Countertops From Carbon
To quote myself from a previous email, the biggest recent legislative achievements on climate change – the Inflation Reduction ACT and the Infrastructure Investment and Jobs ACT – are mostly incentives. What must come next will be harder. And so, we arrive in June with the only other material step forward on climate being the minor reforms for energy-project approvals contained in the debt ceiling agreement. But even with fewer days ahead of us in this year's legislative session than those behind us, I see an opportunity for more substantial permitting reform driven by appetites on both sides of the aisle that remain unmet by the recent deal. While there are a myriad of conversations and bills in both the House and the Senate, I suspect it will come down to two fundamentals: transmission for the left and judicial reform plus some pipelines for the right. This is obviously a massive oversimplification of an incredibly complex problem, but this is the nature of both democracy and bipartisan climate legislation. It's less likely to be a bill that is crafted in a deliberately bipartisan fashion from the outset than multiple bills that come together to form a deal that gets wrapped up at the end and allows both sides to declare victory. One achievement of a massive stimulus designed to incentivize both people and markets to change their behavior has been to focus our minds on the other challenges that we face such as our energy infrastructure, national security, and the geopolitics of climate change. Whatever permitting reform is achieved in this Congress, it probably won’t be enough. While I would love to believe that the next Congress will return to the issue, I would encourage you to support those that are working on it and push those that are not. The win, if it can be called that, is that so many legislators are now focused on it.
Positive Notes
A friend of mine recently asked a perfectly sensible question about captured carbon. Why can't we make something out of it, like a countertop? As luck would have it, I was about to attend the cocktail hour of the Carbon Business Council, a perfect audience for the question. The answer of course is so simple, oil is cheap, and the holy grail of $100 per ton somewhat relies on the utilization of captured carbon for soda, concrete, algae fuels, and alike. Sequestering captured carbon lacks the utility of course but the price point is similar. The really interesting answers from those working on the bleeding edge of carbon capture, direct air capture. It turns out that this is a conversation that nobody really wants to have because the current price is completely uneconomic. Accepting that this information was gathered by a lay person at a cocktail hour, my sense is that a ton of captured carbon from the air, in whatever form, costs between $600 and $1,500. While the eventual cost is going to be important, I suspect it would not matter if it was $5,000 per ton as there are companies willing to pay this to get a head start on the commitments they publicly made to reduce their carbon footprint. This is how nascent industries start and the entrepreneur or engineer that can both directly capture carbon, store it and get someone to pay $1,500 a ton for this service is exactly the person who is going to drive us through the energy transition. Government has done their part and those that follow in the footsteps of these trailblazers who are creating these amazing, complex, and innovative solutions will no doubt bring the cost down. This is a small example and the very crux of the challenge we face with the energy transition and why government and industry working toward similar purposes is the only solution. Neither one can bridge the gap alone and neither will be able to perform their role without the support, latitude, and longevity to do their jobs.
I do remain hopeful. The cocktail hour was full of young entrepreneurs and innovative business people who embodied a startup culture every bit as important as any Silicon Valley operation was 20 years ago.
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