“The Energy Transition is Here!” Part 1

The energy transition is here! We’re excited to kick off a special three-part series we’ll be doing over the next few weeks on the global energy transition. Our guest Umesh Baliga —chief technical engineer of Sustainable Technologies for KBR’s Integrated Solutions business in the Americas region — spoke with us about the energy transition value chain, the key opportunities and barriers, and a few of the solutions that will be helping pave the way to net zero.

Transcript

IN ORBIT: A KBR PODCAST

Season 4, Episode 5

“The Energy Transition is Here!” Part 1

INTRODUCTION

John Arnold

Hello, I'm John and this is In Orbit. Welcome to the podcast everyone. Whether you're finding us for the first time or coming back for more, we're awfully glad you're with us and staying in our orbit. One thing we try to do here on the podcast is to talk about things that are happening on this crazy planet of ours, how they affect us, and the solutions that can be used — or are already being used, as the case may be — to meet some of those challenges head on.

One of these challenges we've talked several times about is climate change and the global push to net zero via what is referred to as the energy transition. Now, before that term energy transition was cool, KBR already had decades of experience delivering renewable energy and decarbonization solutions like carbon capture, storage, sequestration and utilization, blue and green ammonia, hydrogen solutions, and the list goes on and on.

Now, as governments and industries take climate change and its effects more seriously, the need for these kinds of solutions is ramping up, but there's a lot of groundwork that needs to happen to make them viable alternatives. While I'm excited to say that we're going to be doing a few episodes here, a miniseries of sorts to shed some more light on what energy transition is, how it can happen, and what the opportunities and challenges are. With me today to talk specifically about the energy transition value chain, the key opportunities and barriers, and one potential solution is Umesh Baliga, chief technical engineer of Sustainable Technologies for KBR's Integrated Solutions business in the Americas region. Welcome to the podcast, Umesh.

Umesh Baliga

Thank you, John.

John Arnold

We're very, very happy to have you today. But before we get started talking about energy transition, I wonder if you might just tell us a little bit about yourself, your career, and your experience at KBR.

Umesh Baliga

Sure. I have a master's degree in chemical engineering from a reputable school in India, an engineering school. I joined MW Kellogg at the time in 1990 as a senior process engineer after more than 13 years at Uhde and Toyo Engineering in India as a process engineer. I have been ever since in the process group for more than 33 years. My first KBR project was the Shell Geismar UAG project FEED [front-end engineering design], and this was followed by multiple feed and EPC [engineering, procurement and construction] projects in all technologies such as ethylene ammonia, petrochemicals, refining, gas to liquids, LNG [liquefied natural gas] and utility of sites. I worked across all project phases ranging from conceptual studies and due diligence to technology and consulting on OEMs or original equipment manufacturers and technology evaluations on FEL 1, 2, 3 FEED, FEED verification, and EPC. All these years. Even earlier than joining KBR, I was responsible for startup and commissioning in several other technologies.

Now within the ISA [KBR Integrated Solutions Americas] group, I became the chief technology engineer for process execution in 2010, and I subsequently became the process CTE, chief technology engineer, for Sustainable Technologies three years ago in 2021. Since 2021, I have led process studies and projects on carbon capture, which is an area of energy transition, green hydrogen and green hydrogen to green ammonia, green hydrogen to E-methane and green hydrogen by electrolysis going to liquification. Currently, I'm still there on the Woodside Hydrogen Project, H2OK Project in Oklahoma, which started very early in a FEL-2 and continuing post FEED. I'm the technology manager on this project.

Incidentally, I presented technical papers at KBR in the last three years in the energy transition. These are for example, developments and opportunities on carbon capture, back in 2022, the American Carbon Capture Utilization Forum, and again in 2023, carbon capture application in blue hydrogen production at the Hydrogen Technology Expo North America in June last year. And this year I'll be presenting on May 7th, a third technical paper on the role of carbon capture and hydrogen in the energy transition at the Offshore Technology Conference, otherwise known as OTC.

John Arnold

Well, thank you so much for sharing. I am excited to have someone of your caliber and extensive expertise to talk about what I think is a very, very exciting topic and that is energy transition. And as I said in the open to the episode, we talk a lot on the podcast about the global challenges that KBR is helping address, and one of those, if not the biggest challenge right now is helping develop and deliver solutions for the energy transition. So for those listeners who may not be familiar with that term, would you mind speaking about what we mean when we say energy transition?

Umesh Baliga

Sure. Energy transition refers to the global energy sectors shift from fossil-based energy production and consumption, that includes oil, natural gas and coal to renewable energy sources like wind and solar, as well as use of lithium-ion batteries for renewable energy storage. While lithium-ion batteries are considered as the new gold standard for renewable energy, the biggest issue is that lithium production depends heavily on an energy intensive mining production process. That is ultimately harmful to the environment. Yet spurred by changes to the energy supply demand and prices, the energy transition aims to reduce energy related greenhouse gas emissions — are known as GHG — through various forms of decarbonization such as carbon dioxide or CO2 removal critical to reduce the greenhouse gases, such that we can limit the global warming to 1.5 degrees Celsius, as was recently pledged COP 28 or Conference of Parties held in Dubai December last year.

This is the third or the fourth one, and so to keep that temperature limit to 1.5 degrees Celsius, that's the intent of removing the carbon dioxide emitted by manmade manufacturing, which is the biggest issue for global warming. So energy transition is how do we reduce the CO2, and that's what the whole subject is about. So natural gas, which is currently being used is plentiful, cheap, and clean compared to coal and fuel oil. No doubt. However, when you burn natural gas, which is nothing but methane, it provides heat and a lot of carbon dioxide. This carbon dioxide when released to atmosphere contributes to the climate change. On the other hand, we are talking about hydrogen today as part of the energy transition. When it's burnt, it's carbon free. Obviously there's no carbon and it only releases moisture, so there is no other pollutants such as CO2.

So in summary, decarbonization or removal of CO2 is increasingly becoming the new agenda of governments and organizations worldwide. So there are key factors contributing to the scope of clean hydrogen, which can be blue hydrogen, which is nothing but fossil hydrogen, where you remove the CO2 and it becomes blue. The formula is the same, but it's called blue hydrogen to distinguish fossil hydrogen. When you remove the CO2, at some point in the process it becomes blue hydrogen. And the other option is green hydrogen. It's totally green, it's from green power such as solar and wind. So it has nothing to do with fossil at all. But these are the two types of hydrogen, which is currently in the energy transition. Blue hydrogen, which is from fossil power, you just remove the CO2 and green hydrogen is basically from water. There's no carbon dioxide at all.

Now, the US has passed the Inflation Reduction Act commonly known as the IRA a couple of years ago, which provides tax credits for carbon capture and clean hydrogen that will jumpstart or kickstart decarbonization in the US. So for blue hydrogen, carbon capture will play a vital role because blue hydrogen is nothing but fossil hydrogen when you remove the carbon dioxide. It's a cheaper alternative using existing infrastructure with a lower investment rather than making a full leap to a hundred percent renewable energy for green hydrogen. So currently gray hydrogen production is an intense carbon emission process, so blue hydrogen basically uses the gray hydrogen gets rid of the carbon dioxide. So this is a way we can leverage existing infrastructure, so that's what we mean by energy transition and decarbonization.

John Arnold

Thank you so much for breaking it down. I think it's so interesting and helpful for people to get a picture of what that term means because we talk about it a lot at KBR, but maybe people are not completely familiar with everything that goes into it. You've already mentioned some aspects of your career a moment ago, carbon capture hydrogen ammonia. But I wonder if you tell us a little bit more about your specific experience with energy transition, particularly KBR's integrated solutions business.

Umesh Baliga

Well, thank you, John. That's a great question. I've been working only in the integrated solutions first and in the last two and a half years, less than three years since I assumed this role of sustainable energy technologies, I worked on six energy transition projects. Out of which two are in the carbon capture and four are in green and clean hydrogen. For starters in 2021, I led a FEL-2 study projects working with a consulting group for carbon capture what's called post combustion carbon capture from the flue gases to remove carbon dioxide for a confidential client in Texas for a very large CO2 removal unit, and likewise for another confidential client in Iowa for a large carbon dioxide removal unit. So KBR's involvement was selection of the right licenses for this carbon dioxide capture and designing the rest of the plant and then capturing the carbon dioxide gas and pumping it to a pipeline for use downstream, which can be either pumped under the ground called sequestration or it can be used to make valuable chemicals downstream, which is called utilization.

Those are the first two projects I did in 2021, and since 2022, I'm the project technology manager on the Woodside H2OK Clean Hydrogen Project in Ardmore, Oklahoma. Basically, it's green hydrogen. It starts with water electrolysis, and then we make hydrogen gas, then we liquefy. It's called liquefaction, and we store the liquid hydrogen in a sphere just like what KBR did for NASA, which we use for the rockets. And then we did the rest of the plant. This started in early 2022, and we helped the client to select the technologies or the OEMs involved. We finished the pre-FEED and now we are in the post FEED waiting to go to the next phase, which is pending the client's decision. That was the first green hydrogen. It is called clean hydrogen because at the time the definition of green was not established. In fact, it's still being established right now. It's depending on what's renewable power and what is grid power. So that's the first project. Longest time, more than two years I've been working on. In 2022, 2023, we also did an electrolyzer evaluation study for a green hydrogen going to green ammonia. And this is the first example where ISA, we work closely with our technology brethren for a confidential client in Texas where they took care of the ammonia side for green ammonia and we, ISA, did the green hydrogen section including selection of a licenser. So this is the first project and it's an example of excellent collaboration between ISA and technology. That was in 2022, ended last year.

This year I'm leading a FEL study which includes a similar electrolyzer evaluation for a green hydrogen from based on renewable solar and wind power. The solar and wind power is not by KBR but downstream. So we are selecting the right technology and we are also supplementing this with carbon dioxide recovered from other sources from a pipeline and it feeds a downstream methanation facility, which is basically making synthetic methane, which is counterintuitive. We make LNG from synthetic methane, which is made in turn from hydrogen and carbon dioxide. So this produced e-methane from hydrogen and carbon dioxide, which is captured, carbon capture. It'll feed a renewable natural gas pipeline, which is sent to liquefaction. Guess what? That is LNG.

So we're making LNG starting with hydrogen and recovered CO2. So that's the new trend. And this is for a major LNG producer that we are doing the study right now. And if it goes well, they will make the synthetic methane or e-methane and make LNG, where basically you're using existing infrastructure, because hydrogen liquid form is very expensive to store. So they are making this green hydrogen and so-called blue CO2 recovered from carbon capture, making methane and then liquefying it to make LNG, which is a known, established technology, and we export. We export it to Europe and Japan, which they provide more credits for making LNG through green hydrogen.

And then most recent, couple of months ago, I started working with our Wilmington team, with our Houston consulting and in London, we have a subsidiary called Frazer-Nash. It's a KBR company. So working with them on an electrolyzer evaluation for a confidential client in Delaware. It's again green hydrogen, but the renewable power is also designed by KBR from wind and solar. Frazer-Nash are SMEs in this business, and working closely with Frazer-Nash, how to establish based on the wind and the sun, depending on the time of the day and the month, how much can we garner from wind and solar, how much megawatts we can generate and how much hydrogen we can produce. This is again an excellent example of collaboration between ISA and Frazer-Nash [Consultancy, a subsidiary of KBR] and Houston Consulting and Wilmington. So this is the current project. So that rounds up the six projects I'm working on, John.

John Arnold

It's exciting to hear about the variety of energy transition projects from carbon capture to blue and green hydrogen, and this e-methane, it sounds fascinating, but it's also very exciting to hear about the cross-company collaboration across KBR to work on all of these different projects.

Umesh Baliga

Absolutely. It has been a really exciting time for us in ISA.

John Arnold

In a previous conversation you and I had, you mentioned some of the major opportunities, particularly for KBR, in the energy transition value chain. Would you tell us about those?

Umesh Baliga

There are several major opportunities for KBR in the energy transition and I'm listing a few. There's a new development, relatively new, in the last three or four years. It's called direct air capture, or DAC, where you suck in air directly from atmosphere and capture the carbon dioxide. It's a very new technology and there are only a couple of companies who have established this, but that's an exciting field. We started getting some inquiries for DAC, or direct air capture. So it doesn't go through a process. You're sucking... You're removing the carbon dioxide directly from the atmosphere. So that's the first one, which is an exciting new technology.

The second one is, we already talked about it, blue hydrogen. Basically, you make gray hydrogen from natural gas and then you remove the CO2 and then it becomes blue hydrogen. So we're already doing a couple of projects. We're bidding on a few other projects. Hopefully, we'll get a few projects with the blue hydrogen. Our technology brethren are already doing blue hydrogen, but I'm talking of ISA. So we're working with other customers and trying to win some project in the blue hydrogen space. And the green hydrogen we already talked about. We've done enough of these studies. Using water, you electrolyze water to make hydrogen and oxygen using renewable power, in this case working with Frazer-Nash. It depends on how much solar and wind is available. We use that to electrolyze water because water electrolysis requires a huge amount of power and we're agnostic to technology in this case. We can work with anybody's electrolyzer technology, unlike our technology brethren. So we are agnostic and we claim that we can use the best technology for the best location. So that's an exciting area. We already got a few studies going on there.

The other one, the fourth one, is hydrogen liquefaction. That's what we are doing on Woodside. The challenge is liquefaction is expensive and storing hydrogen is also expensive, but we already done the FEED on Woodside and we believe that there will be more such projects. Most of the hydrogen is shipped by truck to the California mobility market and that's an exciting new area that we already done the FEED on. The other one we talked about is the green ammonia from green hydrogen. So you basically make hydrogen from electrolysis and then you make nitrogen from air separation using renewable power. So it's kind of a green nitrogen. Basically, you split air into nitrogen and oxygen and that nitrogen and hydrogen from electrolysis just combine chemically and it becomes ammonia called green ammonia, renewable power. And our technology guys are working on this, but so are we. The difference is we work with anybody's technology. We're agnostic to technology. So that's an exciting field.

There's another option which is more recently come up, like when you make green ammonia and you ship it. The advantage of making green ammonia is we already have this infrastructure to ship ammonia through ships. So when it goes down to the user side, we'll have to crack it to produce hydrogen again, because ammonia cannot be used directly as a fuel. At least it's being used right now in Japan on a pilot basis, but ammonia has to be cracked back, and KBR is offering our own technology, but we are working with third-party licensers. You crack the ammonia back to green hydrogen at the user site, another country, for example.

Another new area is thermal decomposition of methane, which basically you take methane and you decompose it to get hydrogen and carbon black, which is used in tires for example. So another way to make hydrogen is to crack the methane, which is treated at very high temperatures and you break methane into its constituents, which is carbon and hydrogen. So that hydrogen is not called green or blue. It's called turquoise. So it's another way to tell you where the source of hydrogen is. Turquoise hydrogen comes from decomposition of methane. So that's an interesting process.

Another one is we talked about making synthetic methane or e-methane by combining green hydrogen and recovered carbon dioxide, which is further liquefied to LNG in an LNG facility. We're doing one, and we're likely to get another big job for a client in Europe. Another one where we have started getting involved which haven't been successful yet is making methanol. Instead of e-methane, you make e-methanol. You basically make hydrogen and instead of converting it to methane with a licenser, we convert it to methanol, which is increasingly becoming a new fuel for ships because it's less polluting compared to bunker sea fuel, which is used on the large cargo ships like Maersk and others. So it has a lower carbon intensity. That's the term used, CI. So e-methane or e-methanol both have lower carbon intensities compared to other fuels. So some of the large ships are planning to convert from bunker sea fuel to methanol, burning methanol on ships. So that's an interesting area which we should be working on.

And more recently we're working on sustainable aviation fuel, which is called SAF. You would've heard about SAF. Basically, you supplement a regular aviation fuel, which is mostly kerosene. You take. .. SAF is basically you're using waste, vegetable oils, meat tallow, fatty acids, everything that is waste. We hydrogenate the vegetable oils and animal fats and then with a lot of hydrogen and you make a sustainable kerosene and sustainable aviation grade kerosene. That's called an SAF, which is very interesting because that will be used in the aircraft.

It's not going to be ... We don't have that many vegetable oils to make aircraft fuel, but this is going to be blended into petroleum, refinery-based aviation kerosene, and up to 10% blend. And that's starting in a small way, but if we have enough vegetable oils and animal fats, I guess most of the aircraft can be running on this. But it is happening today. It's more than a couple of years. And we're making inroads in this and our Wilmington office is ahead of us and we're working together on a project. Hopefully, we'll land that up very soon in the Houston office. That's for SAF, which is sustainable aviation fuel.

We also talked about turquoise hydrogen from thermal decomposition. There's no need to talk about that. And our Wilmington office is specialized in biomass hydro-treating to make biofuels. Basically biomass, anything biologically produced mass, such as could be waste from trees or it could be any other waste, you treat it with hydrogen and make fuels. And these are considered to be low carbon intensity because this is natural. You're not producing it... It's not man-made fuel. So that's considered a biofuel. And also we capture CO2 from bioenergy. Basically we remove the CO2 and that's called bioenergy with carbon capture and storage BECCS. So it captures the CO2 and generates electricity from that. So that energy can be used to make power and it's got lower CO2. Then there are a few other technologies such as chemical looping and recycling plastics. KBR technology is working with a new technology called Mura, which gets rid of all the plastics which are dumped in the oceans today can be recycled to produce high value sustainable fuels. So that's an area which we are not busy here, but technology is selling a lot of that. And the latest one more recently we did one, we haven't won a project yet, recycling old tires to produce rubber chips that can be used to add it to asphalt for increased road and highway life. This is very common in Europe and the US is picking onto this. This is an exciting field for recycling, rubber recycling. So these are the 15 or 16 areas which are really good for us in the energy transition.

John Arnold

Well, it really speaks to the breadth of KBR's expertise because that's a lot of potential paths forward to meet needs across the energy and industrial spectrum, and you're meeting a lot of different needs that's really, really commendable and very, very exciting. I wonder even more than electric solutions, we were just talking about lithium ion batteries. Blue and green hydrogen sound, at least to me like "better" cleaner solutions because of the fact that the manufacturer of lithium ion batteries and then the excavating rare earth minerals, that's all of that is very, very carbon intensive and it also causes geopolitical issues. What are some of the barriers for implementation then for something that seems like more of a sure thing and a cleaner, like I said, "better" solution like blue and green hydrogen?

Umesh Baliga

Let me try and explain. Blue and green hydrogen are really nice exciting in impact solutions for decarbonization, especially blue in the short term. But as you rightly surmised, there are several barriers for implementation and more barriers for green hydrogen. Let me list them out. The first one is as a background, climate goals are highly dependent on clean hydrogen to get rid of the approximately 100 million metric tons of carbon dioxide emissions every year that cause global warming. We're talking about 100 million tons of CO2 worldwide. So if you want to reduce the warming and limit it to one and a half degrees Celsius, we have to get rid of all that CO2. So that's the first thing. So there's a lot of potential, and this is not really a barrier, but it's a lot of investment required to get rid of it. That's the first one. In the US, unique to the US, natural gas is very, very inexpensive compared to Japan or Europe.

So green hydrogen in the US, because natural gas-based hydrogen is cheap. Green hydrogen is about three times more expensive than natural gas from hydrogen from natural gas or gray hydrogen. Because it's cheaper, so much cheap compared to Europe. If you factor in the environmental damage, in spite of that, hydrogen costs three times as much hydrogen from electrolysis. This makes clean hydrogen. In the other way, in the reverse way, this makes hydrogen from electrolysis much more expensive the US compared to say Europe or Japan, where the natural gas costs are very high because they imported from Russia, for example, in Europe. So in Europe it is easier to switch, but here in the US the cost difference is over three times for green hydrogen compared to fossil-based hydrogen from natural gas. So that's why the IRA gives the incentive approximately $3 a kilogram of hydrogen production incentive. If you meet the requirements of renewable power, then the cost of green hydrogen in the US equals that of hydrogen from fossil fuels such as natural gas.

While it's a barrier, it's currently a barrier so you need to reduce the cost of hydrogen, which means reduce the cost of electrolysis and reduce the cost of renewable power, which is really a barrier at this point. The technology is not yet advanced at that point. So that's one of the barriers. The technology for electrolyzers and also the cost of power which is an important utility for making hydrogen, these are the two things. But the advantage of clean hydrogen is it has no direct emissions. But there is no emissions from electrolysis but upstream we are selling in electric power, indirect power, and that electrolysis consume a lot, lot more power compared to any other process.

So when you measure the carbon footprint of electrolyzers, it's really measured from the power that supplies the electrolyzers. And to make power from electrolyzers, we are depending on fossil fuels. Typically, if you use the utility grid, every kilowatt of electrolyzer power comes from the utility grid, produces a lot of CO₂. So when we measure CO₂ emissions for green hydrogen, there are emissions, not because of electrolysis, but the utility power that supplies electrolysis produces a lot of carbon dioxide. So they always characterize as how many kilograms of carbon dioxide per kilogram of hydrogen produced. That's a criteria which is used by the department of energy.

So for fossil fuels, it's very high and that's why they say we have to go 100% renewable. When you got renewable power, you're not burning natural gas to produce power. Renewable power is coming from sun and wind, so there's very little carbon footprint. So this makes carbon footprint of the CO2 emissions per kilogram of hydrogen very, very low. So that's why the US IRA section 45(b) specific for hydrogen, it gives a substantial sub tax credit if you have lower emissions to make green hydrogen. To make it competitive with hydrogen from natural gas or fossil fuel sources. So that brings us to the next question. How do you determine the emissions, the CO2 emissions from a power line? It's very, very complex.

John Arnold

Sure.

Umesh Baliga

And you buy it from the utility grid. It depends on how much percentage of the utility grid is green or renewable. So the DOE [U.S. Department of Energy] now recommends acquisition of so-called energy attribute certificates or EACs to measure the emissions and they can track the attributes like when it was generated, the generation time to source of fuel. So the new requirements of the IRA, which is a barrier right now, is the renewable power should be incremental, which means that three criteria according to the IRA requirements for 45(b).

Incremental generation means it has to be generated from a new facility, not be pulled off from an existing facility. So it has to be specifically for this new plant that's called incremental. The second condition is called geographic matching, which means the generation should be in the same area regionally as to the producer of hydrogen. It cannot be from another state, for example, because there's carbon footprint for the power line. So it has to be incremental for this project, it should be in the same geographic area. And the third one is much more difficult to achieve. The generation of power, renewable power should occur the same time as the producers are using it. Which means let's say 2026, somebody wants to put up a hydrogen plant. The power should start to be produced at the same time. So these are three requirements which is being debated in the treasury at this point and because they're not resolved it, there's a lot of debates between the environmentalists and the oil and gas movement.

So this will be resolved only in the third quarter of this year. Until then, all hydrogen projects are not decided which way to go because those definitions of incremental geographic and temporal matching are not yet finalized at the treasury level. So unfortunately, some of the projects, including some of our biggest customers, they're either on hold or they're figuring out what to do because without the energy credits green hydrogen is going to be a challenge, especially in the US it's going to be three times more expensive. So these are the key requirements. So you could call them barriers, but these are the main issues which has made it a little more complicated. It's going to be end of this year, we will know something with the IRA requirements from the DOE, and of course everything changes in November, so we don't know where it's going. So those are the areas.

John Arnold

Right. A lot up in the air. Thank you for walking us through that. It is very, very complex, but that does make it a little clearer as to what we're dealing with. Just a couple more questions for you, Umesh, before I let you go. I wonder if you tell us about some of the opportunities on the horizon.

Umesh Baliga

Yeah, I think the most recent one is besides direct air capture, which you briefly talked about, we haven't secured anything in this space. We talked about blue and green ammonia and blue and green hydrogen. The latest one besides e-methane and e-methanol is SAF, sustainable aviation fuels starting from meat tallow distillers, corn oil, cooking oil, used cooking oil, et cetera. They're close to be getting an award for a SAF project in the Houston office working closely with Wilmington who have the technology for the front end of the SAF. So that's an exciting project. Also, we are bidding for another large SAF project. Everybody wants to get into the SAF because they want to get credits and by supplementing a refinery aviation fuel with SAF kind of adds to the mix. Like we have ethanol going into our gasoline for cars, SAF will be blended with the finer grade aviation fuel.

So there are other upcoming opportunities which I briefly mentioned, like cracking the ammonia on the export end. You make the green ammonia and the user end after the ship reaches the port, the other side that has to be cracked to get our green hydrogen back because ammonia is just a carrier. It carries hydrogen in the form of ammonium because ammonia ships are very common. So that's another field. We just had a discussion with a potential client this morning where KBR Technology has a unique technology for this, but the clients have different technologies and that's where ISA, we have an advantage because we are agnostic to technologies. We told this client we have a firewall with technology so we can handle this one. So ammonia cracking to produce hydrogen is another exciting technology we're getting into. And thermal decomposition of methane to make carbon black, to make turquoise hydrogen, is another one. So these are the interesting opportunities on the horizon.

John Arnold:

Outstanding. Well, any parting thoughts before I let you go?

Umesh Baliga

I think low carbon hydrogen as we call, it's really growing the substantial momentum in this. But as we all know, green hydrogen based on renewables is a little more in the longer term, but right now there's a need for bridging technology and that's blue hydrogen. So that's where we are spending a lot of our time on. We are doing a lot of bits in the blue hydrogen space, but that doesn't mean we are still working with our clients for green hydrogen. But I think the key area which we are all waiting is how does the treasury determine what are the requirements for green, which is the three pillar criteria?? To get the fortify, we credit all our customers are trying to figure out how they can get that. And currently, it's a little bit on the hold because the treasury has not decided for the next six, eight months.

So barring that, we are still hoping to be winning more projects in the blue hydrogen space before we move on to the green hydrogen. And we are right now doing, as we said earlier, FEED studies for green hydrogen. So hopefully by the third quarter of fourth quarter, we'll have some decision on a definition of green and that's when there'll be a spot for more green hydrogen projects. So hopefully, that should come soon. But this is a very exciting future for us in KBR ISA. And the most encouraging news is we are already doing FPL one and FPL two studies, which will hopefully get onto the FEED in the next phase. And by then we should have some kind of resolution from the treasury on what's the fortify tax credit and what are the criteria so we can satisfy that. Our customers should be able to satisfy that. So I think this is great news in the sustainable technology space. John, I don't know if I answered all the questions, but this is where I think we are.

John Arnold

Yeah, definitely. No, I appreciate your time. Thank you so much, Umesh, for being with us, and I can't wait to hear more in the future about the exciting ways KBR is helping deliver the energy transition.

Umesh Baliga

Thank you, John. That's excellent. Look forward to it and let me know if there's anything else we need to do. I know there are a series of other ones coming up soon.

John Arnold

Yeah, that's right. To our listeners, we're going to have a couple other experts on to talk about KBR's participation and role in the global energy transition. So look out for those episodes in the near future. But again, thank you, Umesh.

Umesh Baliga

Thank you, John. Pleasure talking to you as always.

CONCLUSION

John Arnold

There you have it. The energy transition is coming! I don't know about you, dear listeners, but I for one, am here for it.

We want to thank Umesh Baliga for his time and expertise. This was a pretty comprehensive dive into energy transition and I feel like I understand it all and some of the challenges and opportunities related to it a lot better than I did before. I want to thank my colleague, Bex Lewis, for helping connect the dots to make this energy transition series possible. Of course, I want to thank our amazing producer, Emma, for her work on each and every episode. And as always, thanks to all you listeners. If you like what you heard today or if you have an idea for an episode or if you just want to drop us a line, let us hear from you by emailing us at inorbit@kbr.com.

And don't forget, there's three full seasons worth of content in our back catalog, so feel free to go back, check out some of our previous episodes, several on the topic of energy transition and many, many others and hope you enjoy that. And look, we know there's a lot going on in the world. There's a lot of stuff vying for your attention. It makes the fact that you spent some of your time with us today even more special. So please know that we appreciate that. We appreciate you checking in with us and keeping us in your orbit. Take care.