“The Energy Transition is Here!” Part 2

In the second instalment of our miniseries on the energy transition, we’re joined by Shane Tierling, chief technical advisor for KBR's Integrated Solutions business unit in the Americas region. Listen as Shane takes us through an in-depth discussion of the exciting (and critical) role hydrogen has to play in the development of energy transition solutions, and KBR’s unique position to effectively deliver those solutions.

Transcript

IN ORBIT: A KBR PODCAST

Season 4, Episode 5

“The Energy Transition is Here!” Part 2

INTRODUCTION

John Arnold

Hello, I'm John, and this is In Orbit. Salutations dear listeners, and welcome to the podcast. Whether you're a long-time listener or a first-time orbiter, we're just glad you're with us and staying in our orbit. I'm excited to welcome you for the second part of our three-part mini-series on the global energy transition. We were honored to have Umesh Baliga, chief technical engineer of Sustainable Technologies for KBR's Integrated Solutions Americas business unit with us for part one. We talked 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.

In the second episode of the series, we're going to be talking more in-depth about opportunities to accelerate energy transition solutions, specifically through the production and deployment of blue and green hydrogen. And if you don't know what blue and green hydrogen are, we got you covered there too. And with me here to break it all down is Shane Tierling. Shane is chief technical advisor for KBR's Integrated Solutions business unit in the Americas region and fresh off speaking engagement at the OTC [Offshore Technology Conference] Conference so welcome to the podcast, Shane.

Shane Tierling

Thank you. Thanks, John. Yeah, I'm glad to be here and glad to talk about hydrogen, one of my favorite topics and energy transition, in more general terms.

John Arnold

Absolutely. I don't know if our listeners, if they're KBR employees or are analysts that may be listening to the podcast. As we speak right now, they're going through their investor day and I know that blue and green ammonia and hydrogen were big topics of conversation in that investor day presentation so this is a very timely and excited to have you on as our second guess in this energy transition series, but before we get into all that, we'd love to get to know you a little bit so why don't you tell us a little bit about yourself and your career and your experience at KBR?

Shane Tierling

Sure, sure, sure. I'd let you know, okay? First off, I guess I wasn't born in the United States. I was born up in Canada. We moved down to Houston, part of, my father moved his, he had a small company, oil field services company, moved down when I was like 17 years old. Attended the University of Texas at Austin, graduated, undergraduate degree in chemical engineering. And then I guess my wife and I have been married for about 40 years. We're a little further along than some folks in their lives, so both of our kids are grown up. They're independent homeowners. My wife and I often dogs sit for them, when they run out of town.

So that's a little bit of what's going on with me. I've enjoyed cycling an awful lot, turning a little bit towards running. My son runs, he runs half-marathons at actually a pretty nice sub-8-minute pace so, hey, one day I'll be there, maybe not, who knows? Process engineer in the ISA [KBR Integrated Solutions Americas] portion. Thirty-plus years here at KBR and predecessor organizations, of course. And I came from a legacy systems engineering and process design background. So I'm a process engineer, that's kind of my focus and that's where we're going to be trying to lead this conversation off. Let's see, I also have six years of plant operation experience from pretty early in my career and even involved in commissioning when we were, here at KBR, we were supporting a licensure, we had a very close agreement, a relationship with, supporting them, kicking off one of their new technologies as well.

John Arnold

Excellent, I love to hear about the personal side of people's lives. I myself am also a rudder, not a sub-8-minute guy myself. I like to take my time just to exert myself, but I love to hear about the breadth of your expertise 30 plus years with KBR and legacy organizations, that's fantastic. So your work at KBR specifically, it currently centers around circular economy and energy transition. So we heard from your colleague, Umesh Baliga, who spoke in the first part of this series about what energy transition is. I'm wondering if you could tell us a little more about circular economy and your work in that area.

Shane Tierling

Yeah, yeah, I tried to get a nice definition of circular economy, so I looked it up just like any good engineer would do and said basically, circular economy is an economic system designed for minimum waste to minimize the waste and maximize the use of resources by keeping products, components and materials in use for as long as possible. And unlike traditional linear economy, which follows a take, make, and dispose model, circular economy aims to close the loop of resources used through strategies such as recycling, reuse, and remanufacturing. Its approach reduces the extraction of raw materials and generation of waste. Okay, sounds good. Let's do it, let's do it, okay. So basically at the heart of the circular economy is trying to decouple economic growth from resource consumption so we can continue to have economic growth but control or maybe even decrease our resource consumption and allows us to meet the needs of a growing population.

Also a growing population around the world which wants to experience an enhancement in their life. They want to have some of the resources we have here in United States and Europe, Japan. And so we're going to try to bring those folks up without putting an undue pressure on the resources available from the earth. In other words, just basically doing it smart. This is core engineering. How do you do things smart and intelligently? So that's what we're all about. So, been working in the circular economy, in particular, I've been supporting the Mura's Hydro-PRT technology, which is where we take mixed plastics, these are post-consumer plastics, and we turn those into high quality chemical feedstocks including feed to ethylene cracker technologies. So we can actually close the loop and actually recreate some of these polymers as well as producing high quality chemical feedstocks as well. So my specific contribution to that technology was a recovery of higher and the lighter products from the reaction product stream. So that was my contribution to that Mura technology, which is we, KBR, we have actually financial interest in that, so I mean, great, right?

John Arnold

Absolutely. Yeah, Hydro-PRT is easily one of the more interesting — I mean, KBR does tons of stuff, if anyone listens to the podcast, we've talked about Hydro-PRT, but especially from the standpoint of the environment, of the giant plastic floating island in the ocean, a solution like Hydro-PRT that can take that post-consumer plastic and turn it back into something useful is very encouraging. And as you say, for younger generations, also very encouraging. So how are you involved in delivering KBR's energy transition solutions?

Shane Tierling

Yeah, my work at energy transition is multifaceted, working on a number of different things because we're a small group and we're involved in a rapidly growing technology area, we wear multiple hats, I've been supporting a green ammonia study where we're using green hydrogen, I.E. hydrogen from electrolysis, as a feedstock to our ammonia technology. Also looking at hydrogen for actual direct consumption. So electrolysis hydrogen liquefaction, and that's going to be transported to delivery points to support long haul transportation, long haul trucking in particular where batteries are maybe not a great fit, where hydrogen is going to play a good role there. And also recent projects, I've been looking at impurities treatment where we're looking at a technology where we're taking green hydrogen once again from electrolysis, combining that with recovered CO2 and actually producing synthetic methane. And then that can be liquefied and sent around the world so, we're working on a lot of very interesting and great ideas brought to us largely by our clients that say, hey, what can you guys do to help us with this? We try to figure it out.

John Arnold

Outstanding! Problem solving! I love it. So before we really get into our discussion about blue and green hydrogen, I wonder if you would give us another definition. Let's talk about what we mean when someone refers to the term energy carrier?

Shane Tierling

Yeah, an energy carrier is basically something that we can use to carry energy from one location to another. The most traditional energy carrier, not the oldest of course, but most traditional energy carriers is going to be electrical wires. So we can carry electricity from one location to another. Things like wood would've been one of the earliest energy carriers, carry, somebody goes into the forest, chops down a tree or harvesting a dead tree, takes it back and keep the household warm. In the modern day, we're planning on using as energy carriers interested in using hydrogen itself. So hydrogen can be electrolyzed, Ammonia can also be a electrolyzer. There's some work being done on fuel cells with ammonia as well as of course there's fuel cells with hydrogen already. Those are means of energy carriers, and then of course, hydrogen is often used directly in some chemical processes.

It's used as a reducing agent in some of the hard to decarbonize type of industries such as metals production and cement production. It's used as a reducing agent, so we're using its chemical capability versus more generic type of energy. So a little bit more focus there. And of course some of the current injury carriers are things like petroleum, we've got diesel, we've got gasoline, all the various petroleum fractions. We've got natural gas, LNG [liquefied natural gas], and in the interest of decarbonization, we're trying to work our way, a little bit away from these fossil fuels towards something that's a little bit more sustainable.

John Arnold

Thanks for that explanation. I know that when I've spoken with engineers like yourself and the term energy carrier gets mentioned, I thought that it would be worthwhile for our listening audience to get a brief description about what we mean when we talk about that, talk about transferring those molecules. So especially coming off your conference appearance at OTC, you probably have a little more insight into this next question, and I wonder if you would talk about what the main global trends are that we're seeing in blue and green hydrogen becoming a more viable energy transition saloon. Where is ground being gained globally right now with regard to blue and green hydrogen and ammonia as well, I guess?

Shane Tierling

Sure, sure, absolutely has ammonia. We obviously have a lot of, at KBR, we have a tremendous legacy in ammonia as well too. So let's not forget our ammonia side, but hydrogen is being explored for a lot of different reasons. One is, as an energy carrier, it has very high energy per unit mass. And this was of course was an advantage of hydrogen that was exploited by NASA in the early space program in the 1960s, because weight is extremely problematic in space travel, they settled on using liquid oxygen, liquid hydrogen to get ourselves into orbit and get ourselves to the moon. So that's one of the key advantages of hydrogen. So getting in a little bit further on as far as global trends, there's a lot of movement right now in the blue hydrogen space because currently hydrogen is green, hydrogen is disadvantaged by cost, especially here in the United States, hydrogen is competing against very, very cheap frack gas.

As a matter of fact, the gas is so inexpensive that literally we've become the world's largest LNG exporter. And so we've gone from an expensive natural gas region to an extremely inexpensive natural gas region, and hence we're starting to export. Now, there are other areas around the world such as Europe and Japan where natural gas prices are much higher because their marginal source of natural gas is LNG.

But there's been a lot of interest in blue hydrogen, which is using traditional methods of hydrogen production such as steam methane reforming and autothermal reforming to produce hydrogen, also co-produces CO2. So then the idea is to capture that CO2, sequester it and therefore we have a low carbon source of hydrogen.

As time goes on, we're anticipating, and right now, of course, wind is extremely a inexpensive form of energy, of electricity when the wind's blowing, but extremely inexpensive. And so there's going to be a pickup in green hydrogen as we start to use a lot of these sequestration resources for other reasons. There's other sources of CO2 other than just producing hydrogen. And so global trends we're seeing are towards, starting off, blue hydrogen, which hopefully will build out the infrastructure for hydrogen in general, then we can make a transition to green hydrogen later on as the natural resources play out and we have to look at alternate non-fossil fuel sources of energy for the future.

John Arnold

With your expertise in the field and what you know about government regulation, because in our conversation, if listeners heard in our first episode in this series talking to Umesh Baliga about these very topics as well, talking about regulations and things sort of gumming up the works, I wonder is there, in your expert opinion, a timeline for these solutions to reach mainstream viability?

Shane Tierling

There is a lot of push, yeah, unfortunately, there is a timeline. There is a big push towards severe control of carbon emissions by 2050, and there's some intermediate goals around 2035. These are some dates that every time governmental agencies in conferences, technical people we're talking about these 2050, 2035. There's a lot of companies have made commitments to being carbon free by 2050. And being half of their current carbon emissions by 2035. Those are huge commitments and we're going to have to be all hands on deck to help them meet those commitments. Now, national governments, especially in Europe, have been putting a lot of money behind getting the transition pushed along. So in Europe there's incentives, and there's also with the carrot, they're also using the stick, there's carbon taxes too to try to push things along. I think over here in the United States, we've been trying to use more of the carrot approach than the stick approach.

John Arnold

Gotcha. What are the opportunities for KBR specifically in blue and green hydrogen as an energy carrier?

Shane Tierling

Yeah, there's obvious synergies between green hydrogen and our ammonia technologies to make green ammonia, which can be used as an energy carrier. It's also predominantly used currently as a fertilizer. Of the 8 billion people on the planet, I've heard anywhere between 4 to 6 billion of us owe the fact that we have food available to the fact that we have chemical fertilizers available. Ammonia is being the precursor to also things like urea also in our portfolio. And those of us who are a little bit older, we remember the Green Revolution, and that allowed a lot of food growth for everyone. So there's obviously, there's an opportunity there. And then ammonia can also be transported even maybe a little bit more readily in some cases than liquid hydrogen can be over very long distances and we can also, we can convert that into electricity. So there is opportunities there. I like hydrogen as hydrogen itself.

We have the ammonia option, but I also like hydrogen as hydrogen itself. And so one of the key advantages that we have is because we've gotten involved in this hydrogen very early on, there's a lot of our clients are coming to us strictly because we have this experience. And of course experience is kind of a snowball effect. One client comes to us because we have hydrogen experience and then we have a little bit more, and then it makes it even more and more attractive to various and sundry clients there. So we have the first mover advantage in a electrolysis hydrogen with our involvement in the Woodside Hydrogen Project, for example. This is really what kicked everything off, and we found that in working with the electrolysis equipment suppliers and the liquefaction equipment suppliers, that they haven't actually worked together. So the Woodside project was taking electrolysis hydrogen and delivering it as the final end product, this being liquid hydrogen.

So we had the electrolysis side and we had liquefaction side, but we, KBR, we developed the expertise in pulling these two together. And so that expertise is being recognized in the market. There's a lot of buzz around the name of KBR, and because of its, first of a kind and we've gained these valuable experiences makes us more attractive to gain additional work, because of our experience, not only on that project, but three other projects. We've got a lot of understanding of what's available out in the electrolyzer markets. And so there are basically two main technologies out there. One's the alkaline water electrolysis, usually called AWE. The other one's proton exchange membrane, also called PEM or PEM technology.

And understanding where those two particular technologies fit, their strengths and weaknesses, so that we can quickly go into, when a client has a concern, we can go in there and select just the general technology that's going to work the best but also because we've worked a lot with these technology providers, we're starting to understand the strengths and weaknesses of an individual OEM, the individual manufacturers out there. And so we can help guide our clients to a successful conclusion. So this electrolysis hydrogen has been applied, as I mentioned, to also synthetic natural gas, also been applied to green ammonia. So we have a client who has asked us to study green ammonia where we're using this electrolysis ammonia to supplement in existing KBR-designed ammonia plant, and so they can co-produce their traditional ammonia plus also some green ammonia, and that allows them to use the very same facility to produce two products.

John Arnold

Outstanding. It sounds, yeah, providing that kind of flexibility, but then also having the expertise across the whole spectrum of what blue and green hydrogen can be used for. Sounds very exciting. Lots of opportunity on the horizon it sounds like. Thanks for walking us through that Shane. A couple more questions for you. What are the challenges industries are facing with blue and green hydrogen production and maybe more importantly, transporting it?

Shane Tierling

Sure, sure, with regard to production, I guess the capital cost of the electrolyzer stacks is one of the key areas that's being challenged. And so we've got a capital cost and also the availability of producing these machines. So fortunately we're seeing that, I know at least two vendors are looking heavily at automation of the production, and that's going to give them two-fold benefits, well, actually three-fold, general cost reduction, but they're going to be capacity improvement, they're going to be able to produce more of these guys when there's a huge demand, and also they're going to reduce their losses. So right now, there's a lot of hand labor involved in producing a lot of these cells. There's a lot of interaction. So as you can imagine, a certain amount of variability, that means there's a certain amount of these, number of these cells that they can't actually use, and so there's a waste aspect.

So as they automate, they're able to refine the, refine the process for high consistency, and therefore they don't have those losses of equipment. And then there's going to be some interesting things around scale-up in infrastructure. So we also have to build a blue hydrogen infrastructure. Now, fortunately, we're very fortunate in the Houston Hub Area that we have an awful lot, a huge amount of existing hydrogen pipelines, but that'll have to be increased. There's going to be some on the transmission side, there's going to be some conversion of existing natural gas pipelines to hydrogen. And then of course, as there's, if hydrogen takes off as far as transferring energy from one part of the world to another.

Like for instance, Australia has already explored and they have already had a liquid hydrogen carrier. They've done a test run between Australia itself and Kobe, Japan. And that test run was successful. It's a very small ship and probably not full-scale commercial, but at some point in time we're going to be, I believe, we'll be exporting liquid hydrogen around the world along with liquid ammonia. And something I haven't really talked about is organic hydrogen carriers may also play a role, but I believe that liquid hydrogen and liquid ammonia are going to play a larger role in moving energy from one part of the world to the other part of the world.

John Arnold

Outstanding. What, in your opinion, will be the major developments in energy transition solutions, specifically around blue and green hydrogen in the near term?

Shane Tierling

In the near term, major developments I'm seeing, as I mentioned, the automation's going to help drive down the capex and make the green, i.e., the electrolysis part, more cost competitive with traditional energy sources. And that's going to be one of the keys. And then there's work being done on long-term storage of hydrogen, both blue and green. There is some work being done looking at salt dome storage for relatively inexpensive but large-scale hydrogen storage to take care of some of the lumps and bumps in the supply chain. In particular, a lot of that activity is happening in the Gulf Coast area supporting the Houston hydrogen hub, because we have a lot of salt domes, we're fortunate to have a lot of salt domes available in the area.

And they have a lot of experience with developing these salt domes for like, say, propane propylene storage as well too. So there's combination of the opportunity plus also we've got the folks who can develop these fairly quickly. And then there's going to be, generally, getting back to the sequestration, like the blue hydrogen and the carbon removal from more traditional industries, there's going to be a continued build-out of carbon sequestration infrastructure. So there is some CO2 pipeline capacity available right now, especially between Texas and Louisiana, in that quadrant. But there's going to be a lot of work tying that into, let's say, depleted fields. We use that as reservoirs to store the CO2 very long-term. So there's going to be also an awful lot of work at the individual sources of CO2 on capture. And we, KBR, we've also done that work as well too, so we can offer that service as well so there's a lot of different ways that we as KBR can help in this transition.

John Arnold

Sounds like lots of multidisciplinary expertise across the board. I love to hear about it. Before I let you go, Shane, is there anything else you'd like to add today?

Shane Tierling

Yeah, sure. I mean, absolutely. I mean, obviously very excited to be part of this, something new and developing here at KBR. And every day you got to bring your A-game to work 'cause there are interesting novel problems maybe nobody's ever solved before, and you will have to figure out the solutions to those problems and help the world in this transition that we're all looking forward to.

John Arnold

Well, it's exciting to be able to tell the story because this is something that decades down the road, we're going to look back and say that this was perhaps an inflection point in solving some of these big challenges with climate change and energy transition and making energy more affordable and secure. So thank you for the work that you're doing to make that possible, not only in blue and green hydrogen, but also with the circular economy and solutions like hydro PRT. And thanks so much for being here on the podcast with us today.

Shane Tierling

Yes, sir. Thanks a lot, John, and it's been great having this opportunity to talk with you and spread the word.

CONCLUSION

John Arnold

Thanks so much. A big thank you to Shane Tierling for his insights on an exceedingly interesting and important topic. It's a comfort to know that indeed the energy transition is here. It's a big time in the world, and I'm glad we've got people at KBR like Shane working on these major challenges. Be on the lookout in the next few weeks for the final installment of this miniseries on the global energy transition.

I want to thank my colleague, Bex Lewis for her help in getting this episode together. Thanks always to our producer, Emma for the work she does in making the podcast happen.

And big thanks to you, our listeners. If you like what you heard today or want to let us know, or if you have an idea for a future episode, let us hear from you by emailing us at inorbit@kbr.com. There's a lot going on in the world right now. We're grateful that you took some time out of your day to check in with us and keep us in your orbit. Take care.