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HOUSTON -- There was a hint of cynicism circulating through air-conditioned rooms in Houston’s Marriott Marquis the week of Sept. 11. Speakers discussing the state of the chemical industry brought their own brand of sustainability. This crowd wouldn’t be mistaken for a gathering of crunchy festival goers, pushing their message of a fossil fuel-free utopia. They were somewhere else, perhaps still fleeing the muck-filled roads out of Burning Man.
Depending on your world view, many of the presenters broached the topic of sustainability with either a dose of reality or self-serving half-measures. Here, during the first two days of the inaugural World Chemical Forum in Houston, hosted by Dow Jones' Chemical Market Analytics, I sat shielded from the Texas heat. I listened to experts with knowledge spanning the entire chemical supply chain, including energy, mining and manufacturing, detail the challenges that lie ahead as the countdown to “net zero” gets closer.
Just a few weeks earlier, Houston tied the record for its hottest day ever, reaching 109 degrees. It was indeed a scorching summer in the “energy capital of the world.”
Climate scientists say heat waves like this will become more common as the planet warms. They contend that limiting Earth’s warming to 1.5 degrees Celsius, will take cooperation from industry to achieve net-zero emissions by 2050. But many of the speakers at the event say that goal, as called for in the Paris Agreement, is unrealistic.
“The energy transition is not about a fast transition away from fossil fuels,” remarked Nick Livingstone, managing partner with Rystad Energy.
He suggested that a more achievable target is to limit global warming to just under 2 degrees Celsius above pre-industrial levels by 2050.
When Livingstone demonstrated how each tenth of a degree decrease to the 1.5-degree threshold impacts energy availability, he noted “there is no way we can take that many hydrocarbons out of the system at this time.”
“Ultimately, we started too late,” he explained. He suggested a more gradual transition away from fossil fuels will eventually lead to more efficient industrial processes. But much of that evolution depends on the ability to secure the materials needed for an energy transition, such as cobalt, lithium and graphite.
Livingstone wasn’t alone in his assessment. Casey Selecman, director of powertrain forecasts at AutoForecast Solutions, said, “It’s going to be really hard to get hundreds and hundreds of thousands of lithium tons out of the ground. It’s already hard. You gotta get water there, you gotta get electricity, you gotta get roads there.”
Another session speaker, Philip Wagner, principal research analyst with McCloskey by OPIS, remarked that there isn’t enough copper to meet electrification goals based on his firm’s forecasts. (McCloskey is a coal, metals and mining research firm led by the Dow Jones group.) He also cited land availability for wind turbines, cost, and a lack of available labor to install transmission lines as additional hurdles impeding net-zero targets. Even if wind and solar energy sources become widely adopted, fossil fuels will still be necessary to address the intermittency challenges associated with these renewable technologies, Wagner said.
But not everyone was quite so skeptical. Coming from the electrification perspective was Thomas Kwan, director of sustainability research for Schneider Electric. He talked about the convergence of Industry 4.0 and electrification driving sustainability and energy efficiency.
Roughly 90% of the energy consumed by a chemical plant fuels its various processes, he explained. He contends that by electrifying core operations, including machine drives and heating systems, chemical plants could significantly increase energy efficiency and reduce lifecycle costs. By connecting those systems with smart technologies, such as artificial intelligence and automation, process plants can further optimize their energy use. This includes leveraging dynamic pricing systems offered by utilities.
“You can start to think about optimization techniques, not only for cost but for production and scheduling and for carbon in one complete system,” he explained.
During a panel discussion, Kwan disagreed with some of the other presenters who suggested that a transition to renewables and electrification is unattainable. He indicated that the fixation on deficiencies in our existing energy infrastructure is detracting from advancements in electrification.
“The point is, if we build tomorrow's grid the way we built yesterday's grid, that's really not using 21st century know-how and technologies,” he said.
Others talked about bridging the gap between renewables and fossil fuels with hydrogen, be it green, blue or otherwise, and nuclear energy.
Priya Ravindranath, senior manager of chemical marketing at Air Liquide, discussed her company’s efforts around hydrogen.
Hydrogen is part of Air Liquide’s plans to reach carbon neutrality before 2050, she said. She pointed out that hydrogen as a fuel can fill the gap where electrification may not be ideal, like heavy-duty trucks and aircraft. However, as Ravindranath told me in a follow-up email, basing sustainability assumptions on the hydrogen color spectrum alone can be misleading.
“The production pathway you chose to make hydrogen determines its carbon intensity,” she explains.
For instance, blue hydrogen involves the use of fossil fuels along with carbon capture technology. The term "blue" doesn't specify the extent of carbon capture in use. Ravindranath suggests that this is where our attention should shift because some technologies capture more carbon than others. Also, using electricity to produce hydrogen may not always be "green," she adds.
“Similarly, just having hydrogen production from an electrolyzer does not automatically result in ‘green’ hydrogen production,” she says. “If you are using grid electricity (which may have a heavy fossil-based carbon footprint depending on the location) in an electrolyzer, you could end up having a higher carbon intensity of electrolyzer-based hydrogen than ‘blue’ hydrogen.”
Confused? Yes, the path to carbon neutrality is a complex endeavor. Somewhere among this laundry list of solutions and strategies lies an answer to the sustainability puzzle. Achieving this goal may prove challenging if industrial leaders allow pessimism and hubris to prevail over innovation. This thought leads me back to something Kwan said. He asked attendees whether they recalled the phrase “standing on the shoulders of giants.”
This metaphor means expanding on the efforts or wisdom of predecessors by gazing toward the horizon and perceiving things beyond their vision. Consider that Houston is also known as the “Space City” where science, technology and the will of a nation converged and sent astronauts to the moon. Kwan hinted that industry has a similar opportunity within grasp.
“The call to action is for us now to become those giants so that 20, 30, 50 years from now as the next generations look back, we are those giants and the horizon is not the same,” he told the session attendees. “We need to change the system to achieve not only sustainability and decarbonization, but also growth.”
