IE Seminar Series: The Prospects for Large-Scale Carbon Removal via Direct Air Capture

e yeah okay I think we're going to get started um so welcome everyone and uh thank you for joining us today and we are uh live streaming so that of course includes those on online and I know there are quite a lot of people online so we're kicking off uh The Institute of the environments 2023 2024 seminar series um with this panel discussion on the prospects for large scale carbon capture or removal using direct air capture and this discussion uh certainly promises to be timely um quite engaging and I anticipate contentious and that is all that you want in a panel discussion today our panelists will be addressing direct air capture as a uh for climate mitigation in the full context of its Associated opportunities policies and the environmental concerns around that Dave WS uh who will be the moderator of this discussion he is a the Chancellor's leadership professor in the department of Economics here at UC Davis and he splits his time with the as policy advisor and Senior Economist at the Federal Reserve Bank of Dallas he's an expert in energy markets climate policy and regulation focusing most recently on the optimal role of electrification uh in the energy transition so before before I turn it over to Dave to introduce the panelists I'd like to acknowledge our sponsors of the event so in addition of course to The Institute the Federal Reserve Bank of Dallas the UC Davis Department of economics and the UC Davis Grand challenges da take it away in the back there okay great well it is my pleasure to be moderating uh this event here and thank you again to our sponsors The Institute of the environment uh the department of economics and the Dallas fed um I want to give also a thank you to the people who helped organize this event Elena Peters was indispensable um Canal Patel helped on the Dallas fed side and of course I want to thank our panelists uh who are just simply uh experts in their field and I've already been learning a a ton from them uh in the leadup to this event so I want to welcome the audience that's that's here in person as well as welcome an audience probably across the country uh certainly a large contingent in Texas and I know that the Outreach also went to a couple of the other federal reserve banks on the coast and so welcome to them as well uh I think it's a special aspect of this event to actually bring together people who care about energy and climate in California with people in Texas because in my experience splitting my time between UC Davis and the Dallas fed which of course has is situated in uh the the most energy um you know productive area of the country I've realized that there are very two two very different narratives that are going on and it's it's really important that we get together and talk about them uh so I'm very pleased uh uh that this event is doing that so I'm going to introduce our panelists and then we're going to have a discussion that's going to start just from the very basics of what is daak because I know a few months ago when I started this I I really knew very little about it um so there's going to be certainly an educational aspect as well as uh a lot of Rich content for people who are thinking deeply about decarbonization so first I want to introduce uh Emily wimberger Emily is a managing partner at huanani Partners a strategic climate and energy consulting firm and she uh was formerly the chief Economist at the California air resources board and worked at rodium uh she's a homegrown Talent from UC Davis she got her PhD in the EG Eon Department uh here which is fantastic and she really has been an incredible bridge between academic economists such as myself and and others who do the type of work that I do and policy makers it's a really important role to be able to translate our uh you know wonky papers into actionable policy and her role uh she's carved an incredible role there uh her link to Dak direct air capture we're going to be calling that DC for most of the the panel today is that she has helped to create Community benefit plans around DAC projects as well as uh try to understand the economic benefits of Dak through investment and employment so welcome Emily thank you uh Tom McDonald uh to Emily's left uh he he's uh the technological uh kind of wizard in us because he actually invented some of the DC technology uh that's being used today he's the founder he has a PHD in chemistry he's the founder of Mosaic materials which recently was purchased by Baker Hughes and now he's an independent consultant uh working with companies trying to uh develop and operationalize uh DAC facilities and he's really going to help us uh understand the technical side of Dak in layman's terms uh which I've really appreciated uh and to his left is Christopher Gould uh Chris is a managing director of carbon teravolt which is a subsidiary of California resources Corporation and uh he's had a long career essentially if if I could translate it in trying to decarbonize Legacy energy Industries he spent 13 years at Exelon helping to decarbonize uh the electricity sector and now he's working uh in Dak and he's he's uh basically bringing expertise that spans traditional and new energy and decarbonization efforts so thank you all for being here so let's get started I want to set the table for this whole discussion by uh taking stock of where we are right now in the decarbonization efforts in our efforts to fight climate change which I think is what has brought all of us uh into the careers that we have so Emily we're going to start with you how are we doing in this fight against climate change and what is the role for direct air capture it's a great question question I'm going to take it up to like the 30,000 foot level um but I think everyone is aware the IP ipcc has set a target of Net Zero by mid-century to Stave off the most uh catastrophic impacts of climate change which we are all feeling today we're feeling it in California they're feeling it in Texas it's being felt around the globe and what we're realizing is that the impacts of climate change they're not equal across communities um and there's a recognition that we need to accelerate both our greenhouse gas um reductions and also to think about where there can be carbon uh where there can be carbon sinks so where can we store carbon because it is very unlikely it says the ipcc um and the fifth National Climate assessment that just came out yesterday really pointed to the fact that we can't just decarbonize everything we need to think about where to store carbon and look towards carbon dioxide removal and that's where I think that comes into play so there's a couple different types of carbon dioxide removal there's natural where you think about storing carbon in natural and working lands and then there's technical where you remove carbon dioxide from the atmosphere and what we've been seeing is that there's just not the capacity to have the large scale removals that we need from natural and working lands and natural sequestration and that those are statements that are made by the ipcc by the fifth National Climate assessment and more recently in California where I have a history in where we are um but the governor has really dialed into needing carbon dioxide removal targets and what was laid out in the 2022 scoping plan which is California's plan to get to carbon neutrality by 2045 is that there will need to be direct air capture as part of the solution now what that means is that it's not daak at the expense of everything else it's more that this is such a catastrophic um and really Global threat that we need to have all hands on deck so while we're simultaneously pushing really hard on every industrial sector we're trying to store as much carbon as we can in our natural working lands we need to explore all the options including technical removal options such as direct air capture so I think we're in a state where we've seen that there's been a lot of progress made made um in the United States um emissions of greenhouse gases peaked in 2007 we're currently about 17 or 18% below that in the us but we still have a really long way to go if we want to get to our 2030 Target which again is to sort of um it's the target of the par Paris agreement and so it's the US's contribution to helping to get uh to reduce um to not let uh co uh to not let greenhouse gas and not let temperature rise above 2 degrees C sorry um and so really what we're looking at is we need to dive down in the United States and globally because this is a global pollutant and not just thinking about ways to Electrify um or to you know gain Energy Efficiency we need to be thinking about sort of all of the options in the toolbx and direct our cture is one of those tools that we need to explore not to say that there aren't trade-offs there's trade-offs with every decision that we make when it comes to thinking about carbon mitigation um there's trade-offs in terms of costs environmental impacts and I think we need to be very transparent about that and really lay those out on the table what we're looking at at I think we all want there to be some magic unicorn solution to climate mitigation and it's really just not there so it really is about thinking about what all the options are and what works best under different conditions and different circumstances to help achieve that Target um I think I'll kind of stop there that's great thank thank you so much Emily so let's move on to Tom Tom tell us what is Dak okay what what is D and I also want you to focus on on the uh the verifiability this is one of the questions that I had so what is the technology and can we trust it got it so you know building off of what Emily said so direct a capture is a range of proposed Technologies for using basically engineered systems to pull CO2 out of the air in a way that allows us to collect that as a CO2 stream that allows us to really directly measure exactly how much CO2 we're taking out and then using for either utilization or sequestration so what do I mean by an engineer technology well so you know there are a range of Technologies and their technology Readiness level today is really dependent upon how much from existing Industries have we been able to borrow to try and build Solutions so the first category of three I'll say is probably a high temperature approach which has been able to borrow Technologies from the way in which cement is manufactured today so what this does is uses Limestone and lime to capture CO2 is a very reactive acidic molecule it'll react with bases so you can capture it what you need to do then is process that through a high temperature heat up to 900 degrees C so this is the type of technologies that like heirloom which just opened a a pilot facility in Tracy in California is doing this is what carbon engineering is doing the challenge is that that process because of the high temperature of heat um can be quite expensive and so what we're hoping is that how can new technologies or maybe earlier in the technology Readiness level start to bring down some of those costs bring down some of the energy impact of it to allow it to be scaled faster and to be scaled cheaper so I would say the second solution to that is a sort of a low temperature absorption process and this is what clim works is working on in Iceland and Switzerland that's what uh my former company Mosaic materials is working on the idea Behind These are there are really solid materials I think the best way of thinking about these is they're not that different than sort of the Des package that you might find in a new pair of shoes so what does a desicant do is it it's basically a porest version of sand it's a porous material that takes gaseous water out of the air so your shoes don't smell musty basically you can design that's what chemists like me do materials that are very good at capturing CO2 rather than water from Air so you collect that CO2 with in a solid and then you can use a lower temperature heat mean anywhere between maybe 80 and 150° celsus to be able to get that CO2 out in a purified form and use it for something by going to a lower temperature we can use much lower te we can use you know things like heat pumps to heat these systems we can use renewable energy much more efficiently to heat them allowing us to ideally bring down costs over the long term and further enabling you to use renewable electricity sort of the earliest stage in the final category what I would say is kind of a a zero temperature swing approach to doing direct air capture and this might be something like a humidity swing approach or an electrochemical swing approach like something like a verdox that came out of MIT is working on and these are technologies that are pretty early in their sort of development stage but have the potential to really directly tap into sort of renewable energy over the coming decades for how we can sort of bring down the costs the goal over the long term is to bring down the cost and the energy intensity Associated of doing direct air capture because technology developers are actually heavily incentivized to make their process as efficient as possible Technologies only get paid for really how much CO2 you actually removing from the atmosphere in the way in which tax credits today are structured so the more efficient your process the more money you're ultimately going to be able to make doing a direct air capture plan so in that way you know many of the incentives that have come online over the past few years from the IRA are really well incentivized to making this a technology that that has a net reductive effect of CO2 in the overall atmosphere um you know one of the reason reasons that Dak has I think really taken off is to that verifiability in contrast to you know reting Force doing you know ocean alkaline enhancement you know when you create CO2 with the direct air capture process you are ultimately producing a pure stream of CO2 that you can run through a meter and allowed you count exactly how many tons of CO2 that you're producing and then you do a life cycle analysis to understand what was the overall carbon intensity that went into making that and that's how you count how much CO2 you have when you do that in an open system that can't be controlled it's much harder to understand if you're actually having an impact and ultimately you know these are products that are being purchased to offset emissions from Aviation from Trucking from shipping and so it's really important that we ultimately have you know strict accountability with respect to the CO2 that you're actually putting into the ground or into a different product actually came from the air and it's one of the reasons that the verifiability and the durability of that process is what's allowing I think Dak to have of a moment in terms of starting to go from the laboratory into the pilot into the demonstration scale um but you know this is still technologies that are quite early in their infancy and will take really decades to scale to really having I think Global level of impact and that's one of the reasons that's really important that these Technologies are getting off the ground today yeah this verifiability point I I encountered this early a few years ago I wrote a paper on voluntary car carbon offset markets and really the additionality question was Central to that and that's something that Dak overcomes because of the direct measurement possibility so so that seems like a really important Point um the other thing you mentioned is the is how uh the the need to drive down costs and get to scale leads to profitability and So speaking of money I I want to pose a question uh to Chris here um you know there's a narrative out there about Dak that it's just one way for fossil fuel companies to continue to make money selling fossil fuels is that the case is that all the dck is um no it is not um excuse me so I think Emily did a really nice job laying out the ipcc views on why carbon removal is necessary um it's a function of the CO2 that's already been put up in the atmosphere um and it's could you hold for a second I'll be happy to answer your question um and it's also a function of what we know is going to be hard to aate sector so in California for example um the carb scoping plan uh that was referenced calls for roughly 15% of CO2 emissions to be removed because they're too difficult to Abate um a lot of those sectors have nothing to do with oil and gas production per se right it's cement it's um any any building materials any number of the things that we all use in our daily lives that are difficult that there's no technology right now that can reduce those but it is not a substitute for the reduction meaning the other 85% of the emissions are what need to be driven to zero and the 15% that is hard to get to are the ones that have to be removed so I think the the UN leadership and the California resources board leadership have all identified that is a solution to that problem and it u in the absence of the reduction of the 85% of the other emission sources I suppose one could make that claim but that is not what it's called for by anybody that's seen this is a solution to the remaining 15% so um in the case of what we're doing we're applying um skills and assets towards that that objective so um the the issue of how do you measure and verify that you've captured this CO2 and sequestered it away well we're putting to work Engineers geologists people uh inside our company who previously were extracting oil and gas towards putting CO2 back in the same reservoirs from which it came from that's a good thing right those are assets that can be used towards that end um and that's that's a good example I think of of what we're doing yeah and uh there I I wrote down this quote from ARB because I thought uh I was actually responding to an email yesterday that was uh expressing some concerns along these lines and ARB uh says on their website there's no path to carbon neutrality without carbon removal and sequestration and uh so it really does seem uh that that this is a need and uh stepping back even and highlighting some of the things that that Emily said you know we are adding globally fossil fuel energy sources and so you know we're really an all Hands-On deck situation here um so that that really does uh strike me as as uh highlighting a need for Technologies like DAC um I see a hand in in the audience I I just wanted to mention we're going to have a long Q&A period at the end of the at the end of this panel discussion and so I do encourage you to hold on to your questions and even online for the live stream uh we have somebody who's collecting the questions and is going to send me a couple of them so we're going to have plenty of time at the end for for back and forth that includes the audience uh we're going to leave about 25 minutes for that at the end okay so what is the cost of DAC at the moment and this uh it can whoever wants to answer this one but you know it seems to me that it's one of the more expensive abatement options at the moment and I've even heard uh data points that the cost is going up and so you know what is the cost is it going up and what are the major components I I can start with that maybe um so the cost of doing daak is again these are very early early stage Technologies and first of a Kind demonstrations and so you know it's anywhere between you know $500 and $500 a ton is probably the range for which a lot of companies are being able to sell the credits in which they're ultimately doing a small pilot DAC project or a demonstration facility to a buyer to help build a Marketplace and that that just that's relative to a social cost of carbon used by the uh federal government of you know in the 50s or even the new generation around 185 so this is you know multiples of of the social cost of carbon at the moment right and so you know probably the most advanced public announcements about carbon costs would come from the carbon engineering 500,000 ton facility that's currently being constructed in Texas and they're anticipating for that first ofine facility using that high temperature process somewhere between 400 and $500 per ton with sort of a as you start to learn and as you start to build out a supply chain um ultimately these costs coming down so let me give the example of my former company Mosaic materials it was a spin out from something I invented as a PhD student at UC Berkeley these were designer materials you know synthesized for the first time on the milligram scale in the laboratory right and as a startup company our goal was to understand how to make them more efficiently how to improve the performance to ultimately drive down the cost economies of scale and the learnings that you do over years of development researcher ultimately what Drive the costs down and so what's really important is that as companies developing these Technologies try to understand their competitive Advantage they are ultimately looking for what are the things that I can do to drive down this cost as low as possible and ultimately the goal is to really to bring these costs down through technology improvements through Energy Efficiency improvements to ultimately make them more and more to scale to a greater level um and it's something that takes years and decades you know my material that I invented I made that for the first time in 2011 you know Mosaic was acquired 11 years later you know these are technologies that ultimately talk about decades to develop and so you know when people talk about how do we get these Technologies ready to help achieve Net Zero in 2050 it's one of the critical reasons that we need to be developing resources on understanding what are the most viable approaches to doing that today doesn't Dak require just a ton of energy I I was reading a BNF report that uh mentioned 23 kog or no gigles per ton abated which I did some math and I think that's 26 days of the average Americans energy consumption of average per capita uh energy consumption in the country that seems like a lot so are how much is Dak beholden to Energy prices and the sources of energy that we're using not to mention I'm going to follow up talking about the the carbon inputs of that I mean the whole purpose is to bring carbon out of the atmosphere and most of our energy sources today require burning fossil fuels do you want to take that sure uh so yes it does there's there's no you know free lunch here right you know um the need for these um capture facilities requires energy right it requires energy to take the CO2 out of the air and by the way just one thing I made it's carbon removal it's not a baitman right that's a key thing which which you goes back to the first question this isn't a baiting carbon that's otherwise going to go up into the atmosphere this is removing carbon that's already in the atmosphere that carbon we're breathing that CO2 right now all of us right we all know that it's so dilute that it takes a lot of energy to get it out of the air that we're breathing and um get it in a form that can be sequestered or utilized for some other purpose carbon products and things of that nature which again are kind of off in the future for now we can store it underground where it came from and we can take it out of the atmosphere it's a removal technology it's not an abatement technology there's a big difference so as a result of the dilute nature of it versus abatement which would be carbon capture coming off of an industrial Source before it goes into the atmosphere in the first place those tend to be higher concentrations right you know things like a power plant that may be running on natural gas right now that's about 45% of the power that's lighting these lights right now that has concentrations in the low double digits or single digits for CO2 all the way up to ethanol that you burn in your car right now is up in if you have a a gasoline car um up in the 90 some percent and if you're driving an EV you're using 45% in of of a fossil fuel when you plug it into the grid to do that so it makes sense to capture that CO2 so when you're driving an EV you're not burning fossil but those are much or blend ethanol and much higher the higher the concentration the less energy you have to exert to capture the CO2 and sequester it away that's why it's more expensive and that's why it costs it requires more energy but back to what Emily said um if you accept the science and what has been put out for our goals by our state and by the globe by the UN then the implications of not removing the carbon far outweigh that cost you can't wait that's what the science is telling us so what's the cost of not removing the carbon I think we're finding that out it's somewhere in this range as we develop this technology was the number you said 23 gig per ton I think so okay so I think real istically I think the best Technologies under developing development today would be able to cut that by a factor of two to three and I think over the long term we'll be able to cut that you know closer to four or five so I mean that is the goal of developing the Next Generation Technologies is to find that and I will say that you know what is really important is not just the total amount of energy you're using but what was the you know what is the availability of the heat source that you need so for example if you were to locate in a a energy intensive DAC process using geothermal energy available as Steam you have the ability to tap in directly to a heat source that is a zero form of car a zero carbon form of energy and so you want to pair your technology to a form of energy that's going to provide you energy and heat in the form that you need with zero carbon emissions and that's part of what technology design is and so those cost declines that you're saying could be there with the current technology um are those from materials advancements Energy Efficiency uh enhancements or what what are the what are the actual things that are going to bring that down uh yeah I mean I mean so a huge amount of energy so if you think of a Dack process right and so you know the one of the reasons direct air capture is expensive is there's only 420 parts per bli parts per million of CO2 in air right now you know when I first started working on that that was 390 so this is a number that's dramatically increasing right the goal is to how do we stop this as quickly as possible and so what you have to do is you have to process large volumes of air and you have to find that that's why the sort of the poorest Solas that based upon like say shoe deskin is good because you have hundreds of sort of uh football fields worth of areas wrapped up into a really small space allowing CO2 to much more efficiently find a capture site then you have to build a large sort of facility like what carbon engineering is doing now that's like one of the main advantages on finding the CO2 in the air the other is how do you bring down the temperature required um for it if you need high temperature heat then that you have to heat up an entire large steel system that has that has a heat capacity you have to heat up large amounts of air um so those are things that ultimately you bring down those that that temperature will drive Energy Efficiency both on the capture and on the release side if I may add you know back on this cost um you mentioned I worked in other sectors like the electric sector um prior to to to this the direct air capture and what we're doing now you have to remember this time Horizon that's that we're talking about when um I don't know roughly 20 years ago when when uh wind power uh became available and solar after that wind and solar were multiples more expensive than grid power at the time that's just a fact you can go back and look at all the ppas that were signed they were more expensive when they first were put into the market than the power that was being generated at the time now they're not although they're Rising again for a whole bunch of reasons but it took 10 years for both of those Technologies to become competitive with the power that we were already using but we did that as a society didn't we we all all invested in that we all paid a little extra in our rates we all did the things uh was spread out over a lot of different uh consumers because it was done through utilities But ultimately we as a society paid for that it wasn't that way it's easy to look at the result now and say that it is but 10 years prior for wind and 10 years prior for solar it wasn't that way you can't look at the cost curves that were in history and deny that it's it's just the way that that technology advances and comes down for these same reasons yeah that's a really great Point Kristen it wasn't just in in wind and solar it was in batteries as well we've seen Incredible cost declines and part of the Catalyst for that it seems was well a lot of uh subsidies in China for sure getting into economies of scale but domestically we've had policies that have really accelerated the adoption of those Technologies so Emily on Dak what are the policies that are really driving uh the growth in this industry right now um I think we mentioned sorry the inflation reduction act um so there's a provision there 45q that really does incentivize direct air capture um and it sort of brings down it reduces that green premium so it makes it more cost competitive and provides um sort of a tax incentive for there to be investments in direct air capture I think with the eye to the fact that there is a commitment there is a knowledge that this needs we need to explore this area and that we need to see um more technology out there we need to see economies of scale we want to see not just demonstration and pilot projects but large scare facilities so that really is driving that um in the US ferally there's also some Provisions um in California um there is a there is a DC uh protocol in California's low carbon fuel standard um and I think Chris sort of mentioned this but this again is thinking about what is the role in direct air capture in reducing the carbon intensity of some of the fuels that we might be needing um in the longer term in California so California is on the path to reduce demand um in production of petroleum um but there is an acknowledgement that in harder to decarbonize sectors like shipping and Aviation um that we will need to see liquid fuels and how do we reduce the carbon intensity of that so there is a rule there um and there potentially is a price premium there for low carbon fuel standard credits to be sort of lumped together with Federal standards and so a lot of this is thinking about how do we really package the incentives and do that in a way that can drive advancements in the technology but that also um does have an eye to what are the overall impacts and how does direct air capture fit into our overall climate mitigation portfolio so um I think those are sort of the main ones um but yeah we're seeing a lot of activity a lot of attention being paid to this because of those Federal incentives which really were driven by this acknowledgement This Global acknowledgement that we need to do more just not on the mitigation but also on the removal of carbon dioxide can I give a a brief thought here on the importance of you know what when I started Mosaic in 2015 daak was nowhere on the radar right and so it's really important that and I think a lot of what's happened over the last few years has been to create early markets and early incentives for people to start developing Technologies you know and I'll give the example of I don't know how many people in this room have ever heard of sun power um sun power is a major American Solar success story you know in the 90s solar was not a competitive technology I don't know who used to have a personal data assistant who had an IR transfer chip on the back of that but that was one of the early products because they had the ability to take the technology they were developing solar cells and use it and sell into a Marketplace and that's what kept sunpow around long enough for It ultimately for solar to become a more and more viable technology the incentives that are happening now the advanced Market commitments that are happening now are creating a Marketplace to get Technologies off the ground and supported in a way so they can get to develop and scaled faster um than they would in the absence of these incentives right so you have the IRA that is subsidizing the uh operating cost essentially the the output of or the the input I guess of these air capture facilities but then there's also the daak hubs that the doe is subsidizing for the fixed infrastructure and I know that uh you know you at least a couple of the panelists here have been involved in this Chris I'm wondering if you can tell us a little bit about your experience uh with the dhub I think also The Institute of environment is involved uh with with one of the Dak hubs yeah so um we co-led an application for a direct air capture Hub they were um for those of you don't know what exactly that is uh from the infrastructure Bill there was about three and three and a half billion dollars allocated out of the Department of energy to stand up for direct air capture hubs in the United States there were various levels of maturity that you could apply so if you were ready to go and build shovel ready per se that was one and then there was a middle one middle maturity where you need to complete engineering studies and then there was an early concept one um carbon terrible LED uh the successful selection of one of them uh which is a um the middle one the the sort of medium maturity if you will an engineering study and to bring that to California so we're very excited about that the other two were one is in Louisiana and one is in Texas uh they're shovel ready if you will so two of the other hubs are up for grabs uh others such as um Mosaic and others participate in the University Systems in the earlier concept ones so um basically what we have in front of us is the task of effectively what we've been talking about that's the purpose of the hubs is to create sort of a shared infrastructure that can leap frog and bring the cost down um of direct air capture in a way that that accelerates it that it otherwise couldn't have that's the concept of a hub how do you combine this infrastructure to bring overall cost down um in that project in that engineering study many of the things that we are working on are things we've discussed here today what are the energy sources uh your prior question to me what are the energy sources for these direct air captures in ours we've identified solar and geothermal these are things that California has uh albeit not necessarily easy to do or get at um they're here so we're trying to apply that towards these towards these particular uh Technologies Chris and yeah on that why not just tap into the California electric grid because it's not decarbonized unfortunately it's it's still roughly 45% of it comes from natural gas so the life cycle emissions simply would not work no more than it would um you know again we all have this challenge with you know getting through right we're not done decarbonizing the grid yet so we have to keep doing that that's one issue the second issue is California's Energy prices are exceptionally high so given the need for the the electricity um it's not competitive to do that in a state that as high rates that we do unfortunately and and also I think it's it's challenging to actually get the electricity to these sites sometimes oh yeah so you know in the um there are there are uh long lead times right they're ex they're very long lead time so if you want to put in solar for the purpose of connecting it to the Grid or and pulling it off for a project like this uh there are years there are years of wait to be able to do that so uh what we've tried to focus on is building onsite Renewables and clean energy to power the direct air capture facilities that don't require that so that we can get to it as quick as possible and hopefully at a lower cost yeah I would say one of the big changes I think over the last i' say year or two is that because of the long interconnection queue I think it was long assumed that DAC would follow The Greening of the grid but because of that product developers who are trying to deplo rable energy they don't have customers for their projects and so actually they're trying to find lithium extraction projects to make lithium batteries hydrogen projects to make hydrogen direct our capture projects because they need to find customers for the renewable energy that they want to develop and so in actuality in many ways these decar these next generation of decarbonization Technologies are actually pulling forward nonviable renewable energy projects in a way that they otherwise couldn't be right now I I completely agreee with that that's why we have chosen geothermal that otherwise we would not have gone after had we not had the requirement to do the energy and heat for our particular technology so that's that's right that's definitely a benefit can I something D yeah um I think and part of these doe um the dhub situation it's not just let's focus on bringing the cost on it's really thinking holistically about how do we actually place these facilities in locations so it's um there was a there was a requirement um for the DC application The Hub application through Doe for Community benefits plan and this was 20% of the scoring Matrix and this really looked at like how is this facility going to impact the local community in which it will be built so this looked at what is the job impact what are the diversity Equity inclusion and accessibility impacts of putting the stack Hub in how do we think about Workforce Development so there was also a nod to the fact that we're not just thinking about technology in a vacuum we're thinking holistically about how you actually Implement things in a place um that not only we think about lower cost but really acceptance we think about local acceptance and really driving investments in communities like Chris said that you know have been underserved their oil and gas-based communities that are now looking to transition into clean energy jobs and Futures so that is an additional component that Doe did require when thinking about sort of how do we think about direct a capture and the need to think holistically about it into the future yeah and Emily I want to focus on that for for a minute here so the uh environmental justice Community has had uh has expressed concerns about DAC specifically um what are those concerns why why are they worried about uh a DAC facility opening up in uh in disadvantaged communities well I think there's um there's a few arguments um one is an argument about local air pollution and anytime you have construction um there's going to be impacts on at the community level in terms of air pollutants that can affect Health um and that is a concern um we also hear a lot about um you know sort of if you're putting money Mone into exploring you know direct our capture you're not putting money elsewhere in terms of natural sequestration solutions that you know are a viable option and I think what um has what's been happening through doe and in the state of California has just really tried to B like an education um and a lot of Outreach and really trying to understand the concerns of communities who are living very close to these potential facilities um and it's really understanding their concerns when it comes to local impacts and so part of this is really doing and part of this is the Community benefits plan but thinking holistically what are the trade-offs here what are the impacts to communities in terms of changes in employment changes in investment a lot of these communities especially in Kern County um where the Dak Hub will be located um the tax basis is largely based on oil and gas revenue and as the state of California reduces its dependence on oil and gas that tax revenue is going to go away so how do you replace that how do you really support communities in a way that can help them grow and help them develop economically but in a clean way um so I think a lot of it is really trying to listen to communities hearing those voices doing Outreach um and really trying to um I think the verifiability in terms of this monitoring doing local Air monitoring around facilities and really putting things into place where you can track progress um in the state of California there is um legislation s SP 905 that does direct the California resources board to put together a plan for carbon capture utilization and storage and part of that will be um putting together sort of the timeline and the plan for how these facilities get built in thinking about holistic Community impacts and also um having sort of a database where you can track sort of what is happening at these facilities what facilities are doing what and making that publicly available so that every person in communities and in California and worldwide can really understand what's happening in these facilities and really understanding the overall impact so that is a very important piece I think that sort of the community engagement when you're thinking about locating it's not just this theoretical direct air capture but when you're thinking about putting a facility in a local community and really trying to hear those voices so I want to stick on the where should we locate these things question for for a moment because we are talking about a global stock pollutant doesn't matter whether you pull this out of the air in California or pulled out of the air elsewhere and so I'm wondering it it seems to me like the the features that are uh that are desire able for for citing doc facilities are abundant low carbon lowcost energy and the geological uh uh uh formations that are suitable to sequestration so where where do we have those around the world well I'm happy to take that um well so U you know California applied right and we we want we were were able to be selected for for multiple um multiple different phases um Awards um what my company does right along with others in California now are starting to bring forth the sequestration so you have to have the right subsurface um storage to be able to take the CO2 and securely keep it underground um and verify and monitor that right that does exist um everywhere in California and it certainly doesn't exist everywhere in the country places that tend that other places that have have won these Awards and and are have uh geology of this type uh Beyond California or places like Illinois um has uh where there's a functioning uh CCS carbon captur and sequestration project right now not daak uh an abatement project um that's been operating for the better part of of a decade um the Gulf Coast is another area uh Louisiana Texas has suitable geology um and um there are a couple other places those are largely the ones of scale right the Upper Midwest the Gulf Coast California those are probably three large ones there are other awards that were made for smaller uh locations now when it comes to Abundant renewable uh energy Supply I'm not sure anybody has that um right every state in the country is trying to reach well that's I guess not true not all states have it but it's a general ambition for Most states to clean up their electric grid with Renewables you know California has a 100% clean energy grid uh you know um requirement by by 2035 is it 2035 um and we're not there yet as I've mentioned several times so I would be disingenuous to say it's abundant otherwise we'd be doing it already right it takes time to do it so there there are some places better than others right um the Upper Midwest happens to be blessed with good wind profiles and that's where a lot of Renewables have been built in Wind sunnier locations you know have been blessed with that that have the opportunity to do to do that and here in California we have albeit likely not grid tied because of the challenges around the costs that I mentioned um onsite things such as geothermal and solar can be very well paired with these Technologies that's why I think we're been successful yeah and I can see why the because of the government support we would be pursuing these in the United States but I think uh you know what what I'm really curious about is why do this in you know one of the most expensive places to get stuff done in the world aren't there places in the middle you know again a global stock pollutant it doesn't matter where the emission you know is is made it doesn't matter where we suck it out and so why not do these in places uh like the Middle East or North Africa where there's so I'll answer quickly and then I'll invite my colleagues the the the quick answer is it they are right there's much happening in all the places you mentioned um uh Africa right um there's uh if you you know do a little research you'll see the great Carbon Valley has been announced in Kenya which has an enormous capability for subsurface storage along with Renewables that's a one example um other examples is are in fact in the Middle East in Oman and places of that nature of mineralization capabilities as well as abundant uh Sun for solar um and the list goes on and on and on there's many examples but yes it is happening elsewhere as well yeah and I think I'll add briefly to that where technologies will parir well with sources of energy in sequestration sites that are well matched for them so you know if you're a technology that actually co- harvests water out of the air you might choose to locate in a more Aid environment for which water is can be scarce and producing additional water is a co- benefit um you know if you need amp you know Oman icelands you know rapid mineralization of the water in the ground requires lots of water so you're going to try and locate those in places where there is abundant water to do that type of subsurface sequestration versus something like saline araer storage where it doesn't mineralize quite as rapidly so this is really a variety of technologies that ultimately will pair together um the other thing I'd add is you know Dak will ultimately be an enabler of essentially a circular carbon economy right so if you want the methane that goes into the Natural Gas Distribution grid if you want the the jet fuel that goes into into an airplane to be carbon negative you're going to need to find ways of manufacturing that fuel source um in a zeroc carbon way and the feed stock for that will ultimately be CO2 plus hydrogen that goes back into making a basically hydrocarbon that didn't come from fossil fuels so this is really a critical technology to making to really closing the carbon Loop of the hydrocarbons we need for those applications for which electrification or hydrogen storage just aren't valuable so on this circular economy thing so we're talking about using DAC to actually produce not just to produce uh gous CO2 to push into the ground but to actually create uh a useful product on the other end what can you tell us just a little bit more about that yeah I mean you know I mean CO2 is basically the thermic ground state of combustion right and that's why it cause takes so much energy to go back the other way you know as when energy is scarce in many ways to offset the emissions of consuming those fossil fuels um that we are still doing today then it requires less energy to do something like DAC plus sequestration than DAC to utilization back to creating a carbon fuel as more and more renewable energy comes in the grid I think there'll be an increased balance between doing basically offsetting emissions and storing them and then ultimately going back and then stopping to use the fossil fuels in the first place and creating synthetic fuel where the density or the the convenience of something like gaseous methane going into a Natural Gas Distribution grid is you know how do you get natural gas to every person you know how do you get energy to every person um that requires it you know I'm a big fan in conduction ovens and heat pumps but in New York City like you can't do heat pumps for high-rise buildings there's just not a an efficient way of getting that much energy to P to people like that and replacing the boilers that exist but we have to find ways of decarbonizing the built environment and things like basically you know using a synthetic methane Source rather than natural gas that comes from the ground will be one of the you know I think most efficient ways of decarbonizing those types of applications yeah so so I want to go to a final question which I'm going to put to each of you actually um you know I'm I'm struck a little bit by the optimism that I kind of hear about getting to that 85% reduction and only really worrying about the last 15% I person I'm much more worried about the 85% because I see that the policies that we're implementing are actually creating incentives that I don't think are going to lead to the type of decarbonization that's being forecast by the modelers and so I'm I'm much more uh kind of concerned about all of it and and the possibility of Dak being a major contributor to emissions not emissions reductions I need to yeah yeah to to is that okay with you to say emissions reductions because it's not really that but net emissions reductions um that's really what I what I because of my pessimism about the current policies that's what I would like to see and so um it seems like we're very far away from that we're in the very early stages of developing these Technologies and beginning to bring the cost down and so I'm going to ask you all to pull out your crystal balls and I'd like to know where are we going to be with Dak in 2035 or 2050 are we going is it going to be a marginal source of net emissions reductions or is it going to be you know taking a substantial chunk or what would it take for it to be um scaled along the lines of what is needed that's a good question yeah I'm going to put you all in the spot here um well I think 2035 and 2050 that's there's a a lot that can happen in that time frame um I think 2035 I think I think we're still real expensive I mean I think it's $700 a ton I don't know I mean I think um I've heard statistics that we need to get down to below $400 a ton by 2035 or there we will not see widespread doc adoption that we need by 2050 um I don't know you know if that's realistic um I do see we were talking to sort of the cost of inactivity which is basically the social cost of carbon um and if you look at those numbers out um you know those numbers increase dramatically it's about 185 in 2030 um so prices would have to come down pretty substantially for there to sort of be um you know for for dock to be marginal um I'm going to say 2035 I'll say yeah $600 a ton and I know the least so they're the ones you want to listen to Tom uh so I I have a few points on this so your BR a question right 2050 if large amounts of of achieving Net Zero are happening by deck we've totally failed in my opinion right like I mean I think like if we're relying on carbon removals because we didn't actually decarbonize the other 85% then we have done wrong right so um I believe ultimately that Dak will basically play an important role in decarbonizing things that are otherwise too hard or too expensive to decarbonize and I'm let me add one C to this right I'm a big believer in net zero and ideally even net negative and when I mean Net Zero I mean not just CO2 I mean all greenhouse gases and so if we're talking PPM for CO2 we're talking ppb for methane and we're talking talking PPT for horrible global warming potential things that like refrigerants that we're using today and we need to find ways of ultimately offsetting all of the global warming potential of those gases as well um so I think that is why Dak will have a very important role in actually achieving Net Zero to net negative carbon Cycles because it is far more viable to develop these tools than to really assume that all of these other things are just going to completely go away um I'm actually an optimist I believe that by 2030 the technological Pathways to $200 per ton deck will be known and I think it becomes a question of how much scale is required to really get that down and how quickly can we scale up those Technologies but I believe that the technical progress at the rates of funding that are today will basically say that there will be Technologies as we push forward on material signs we push forward on engineering that by 2030 someone will say yes like this looks like we can get $200 per ton deck um when we get our 10th million T 10th Megaton plan done or 30th Megaton plan done so I'm an optimist on that what's the timeline for that so I mean I think I mean I mean like these are long project right like the oxy 500,000 time for filty right that's a $1.3 billion project that has a three-year construction time right I mean so I think if you're at a Pilot or a demonstration scale around 2030 proving out the technoeconomics of a $200 per ton technology I mean you're looking of scaling that type of Technology over a 20year period of time to ideally build sort of you know hundreds of millions of tons to gigaton scale capacity by 2050 I mean so can I Well I this is awesome because I am inherently pessimistic and you're giving a light of optimism in here so I appreciate that but if we get down to $200 per ton then my view is we should be doing as much of this as possible because a lot of what we're doing now is probably much more costly than that and so we should be doing you know nothing more costly than just sucking carbon out of the atmosphere so if we try to scale this to you know as you said hundreds of megatons or gigatons what aren't we going to run into you know some rate limiting factors along materials or are do you have any concerns along that line I mean I I mean I think yes right I mean just is we were talking about earlier right as some things start to scale more and more then they start to cause them to go back up in price right so I think there will be deployment scenarios right I mean it's like you know there was a study that came out recently that if you actually filled half the Sahara with solar panels would basically become a rainforest right that you know you can't really overinvestment millions and millions of cars per year we need to leverage that same manufacturing base and that same supply chain to understand how can we make fans cheaper how can we make compressors cheaper how can we make pipes cheaper how can we make zorbit cheaper how can we deploy geothermal cheaper to use the power or whatever the source of energy is and those things will have to ultimately come together to prove out basically this is the deployment scenario and then spend you know a decade or two honestly building out that capacity well and I will say just to put context on this so the state of California and the scoping plant assumed in 2045 the D cost per ton was I think $240 per ton and that was to get 65 million metric tons in 2045 so that's like that's the scale that California is thinking about that in but yeah we know that arb's projections are always correct so they do have a crystal ball that's yeah never wrong Chris crystal ball well maybe a little bit of both Optimist and pessimist in in two ways um you know I made the comment about removal right vers abatement and the reason we're doing carbon removal right now is because we already failed right if I understand the math correctly from the ipcc it's because even if we stopped everything right now there's still too much CO2 in the air so we have to remove it so forget about putting anything else in the in the air forget that just stopping right now we need to remove what in there to get down to the right levels the problem is we haven't stopped obviously and we still it's you know we've talked about all sorts of things here the questions around the grid and all sorts of other sources where we're using fossil fuel we still are as a society so what would change that right the policies and incentives you know we talked about societal cost of carbon right if there is an actual cost of carbon right California has cap and trade economy-wide the rest of the United States doesn't so there is no real cost of CO2 in our society it's it's a implied cost so that would accelerate the actual reduction of scope one emissions which is the one the 85% that you're talking about back to being an optimist I said it before and I compared this to win

2023-11-22 17:42

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