
we must have not no more C.
02 and no more no more fossil fuel cars by 2030 but that's not that's not leading,
(15:10):
that's just setting a standard and hoping that somebody does something about it.
You guys are investing in it and driving it.
Yeah.
Leading means attacking the problems,
right?
And and that ultimately means finding practical solutions to these challenges uh and and practical solutions means um economic solutions.
(15:33):
Right?
So we're only going to we're only gonna ultimately be able to change our energy systems to cleaner energy systems to the degree that we can do it in an economic way so that it is cost competitive with excellent systems.
Right?
Because we have a dual challenge here,
as I said in the beginning,
we have to provide reliable and affordable and secure energy today while at the same time driving down C.
(15:58):
02 emissions.
And uh and that means we have to we have to drive down the cost associated with driving down C.
02 emissions and that involves,
you know,
a million different things.
But C C.
U.
S.
Is one component of that and and a really important one.
So what uh what what bills what initiatives are,
(16:18):
are you you looking at right now that are that are in front of the congress there from your political leaders that that we should be following.
What should we be aware of?
What,
what do you need?
The biggest push on?
Well,
there are there are a whole range of issues here in in C.
C.
U.
S in particular that need to be addressed.
And the good news is via the new the recent congressional action related to the I.
(16:41):
R.
A.
Uh The subsidy for a project has been kind of dramatically in large.
Right?
So if you kind of check all the boxes now you can get up to $85 a ton as opposed to $45 a ton.
And that in and of itself will make a lot of projects economic in a way that they weren't economic before.
(17:03):
So that's a good start.
However,
that only matters to the degree you can get the projects permitted and and built,
right?
So that involves,
if you're gonna sequester it,
that involves these classics wells,
which there's,
I think only one in the country,
you know,
at the at the moment.
Uh So we we gotta we gotta streamline that process so that you can get classics wells permitted.
(17:28):
It also involves a lot of kind of unknown legal issues,
so for example,
uh and uh and the sequestering side of the business once it's sequestered,
you know,
who owns the liability associated with that?
Right?
And and what happens when that C.
02 migrates below ground,
uh and who owns the liability associated with,
(17:49):
you know,
there are all kinds of issues like that that have to get resolved before we're gonna have sequestering projects on a on a large,
you know,
on a large scale.
Uh And um you know,
we we also will have to build out a lot more C.
02 related infrastructure C.
02 pipelines,
uh for example,
so uh that stuff has to get,
(18:10):
you know,
that stuff has to get permitted and then you ultimately have to have to get the captured C.
02 piped to where you're going to use it or sequester it.
Uh,
and,
and you know,
we need a streamlined process to make that happen quickly.
So there's,
there's a lot,
you know,
a lot to figure out here.
Um,
that is going to require the involvement of the Legislature,
(18:33):
uh,
and industry,
but we're,
the carbon neutral coalition is meant to,
to,
to bring those groups together to try to help move the ball down the field as quickly as we can.
Yeah,
I've heard 7 to 10 years minimum beginning Class six well permitted.
If that that even remotely close.
Yeah,
I mean,
that's,
that's what it is right now.
(18:53):
And,
and we're kind of saying,
well,
that's not good enough.
You know,
I mean,
if,
if,
if our challenges is as dire as we all think it is and we really do need to drive down C.
02 emissions quickly,
We can't wait 7-10 years to permit a,
well,
that allows to sequester,
right?
So that's,
that's a good example of,
(19:14):
of where we need regulatory reform.
Yeah.
Well,
you know,
hey,
that's first off,
thank you for your time.
We really appreciate you coming on.
But,
you know,
I would kind of summarize my thoughts on it like this,
that,
uh,
we talk a lot about the frustration and how it's going to impact it and,
and all the 45 Q and Ira and all these things.
But,
you know,
what you guys are doing is what's needed most now is pushing the legislation like it's,
(19:38):
it's great to say it,
but if you get out of our own way,
then none of it happens anyway.
Like you just said,
there's only one class well permitted so far.
I think I hear one's coming online in about two years.
I know down in your region,
you got one going out in the gulf underwater,
that could be 10 years out.
So all these things sound great,
but they're not gonna help until we put some of these things.
(19:58):
So,
uh,
anything we can do to help in our small,
small scale,
we'd love to be a part of that as well.
Well,
thanks.
And you guys doing a good job of raising awareness around these issues broadly,
as I said,
this is all hands on deck kind of proposition where we need all corners of our society,
you know,
working,
working towards making this happen.
But it's important to remember that this is a dual challenge,
(20:21):
right?
We need to be making all this happen while at the same time we provide reliable and affordable and secure,
secure energy to to people today.
And there are still,
you know,
literally,
you know,
billions,
there's a billion people around the world who live in dire energy poverty and we got to serve them to write and we have to serve them quickly.
So there's a great sense of urgency around around all of this and we all have to work together to address the problem.
(20:47):
Yeah,
well,
bobby and the carbon neutral coalition doing more than just talking,
taking action,
having the right people together please keep pushing forward.
We certainly appreciate your efforts and,
you know,
we're gonna we're gonna set lofty goals,
we're gonna build out the framework to accomplish them.
And,
uh,
you know,
ultimately,
that's how we do achieve carbon neutrality.
Instead of just talking to do difficult things,
(21:08):
I have to do difficult things.
So bobby,
thank you so much,
sir,
We appreciate it.
Hope you all enjoyed this episode.
We'll catch up soon.
Hey,
what's going on everybody?
We have a special guest with us here today who is going to introduce the carbon neutral coalition,
a group out of texas.
This is bobby tutor bobby has an extensive background in energy.
20 years at Goldman he founded Tudor Pickering Holt and company and is now the Ceo of Artemis Energy as well as sitting on the board of Heady,
(00:45):
which is the Houston energy transition initiative.
I gotta make sure I get that right.
And bobby is also on the board of the carbon mutual coalition bobby.
We're super excited to have you join us in today's conversation.
Thank you so much for being here.
Thanks guys,
I'm very happy to be here.
This is interesting stuff.
So look forward to diving in.
That's that's quite a resume and thank you at this early stage of the morning for making us feel really,
(01:09):
really inadequate with our life choices and remember everything you just said was really impressive.
Good stuff.
Yeah.
Coalition.
I mean,
so surviving really quick.
Give a quick introduction to yourself if you don't mind and tell us all about the carbon neutral coalition.
Yeah.
Like I'm a I'm an energy finance guy by by background,
spent 20 years working in the energy group at Goldman Sachs and then left and started T ph Tudor pickering Holt and company was an investment bank focused exclusively on on the energy industry and uh I retired from T.
(01:42):
P.
H.
At the end of this last calendar year and now I'm focused just on energy investing and on on working on the policy front with groups like the carbon neutral coalition and and heading to Houston energy transition initiative.
There's just so much going on in the energy world right now that the demands our attention and uh and I'm you know,
(02:03):
very happy to be in a position to to help where I can uh and so I'm I'm doing doing a lot of that right now.
Yeah,
so the CMC stated mission is is to to make,
help make texas carbon neutral by 2050.
So we'll put you on the spot a little bit.
How are we doing?
How far along are we?
Are we on the right path?
(02:24):
Well,
um look,
this is a marathon,
not a sprint.
Uh and and I am certainly of the view that the world is going to need fossil fuel production for for a very long time,
if not indefinitely.
Um but it's also clear that we need to do that in a way,
(02:45):
not just produce it,
but also ultimately use it in a way that,
you know,
dramatically and quickly drives down C.
02 emissions.
And so,
Corby Robertson pulled together this group called the carbon neutral coalition.
It it's a it's a cross sections of leaders in in texas who come from um come from the energy business,
but also from the ranching business.
(03:07):
They're royalty owners.
There are um there are environmental groups,
there are,
it's basically all the stakeholders who would would touch uh touch CC US in in any form or fashion,
uh and who have an interest in and ultimately helping us in texas get to a carbon neutral economy,
(03:28):
uh you know,
that that group has been pulled together to to work on these issues because the issues are are difficult and we have a long way to go to have everything in place that we need to have a have a functioning C C U.
S.
Business and and a and a business that will lead to a carbon neutral economy in texas.
So,
how many years into this goal,
(03:49):
are we right now,
the 2050 of you guys getting started here in the last year?
Or is this been in the works for a while?
Yeah,
look,
it's early stage.
It's not it's not as if no work was going on previous to the last year or two,
but I do I do think the last year to uh we we have,
sort of coalesced in a way that's that's new and different,
and we're bringing together,
(04:09):
kind of,
the various groups that ultimately need to uh need to,
you know,
have a say,
because we need their expertise.
And uh and so that's that's happening kind of broadly uh in in the country.
It's certainly happening here in texas,
that's what carbon neutral coalition is.
It's also what the Houston energy transition initiative is.
(04:31):
So it's it's it's bringing together all the constituents and connecting the dots,
Because the nature of this dual challenge and when I say the dual challenge,
I mean,
providing reliable and affordable energy today,
while at the same time,
rapidly and dramatically driving down our CO22 emissions,
the nature of that challenge is such that it has to be all hands on deck kind of thing.
(04:52):
Uh and that's what we're after.
Yeah,
it's uh it's interesting you say that we're always happy to hear that I always love when people say eliminate fossil fuels,
I don't think people realize how much it impacts everyday life and everything that we do.
Um but you talk about the C C U.
S and uh,
you know,
that's so from from our perspective from the audience that we reach out to here,
(05:14):
we're focused on the supply side CO2,
as you noted,
it's,
you know,
we talk about it as being an ingredient,
an integral part of a lot of manufacturing and production processes,
food processing from from beginning to end of that entire process and as the breadbasket of the world and as as the meat producer of the world,
it's it's vital to what we do.
So when we talk about CCS,
(05:35):
you know,
just pure sequestration or storage,
you know,
you forget about that,
you in there,
we forget about that usage.
And and so we're always looking for,
what are those constructive uses of C.
02,
How can we do that?
Um,
you know?
So where are you all on?
It might be within the realm,
not within the realm of what you all work on,
but being in texas and the energy producer of the world at that,
(05:58):
you know,
where are you on biofuels or alternative uses and and uh you know,
aviation fuel,
biodiesel,
things like that.
Yeah,
so we were really very much taking an all of the above kind of approach and ideally uh what we think to the degree there are economic uses of the captured C.
(06:20):
02.
It's going to make capturing C.
02 uh a a bigger and better,
you know,
business and a more effective one for driving down emissions.
So having good economic uses for the Captured CO two is absolutely central to ultimately having a good and and functioning market now,
(06:40):
you know,
for that to happen we ultimately need to have a price on it.
Uh And and in some cases there there is a price for the captured C.
02,
but on the whole there there is not really.
Uh and so that's,
you know,
that's one important milestone we we need to get to.
But while while we do have current uh you know,
(07:00):
uses for for C.
02 and you you mentioned some of them,
I think part of part of the goal here is to dramatically expand the uses of the captured CO two uh across a whole a whole range of of things and there's fantastic work going on uh in the advanced material space for example.
So whether it's whether it's building materials with uh with new forms of of concrete or or otherwise um where where Captured CO two can be put to use economically.
(07:32):
Um That's what we need.
That's what we need a lot more of.
And so you know an important sort of linkage here is a linkage between the industry and the politicians and the you know legislative bodies with our our research engines and our research enterprises.
So so our our universities,
our national Energy labs,
(07:54):
the whole material sciences industry.
You know,
those groups need to be working together as well.
Uh You know to help us turn this captured C.
02 into more and more economical uses.
Yeah,
it's really interesting.
And so I really like how you mentioned the coalition is made up of you know,
a number of parties,
everybody with an interest.
(08:14):
Does that include users of C.
02?
Do we have representation of that voice in the group to say,
hey don't forget about us exactly what Jeff is saying.
We have to make sure we have access to C.
02.
And then part to that question is it a tiered approach where for we're just gonna go ahead and store sequester that CO two.
And while research is taking place,
identify new options or or is it happening at the same time?
(08:36):
We've got utilization over here and we've got storage on the other.
No,
it's it's happening at the same time for sure.
And and we do have those players at the table uh in texas who are who are current current consumers of of the captured CO two and you mentioned several of them and you know,
the Ag world is a good example of that where where it's obviously used it at scale in in the world it's used in the exit all and gas business.
(09:02):
Uh And uh but we need we need those uses to expand uh And in advanced materials is when we really very much have have our eye on.
Uh but because the applications of advanced materials across the economy are at least in theory just really really great.
(09:22):
Uh And and so we're we're working,
you know,
every corner of this problem.
Um but you know,
the more uses we can find for the captured CO two,
the better it's just going to make the project more economic.
Uh and and it's gonna lead to lead to more projects more captured C.
02 and lower emissions.
Yeah,
I talked about that a little bit because I've read a little bit about the polymers and plastics and things like that,
(09:46):
that those seem way more viable long term than the concrete side simply because and that that's what we all default to concrete every time we talk about capture things like that.
And it's great,
it's a great use.
It's just,
I mean the plants itself generate more Co two than they could possibly use in the generation of the blocks.
But it's a great application,
we need more.
What are some of those that you well,
(10:08):
polymers,
you you mentioned polymers and and and polymers are are it's it's just a humongous market,
right?
And it's a big it's a big problem.
Not only are a lot of C.
02 emissions uh sort of created in the in the in the building and construction of polymers,
but but then we also have a separate waste stream that in many cases is very,
(10:31):
very hard to recycle.
And and creates a whole set of environmental problems on on its own.
So,
there's a ton of great work going on around using advanced materials uh in in the polymers world,
uh that will lead to lead to true,
kind of end to end uh you know,
full cycle sustainable sustainable plastics.
(10:52):
Uh and and and we think that that the application of of C.
02 to that world is potentially really,
really vast.
So,
you know,
that's another one,
you know,
concrete is is,
as you mentioned,
it's an obvious one,
but building materials of of all sorts uh actually uh you know,
uh can ultimately sort of use this technology.
(11:17):
Uh and,
you know,
we're in a world where having more sustainable building materials is really,
really desirable.
Yeah,
no,
that's that's totally agree.
That's I think we said it last week,
but the necessity is the mother of innovation and we have all this C o to the idea of just continuously putting it back in the ground and somebody paying for it isn't the the broad answer in the in the long term,
(11:40):
and no,
that can't be the long term and it shouldn't it shouldn't be the long term answer.
Right?
I mean,
uh and and look,
uh you know,
the good news is at least here in texas,
we've got great geology for actually storing this stuff.
Um and and so we can do that and we can do it in size and we can do it quickly once we get the whole regulatory regime in place for uh to allow for it.
(12:05):
But but that's not the highest and best use of the CO to write the highest.
And best use of the CO2 is to be put to work and other industrial uh you know,
applications.
Uh and that's just gonna require a lot more innovation.
Uh and uh and,
you know,
people taking risk around it is also gonna require a lot of capital.
And one of the big challenges of the of the energy transition in general,
(12:28):
and certainly of CC US is just the amount of capital required to,
you know,
get these projects done is is very,
very large.
Uh And so we need to we need to have the conditions in place to attract the capital to do it.
And and the more that we have good uses for the captured C.
02 that our economic,
(12:48):
the more capital we're going to be able to attract to the projects to get the project done.
Yeah,
that kind of leads into my next question.
Right?
You you mentioned universities earlier and but but is texas welcoming in this new research?
Right.
Is there are already a lot of this research taking place and and even outside of the university level,
maybe private research.
What are you seeing in texas right now?
(13:09):
And there must be something for you,
you know,
to be so excited about new polymers and new materials.
You know,
there's there's great work,
you know,
happening.
Uh so so for for example,
here in Houston um the welch Foundation and just recently made a $100 million gift to Rice University to start a new institute for advanced materials where where where basic and other applied,
(13:37):
you know,
research will be,
will be done uh to attack this problem,
you know,
specifically.
And one of the things I I like to remind people is that um so many of the challenges of the energy transition are really about molecules,
right?
And it's it's it's less about electrons at this point because we know how to electrify things,
(14:01):
but it's more about,
it's more about molecules and and uh and that's where we in texas shine.
Right?
We have more chemical engineers per capita than any other state in the in the in the union by a very long shot uh we have industries because of the petrochemical,
the chemical and petrochemical industry that are already here with very large R and D.
(14:21):
Footprints.
We have them working this problem.
We have world class universities and and rice and and UT and A and A and M.
And University of Houston and and Prairie View and others who are who are doing applied research in this space.
So uh it is a space where we in texas frankly should be a leader.
The pieces are in place for us to be a leader uh and and we just got to make sure that we don't squander that no,
(14:47):
that that makes that makes a lot of sense because you look at,
I don't know,
I I see a lot of initiatives coming out of California,
even new york,
but they kind of tout themselves as being that green leader but there's a more just disincentives as saying we must do,
we must have not no more C.
02 and no more no more fossil fuel cars by 2030 but that's not that's not leading,
(15:10):
that's just setting a standard and hoping that somebody does something about it.
You guys are investing in it and driving it.
Yeah.
Leading means attacking the problems,
right?
And and that ultimately means finding practical solutions to these challenges uh and and practical solutions means um economic solutions.
(15:33):
Right?
So we're only going to we're only gonna ultimately be able to change our energy systems to cleaner energy systems to the degree that we can do it in an economic way so that it is cost competitive with excellent systems.
Right?
Because we have a dual challenge here,
as I said in the beginning,
we have to provide reliable and affordable and secure energy today while at the same time driving down C.
(15:58):
02 emissions.
And uh and that means we have to we have to drive down the cost associated with driving down C.
02 emissions and that involves,
you know,
a million different things.
But C C.
U.
S.
Is one component of that and and a really important one.
So what uh what what bills what initiatives are,
(16:18):
are you you looking at right now that are that are in front of the congress there from your political leaders that that we should be following.
What should we be aware of?
What,
what do you need?
The biggest push on?
Well,
there are there are a whole range of issues here in in C.
C.
U.
S in particular that need to be addressed.
And the good news is via the new the recent congressional action related to the I.
(16:41):
R.
A.
Uh The subsidy for a project has been kind of dramatically in large.
Right?
So if you kind of check all the boxes now you can get up to $85 a ton as opposed to $45 a ton.
And that in and of itself will make a lot of projects economic in a way that they weren't economic before.
(17:03):
So that's a good start.
However,
that only matters to the degree you can get the projects permitted and and built,
right?
So that involves,
if you're gonna sequester it,
that involves these classics wells,
which there's,
I think only one in the country,
you know,
at the at the moment.
Uh So we we gotta we gotta streamline that process so that you can get classics wells permitted.
(17:28):
It also involves a lot of kind of unknown legal issues,
so for example,
uh and uh and the sequestering side of the business once it's sequestered,
you know,
who owns the liability associated with that?
Right?
And and what happens when that C.
02 migrates below ground,
uh and who owns the liability associated with,
(17:49):
you know,
there are all kinds of issues like that that have to get resolved before we're gonna have sequestering projects on a on a large,
you know,
on a large scale.
Uh And um you know,
we we also will have to build out a lot more C.
02 related infrastructure C.
02 pipelines,
uh for example,
so uh that stuff has to get,
(18:10):
you know,
that stuff has to get permitted and then you ultimately have to have to get the captured C.
02 piped to where you're going to use it or sequester it.
Uh,
and,
and you know,
we need a streamlined process to make that happen quickly.
So there's,
there's a lot,
you know,
a lot to figure out here.
Um,
that is going to require the involvement of the Legislature,
(18:33):
uh,
and industry,
but we're,
the carbon neutral coalition is meant to,
to,
to bring those groups together to try to help move the ball down the field as quickly as we can.
Yeah,
I've heard 7 to 10 years minimum beginning Class six well permitted.
If that that even remotely close.
Yeah,
I mean,
that's,
that's what it is right now.
(18:53):
And,
and we're kind of saying,
well,
that's not good enough.
You know,
I mean,
if,
if,
if our challenges is as dire as we all think it is and we really do need to drive down C.
02 emissions quickly,
We can't wait 7-10 years to permit a,
well,
that allows to sequester,
right?
So that's,
that's a good example of,
(19:14):
of where we need regulatory reform.
Yeah.
Well,
you know,
hey,
that's first off,
thank you for your time.
We really appreciate you coming on.
But,
you know,
I would kind of summarize my thoughts on it like this,
that,
uh,
we talk a lot about the frustration and how it's going to impact it and,
and all the 45 Q and Ira and all these things.
But,
you know,
what you guys are doing is what's needed most now is pushing the legislation like it's,
(19:38):
it's great to say it,
but if you get out of our own way,
then none of it happens anyway.
Like you just said,
there's only one class well permitted so far.
I think I hear one's coming online in about two years.
I know down in your region,
you got one going out in the gulf underwater,
that could be 10 years out.
So all these things sound great,
but they're not gonna help until we put some of these things.
(19:58):
So,
uh,
anything we can do to help in our small,
small scale,
we'd love to be a part of that as well.
Well,
thanks.
And you guys doing a good job of raising awareness around these issues broadly,
as I said,
this is all hands on deck kind of proposition where we need all corners of our society,
you know,
working,
working towards making this happen.
But it's important to remember that this is a dual challenge,
(20:21):
right?
We need to be making all this happen while at the same time we provide reliable and affordable and secure,
secure energy to to people today.
And there are still,
you know,
literally,
you know,
billions,
there's a billion people around the world who live in dire energy poverty and we got to serve them to write and we have to serve them quickly.
So there's a great sense of urgency around around all of this and we all have to work together to address the problem.
(20:47):
Yeah,
well,
bobby and the carbon neutral coalition doing more than just talking,
taking action,
having the right people together please keep pushing forward.
We certainly appreciate your efforts and,
you know,
we're gonna we're gonna set lofty goals,
we're gonna build out the framework to accomplish them.
And,
uh,
you know,
ultimately,
that's how we do achieve carbon neutrality.
Instead of just talking to do difficult things,
(21:08):
I have to do difficult things.
So bobby,
thank you so much,
sir,
We appreciate it.
Hope you all enjoyed this episode.
We'll catch up soon.
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