Catalyst with Shayle Kann - Serving data center load with carbon capture

Episode Date: April 17, 2025

Big tech’s data center construction boom is fueling a flurry of natural gas development, despite the fuel’s challenges, and it’s complicating big tech’s climate goals. But carbon capture and storage (CCS) could mitigate emissions from those new plants, and hyperscalers could secure low-carbon power while meeting their needs for speed and reliability.  So how could natural gas with CCS serve data center loads? In this episode, Shayle talks to Julio Friedmann, chief scientist at Carbon Direct, who recently co-authored a couple pieces on the topic. Despite recent high profile cancellations of natural gas projects, Julio makes the case that gas-plus-CCS has attractive advantages, provided the carbon capture actually happens. Shayle and Julio cover topics like: The surprisingly attractive economics, even at lower flue concentrations Where it may compete with renewables, storage, and nuclear The challenges of siting CO2 infrastructure and uncertainty around the 45Q tax credit Whether “CCS-ready” kicks mitigation down the road, like H2 blending Big tech companies like Meta that are signaling interest, but not taking action The range of CCS technologies and the manufacturers jockeying to supply them CCS’s uncertain political future in the U.S. Recommended resources: Carbon Direct: Carbon Capture for Natural Gas-Fired Power Generation Carbon Direct: Carbon capture for natural gas-fired power generation: An opportunity for hyperscalers Latitude Media: Where does gas fit in the puzzle of powering AI? Latitude Media: High costs, delays prompt withdrawal of five more Texas gas plants Latitude Media: Hydrogen-ready’ power plants aren’t actually ready for hydrogen Latitude Media: Engie’s pulled project highlights the worsening economics of gas Credits: Hosted by Shayle Kann. Produced and edited by Daniel Woldorff. Original music and engineering by Sean Marquand. Stephen Lacey is executive editor. Catalyst is brought to you by Anza, a platform enabling solar and storage developers and buyers to save time, reduce risk, & increase profits in their equipment selection process. Anza gives clients access to pricing, technical, and risk data and tools that they’ve never had access to before. Learn more at go.anzarenewables.com/latitude. Catalyst is brought to you by EnergyHub. EnergyHub helps utilities build next-generation virtual power plants that unlock reliable flexibility at every level of the grid. See how EnergyHub helps unlock the power of flexibility at scale, and deliver more value through cross-DER dispatch with their leading Edge DERMS platform, by visiting energyhub.com.

Latitude Media, podcast at the frontier of climate technology. I'm Shail Khan, and this is Catalyst. We're building the gas plants anyways. They're being built, so it's not a question of do you do A versus B. We're already doing A, we're just emitting uncontrolled. Coming up, shocker, we're talking energy for data centers, but this time put some carbon capture on it. When utilities need flexible capacity they can count on, they turn to Energy Hub.

Energy Hub works with more than 170 utilities, coordinating over 2.5 million devices to manage 3.4 gigawatts of flexibility, built for the moments when utilities can't afford uncertainty. Energy Hub builds and operates virtual power plants that utilities actually stake their grid planning on, coordinating EVs, batteries, thermostats, and more through a single platform built for utility scale. Predictive, verifiable, and designed to perform when it counts. Learn more at energyhub.com. Trillions of dollars are flowing into clean and critical infrastructure, but those investments aren't driven by technology alone. They're shaped by markets, by policy, by capital, and by the institutions that connect them. I'm Alfred Johnson, CEO of Crux, and host of a brand new podcast, Critical Capital. Each episode, I talk with people deploying capital, shaping policy and building the clean economy. Tune in as we unpack how progress is actually made. Listen to Critical Capital

on Spotify, Apple, or wherever you get your podcasts. Catalyst is supported by Fish Tank PR, an award-winning PR firm focused on climate and energy tech, renewables, and sustainability. Fish Tank is known for generating prominent and effective media coverage for the brands they work with. If you want a PR partner that's thoughtful, shoots straight, and gets results,

you'll like Fish Tank PR. To learn more about Fish Tank's approach, visit fish tankpr.com. That's F-I-S-C-H-F-T-T-P-R.com. I'm Shail Khan. I lead the frontier strategy and energy impact partners. Welcome.

All right, I promise we're not going to talk about data centers and energy every other episode forever. Or, I don't know, maybe we will. I can't promise anything. Give me a break. Anyway, we have talked before a little bit about the build out of natural gas

that is planned in the United States and a bunch of other countries that is being driven by data centers. But what about the fact that most of the companies that are driving that demand, the hyperscalers in particular, have been on the vanguard of decarbonization commitments and take it pretty seriously. Are they just going to purchase carbon removal to infinity?

Maybe not. Maybe this is finally the moment for natural gas with carbon capture. Or maybe it's a mirage, as it has been many times in the past. Anyway, let's explore. Julio, as many of you know, is the self-proclaimed carbon wrangler, but he's also the chief scientist at carbon direct, and he's got thoughts, which if you know Julio, makes sense. Here he is. Julio, welcome back. A pleasure as always. All right, let's talk data centers and natural gas and possibly carbon capture and sequestration.

Starting, though, before we get to the CCS part, can you just give an overview of what you see as happening right now with regard to data center energy consumption and specifically natural gas build out or supply? Absolutely. So since the last time we talked, a lot has changed, actually. For starters, we've learned the top five things that the hyperscalers and people building data centers want is, in this order, speed, speed, cost, and carbon. All of those are important, but speed is the thing that is driving a lot of this. The second thing we've seen is we've seen some very large announcement. 5 to 10 gigawatts is the biggest, but many multi-gigawatt announcements, many of these are multi-billion-dollar announcements, and involve very large data centers, hundreds of acres.

And when you say multi-gigawatt announcements, what you're saying is announcements of new generating capacity, natural gas generating capacity, to be constructed to serve those data centers? Exactly, yes. because of this urgency and speed and because of this, we are also starting to see some pushback in the form of companies canceling some projects. We are also beginning to see shortages for natural gas turbines, like all of these things are starting to hit the reality of it.

But we continue to see interest in moving quickly. We still see interest in large volume in terms of both the size of the data center and the demand for high quality, high-capacity factor electricity. Okay, so lots of planned new natural gas build-out, though subject to the constraints you described, right, like turbines are backlogged until, I don't know, GE has said 20-29 or 2030 or something like that, and prices have gone up, but nonetheless, it appears we're going to build a lot

new of it. And then, as you said, number five on the list of five priorities remains carbon, so it's on there. So then the question, of course, is if we're going to build this natural gas, there's kind of no way around it, or at least that is a perception, then should we be throwing carbon capture on it? And so I guess the first question there is, is anybody in data center world already talking about that? Are there announced projects that would be natural gas with CCS? Are they talking about it? Yes. Are there announced projects? No. But we are getting a lot of inbound on this exact topic. And we are talking to, if not all of the hyperscalers,

almost all of the hyperscalers. We're talking also to private groups that are developing energy parks for data centers and other electricity offerings. We are talking to utilities. This is very much of great interest to people. Some of the reason why things have not been announced is just because it takes time to put these things together. Some of the reason is that there is uncertainty out there. There's uncertainty. uncertainty around things like 45Q. There's uncertainty around the speed of permitting wells. But there is a great deal of interest, especially in North America, but not exclusively North America. Let's divert for a second from the data center thing. Can you give me like a brief

history and state of natural gas CCS globally? How much of it is there anywhere? Happy to. So even a little bit farther back, the first carbon capture device was fielded in 1938. We know how to do this. The first CO2 injections were in 1972. We know how to do this. We've been doing integrated systems for climate since 1997. So this is not exactly a new technology. And we have deployed CCS on some 40 facilities around the world. We're capturing around 60 million tons a year and inject to get underground. Originally, that was mostly for enhanced oil recovery. Not anymore. Now it is mostly just for climate and saline aquifer storage. All carbon capture technologies are tested on natural gas. This is an aspect of how you mature the technology. And the reason why is

because natural gas doesn't have like sulfur in particular, it's in a whole bunch of other nasty stuff. So every technology that's out there is tested on natural gas, both in the U.S. at the national carbon capture center and in technology center, Monkstadt, in Norway. There is one announced project that is under construction in the U.K. And this is a large, project in the T-Side, T-E-E-S-I-D-E facility in northern Scotland. And this is a place where they will be taking the CO2 offshore, storing it under the North Sea. But they are building a new natural gas turbine there, and it is going to be integrated with CCS. It is under construction, plans to turn it on in 2026.

And that is the first – I just want to clarify what you said. We have 40 carbon capture facilities all over the world operating, but none of them are on natural gas power generation, right? And so that T-Side project would be the first new natural gas project with CCS. Correct. And this is for perfectly valid technical grounds. The main one is that it costs more money to capture CO2 from a low-concentration flu gas stream. And natural gas plants, when they're running well, are between four to seven,

percent CO2 in the flu gas. So it actually costs more money on a dollar per ton basis to capture the CO2. Something that people are waking up to in the modern moment is that from a dollars per megawatt hour basis, it's the opposite. It is actually, because the natural gas energy content is much higher than other fuels, you can capture a lot of a CO2, but it is not require as big a parasitic load in terms of dollars. So this is one of the things that's in our recent reports. Like we've been writing about this recently. It's been known for a long time.

If you think about it in terms of dollars per ton, natural gas is the most expensive. If you think about it in terms of dollars per megawatt hour, it's actually the least in the power sector. So just to make sure I understand that. So if I'm comparing natural gas to coal, for example, if you're just measuring the dollars per ton cost of doing the capture and sequestration, natural gas can be more expensive than coal, lower CO2 content, or lower concentration. But if you measure it as an adder to the dollar per megawatt hour cost, the LCOE of the project, it would be a smaller adder. Is that the right way to think about it? That is exactly the right way to think about it. And the reason why is coal

emits more CO2 per unit of energy. So there's an interesting dynamic, though, and I guess at the high level I want to get your take on this, which is, I think the fear would be, okay, we're going to build out all this new natural gas. And so there's, as you said, discussion occurring about making it carbon capture ready or implementing carbon capture from day one. And I want to get into some of the nuances of what makes that easier or harder depending on the situation or location. But to what degree do you fear that it is sort of kicking the can down the road? In the same way the people talked for a while about hydrogen-ready turbines that are going, you know, very few people are actually doing significant hydrogen blending in those gas turbines at this point. Is that given that

there are zero current active natural gas CCS projects, when you hear people starting to talk about that, or even if you start to see announcements, how much credence do you put in them? Let me start by saying this is a reasonable concern. We've been talking about carbon capture power plants for a long time. my friend from the Natural Resources Defense Council, David Hawkins said, hey, if the power plant is capture ready, my driveway is Ferrari ready. Come on in. I do think that this moment is a little different for a couple of reasons. One, we're building the gas plants anyways. They're being built.

So it's not a question of do you do A versus B. We're already doing A. We're just admitting uncontrolled. So actually, I give the builders and the hyperscalers, a lot of credit for keeping the ion carbon. They don't have to, but they really do care about their corporate commitments. They're really focused on keeping the emissions down, but they can't wait. They have to build as fast as they can. The second thing is, again, we couldn't get paid in the past. Now we can. Forty-fiveQ exists. An interesting aspect of this

actually is that the hypers are also willing to pay a premium for the clean in the way that they would with nuclear. But they can build a natural gas with CCS plant in roughly half the time which they could build a nuclear plant. And the third thing I would say is that we aren't going to do this everywhere, but it's not kicking the can down the road. It's kind of the opposite. It is taking responsibility for your emissions. It is actually walking the walk of cleaning up your mess. And so I sort of bridle at the idea of somehow this supports a dying industry and we should be doing renewables. Part of the reasons we're doing this is because there's backups in the renewable cues. Part of the reason we're doing this is because there's supply

chain challenges in renewables as well as in natural gas. Part of the issue is if you want to cite 100 megawatt solar plant, it's a whole lot easier than a 5 gigawatt solar plant. So there is hair on all of this. I do believe that in a bunch of markets, renewables will be cheaper and will be faster. If that's the case, build the renewables. But yeah, I'm not making any statement with regard to renewables. I'm just wondering, and maybe here's the distinction. Tell me if this distinction matters to you.

Will the projects be announced as we are building a new natural gas plant with CCS from day one versus CCS ready? Right? It'll take a while for that to click, but the answer is we better be doing that. So you've seen this large

announcement of this meta project in Louisiana, right? 2.6 megawatts, $10 billion, that's going gangbusters. Gigawatts, right? I'm sorry, yeah, 2.6 gigawatts, my apologies. I have every expectation that there will be carbon capture done on that plant. I know a lot of good people who are working on it. They have not yet made an announcement.

Until they do, it's reasonable to be skeptical to say, hey, you guys are talking to talk? Are you going to walk the walk and actually do the capture? Right. We have not yet seen anybody who says, we're going to add this one and a half gigawatt plant, and we definitely will do the carbon capture. We haven't seen that either, right? Part of that reflects the uncertainty of the moment.

Part of that reflects the complexity of this project, but we have to get to that position. We have to move from capture ready to capture committed. You mentioned costs. Do you have estimates of what measured in, I guess, dollars per megawatt hours, the number that I care about more than dollars per ton? what the adder should be or will be. Right. So we published a report on this back in March. I encourage people to go to the Carbon Direct website.

Take a look. In the U.S., assuming $3 per million BTU for natural gas, on a new build, all costs. That means cost of capture, compression, transportation, storage, and permitting, you're looking at $70 to $100 a megawatt hour. Total. Total. Everything. In many markets, that's competitive with wind solar and batteries. In many markets, that just beats nuclear cold.

I will add, if you retrofit an existing plant, it's cheaper. Because assuming that plant has been fully depreciated, so you're retrofitting something that's in a utility off on the grid somewhere, the cost come in more like $40 to $70 a megawatt hour. So quite cheap. And that means you're looking at something like $25 to $30 a megawatt hour is the adder in most markets. And 45Q knocks off, say, half of that. And let's talk about the siting constraint here.

I mean, we've talked a little bit about, like, there's ample saline aquifer potential for carbon sequestration, whether it be from this kind of point source or DAC or whatever might be in the United States. But how much of a sighting, you know, the interesting thing about the buildout of all of this natural gas is it is independent of the carbon capture part. It is citing constraint because either it's co-located with the data center, in which case it is where the data center is, the data center needs to be where the power is available, or it's not co-located, but then you need to figure out where you can inject gigawatts of power into the grid. So either way, the grid is a constraint. And so you're adding an additional siting constraint by trying to figure out how to either, to a pipeline or sequester. How much does that limit the aperture of where you think this is applicable? So first of all, heck yes. We're not going to be doing this in New England. There's no place to source CO2 in New England, period.

Virginia is an interesting case. We are building huge amounts of data centers in Virginia. There's not great storage there, right? So this becomes a real issue. In contrast, of course, Texas, Louisiana, Central Illinois, the Rockies, these are great places to store CO2. Even humbly, California, if you're looking at the Sacramento, the Delta or the central basin, yeah, you can store CO2 in these places. So it does add an extra circle to the Venn diagram. And so you're not just optimizing here for, say, infrastructure, electricity infrastructure, and or fiber. You're not just looking for land. You're not just looking for communities that'll say yes. You also then have to say, hey, am I near CO2 transportation infrastructure, or am I near a viable way to get to storage? And one of the things we've been looking at is actually that there are more ways to move CO2 than most people think about. If the only option was a CO2 pipeline, we would have a much

smaller aperture, but it's not. We can move CO2 by rail. We can move CO2 by barge. And when you do these things, the aperture opens up. So as one example, I'm not proposing this, I'm not endorsing this. But if you wanted to do a CO2 storage project in Minnesota, there's no place to store CO2 in Minnesota. Not an option. But you can actually put a CO2 on the barge and send it down to Louisiana. And that's pretty cost competitive, actually.

In our analysis, we show the cost for that. And it's much more reasonable than a lot of people understand. Virtual power plants are becoming a reliable way for utilities to manage capacity. But enrolling devices is just the start. What really matters is confidence, knowing those resources will perform when dispatched, and being able to prove it, from the control room to the living room. Energy Hub's platform handles the full picture, from near-real-time forecasting, locational dispatch, and the kind of rigorous verification that holds up when regulators,

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Together, we unpack how risk is priced, how incentives are structured, and how progress is actually made. Listen to Critical Capital on Spotify, Apple, or wherever you get your podcasts. Are you tired of overpaying for big-name PR firms, but not really knowing what they're delivering? Is your comms team wasting time reviewing lengthy messaging briefs and decks? instead of engaging journalists or producing content. Are you wondering why your competitors are getting press and you aren't? Fish Tank PR is an award-winning climate and energy tech, renewables, and sustainability-focused PR firm dedicated to elevating the work of both early stage and established companies.

Whether you need to position yourself as a thought leader in between project announcements or translate complex ideas and technologies into tangible, compelling stories that resonate with the media, fish tank can help. Check out fish tankpr.com. That's F-I-S-C-H-F-TankPR.com. Okay, so it limits the aperture somewhat. There may be more places than one might think that you could do it. Let's talk about the technology for a second.

Sorry, before we do that, if I may, I want to make sure everybody hears this. If there is no CO2 transportation in storage, there is no project. Period. Plop. You can't make it work. and as people are citing their data centers, they should be citing with an eye towards that is another piece of resource and infrastructure they could consider. Yeah, though, as you said, it's down the list, right?

There's a big long list before that, and it's challenging to cite data centers, and so it's tough to do that, and it adds more infrastructure and more risk, and so, you know, you can see why it's not the top of anybody's priorities at the moment, because it kind of currently pushes directly against the first three priorities, which is speed. Anytime you're trying to add some additional complexity and permitting and infrastructure,

it's slower, almost inherently. I would push back on that a little bit. Part of why we are seeing what we're just seeing is that people are building the natural gas, and then they're like, all right, well, now let's get serious about the carbon capture piece. So you can build a gas plant fast, and then you have another couple of years to build the CCS retrofit. and over that time you're generating power and you're generating money. So there's another way to think about this.

Since you can decouple the carbon capture and the carbon storage piece from the power generation, you can build it in two steps. To your earlier point, though, that comes with a risk. You've got to actually do the second piece if you care about the climate piece. So about the technologies. Yeah, technologies. I mean, you know, the way you described at the beginning sort of implied, like we've been doing this for decades and, you know, no major revolution needed from a technology perspective.

Is that true as it pertains to natural gas power plants, given that it has not been done? As you said, everybody tests on a flue gas stack for natural gas, and a lot of the stuff that we are actually deploying has other weird contaminants, natural gas doesn't. But do you view the technology risk on, I don't know, how these sorbents are going to perform or their lifetime, whatever? for natural gas as being effectively retired already? Or do we need to see it first? Yeah, it's better than that, actually. So let's start with the established technologies. There's a handful of companies that will today sell you a big facility

with a performance guarantee in a wrapper. And they will sell you like up to 10 million tons of capture a year. They will sell you big facilities. These are Fleur, Schlumberger, Shell Can Solve, and Mitsubishi. These are all liquid solvent technologies, but that technology is in the basket. It's done. Behind them are the next generation of technologies, which are, in fact, really kind of being built for natural gas. So another solvent technology, ion technology, a different kind of liquid solvent,

cans, sorry, capsul out of Norway. There's also physical sorbent technologies like Svante. There's cryogenic technologies like Svante. like Frost CC. There's, what's the other one? Oh, membranes. There's a bunch of companies selling CO2 capture membranes. Interestingly, each of those has a different sweet spot in this ecosystem.

So one of the things we are beginning to see is many of the power hypers are saying, you know what, let's start small. Let's go with 50 or 100 megawatts. If that's the case, you're not going to call Mitsubishi. It's the wrong technology. It's too big, actually, for the, for the, for the, plant that size. But if you're building a 50 to 100 megawatt power plant, hey, maybe one of these other technologies serves you better, either because of the duty cycle or the heat rate or the climate of

the facility itself, whether it's in a cold place or a hot place or dry place or a wet place. And these new technologies are kind of at TRL 6 or 7. They're really getting to the point now where you can deploy them. And so there is an option to come in with these technologies and almost Almost all of them are coming in a little at a substantially lower price. So there's a lot of room to move in terms of the capture cost reduction as well. We've been focused mostly on the U.S. We're both based here. A lot of the data center buildout is here, and we have 45Q.

How much is happening internationally on this? So great question. Glad you asked. First stop is our friends to the north in Canada. They have a substantial investment tax credit, 60% ITC for carbon capture technology. That goes a long way. And in fact, it is not impossible that the first integrated natural gas with CCS data center project will be in someplace like Saskatchewan or Manitoba or Alberta. Second look overseas, the UK is very interested in this, and they are building these industrial hubs.

So in addition to the T-side project, which I mentioned, that's being supported with a contract for differences policy. That kind of support becomes a magnet. You're going to see more of these plants there. In part, that's a way to both have the UK meet its targets, displaced coal, and also serve the domestic natural gas industry. Not to be outdone are friends in the Gulf states, the Mina region. This is a hot-to-drot topic. They are very interested in attracting hyperscalers and data centers. They have poor volume. They have natural gas. So look to Saudi Arabia, the Emirates, Qatar. They're a very interested in attracting hyperscalers and data centers. They are very interested in attracting hypers and data centers. They are very much. They're very much. They're all working this up in real time. Not to be outdone, even though they don't have natural gas resources, look to Japan and Korea. They sell the technology. So they want to sell the turbines, they want to sell the capture tech, they want to sell the EPC contract, and they will do that in a place like Northwestern Australia, or for that matter, in Mexico. Any place where they can actually get the land and the gas and the storage volume, they can put these together. And we have been talking to these large industrial conglomerates in East Asia that are very enthusiastic about exactly this.

They see the opportunity. And because the hyperscalers are a distinct customer set, one that is prepared to pay for clean, it squares the circle of, well, who's going to pay for all this. Cost is an issue for the hypers? It really is. But at $100 a megawatt, even at the high end, they're in pretty good shape. I will reiterate that this number, $70 to $100 megawatts, requires low cost natural gas. So Europe is not going to be doing a lot of this, right? In contrast, though, the Middle East, Australia, yeah, that could work. You mentioned some of the conglomerates that, you know, can provide the turbine and the capture tech and the EPC. I've been curious about whether that's how this market ends up evolving? Is it like, it's a, you know, are there pre-baked

combined package offerings as opposed to, okay, I'm going to buy my turban from GE, and then I'm going to pick my capture technology from somebody else and I'm going to stick them together. I would presume that there is some savings you can yield from a holistic integrated solution. You are correct. One that has already hit the airways that you've seen is this partnership between Chevron, GE Verona and engine number one, which is actually bringing together the capture tech, the financial wherewithal, the storage expertise into one vertically integrated offering. There's something quite similar to that with ExxonMobil.

They don't have their own proprietary capture technology. Watch this space. We'll see if that changes. But they are offering vertically integrated systems. They'll build the power plant. They'll run the power plant. They'll store the CO2, right? Baker Hughes has this as an operating with GE.

Baker Hughes has a capture technology of their own. I think you're going to see Siemens do something along these lines quite quickly. And Mitsubishi has that. Mitsubishi has the turbines, they have the capture tech, they have the EPC contracting. So they are very interested in being the full service partner. And they're not alone. Kawasaki, same kind of thing. Back to the infrastructure question, I mean, you mentioned the places where we can do it,

and the places where we can put CO2 on a barge or whatever it might be. Be interested to get an update from you, though, on permitting, on Classics well permitting, because that obviously has been a long pole in the tent for any CCS project. in the U.S., there's action there, but tell me how much it's accelerating. There's a lot more action than people see. The story six months ago was about backlog. Six months ago, there was this massive backlog of Class 6 wells at the EPA that were not getting permitted. Since then, there have been a flurry of announcements. That includes wells in Louisiana. I would add that includes wells in California. California permitted for Class 6 wells in Bakersfield.

So we are starting to see these happen, and that is being enabled both at the federal level through the training and streamlining of people to do the regulatory permitting. That was money from the bipartisan infrastructure law. They gave the EPA $50 million to train people. Like that's finally coming through. The other thing we're seeing is states are interested. So there's this poll from places like Louisiana that have primacy, North Dakota that have primacy, they're getting their wells permitted.

California does not have primacy. but Governor Newsom wants to see this as an option in the state. And so the state of California has been working with the EPA to get this done. It is by no means settled, but I'm pleased to see the progress we have. And we're slowly banging our way through this backlog of permitting requests to the point where now there are enough holes in the ground that people can start to think seriously about this. What has been the response from, I mean, I guess to the extent that projects are being announced or planned, or we could speculate on this, if not,

the response from local communities to these kinds of projects. I mean, whether the natural gas projects that are being built in the first place or adding CCS to them. Right. So for starters, again, let me reiterate,

the natural gas plants are being built. That is happening, right? And everything associated with them, the upstream fugitive emissions for where that's a problem, that's still happening. So the communities are facing this, choice where they're like, well, we haven't stopped the project. We can't stop the project.

What should we be thinking about? And I've been pleased to see at least some of them are open to the idea of CCS. Most communities still don't understand what it is. They don't understand how it can benefit their community. The community benefits are at best, opaque, at worst, complicated. I'm pleased, again, to see the groups that are doing this are leaning forward pretty heavily. Not just the hyperscalers, but their partners, companies they're working with. They are walking the walk of going to communities. Many of these communities want the revenues, they want the jobs, they want a cleaner environment, and in fact, if you have a natural gas plant that's running uncontrolled, carbon capture reduces the pollutant load. So we're starting to see some traction.

It is very much one by one. This is a retail discussion. You have to really understand each community, engage them where they are, and see what's going on. Mostly, though, I'm happy to see that this is happening. And the most committed people are putting together community benefits plans because they want the communities to benefits as well. Okay, so final question for you, we probably can't avoid talking about this. We're obviously at a particular moment in time in U.S. politics. What have we seen so far from this administration and this Congress that would affect the likelihood of build out, the ease of build out of natural gas with CCS in either direction? So first from the administration, there's a lot of stuff that I just won't go into because it's so rapidly changing and it's not particularly useful.

But we are seeing Secretary Wright propose a set of cuts to programs that were approved by Congress and approved by the prior DOE. In some cases, Congress, I mean, the contracts have already been made. And this is part of the broader rescission around clean energy. It's the doge push. And frankly, that's, in my humble opinion, in error. The United States is a global leader in this technology. If we want energy dominance, this is what it looks like, right? We should be the world leader in these technologies and deploying them and providing services, et cetera.

And if we don't, these other countries like the Middle East and Japan are ready to go. Like, they will just do this. The problem with that sensibility is it will chill projects everywhere. We'll lose a decade of investment if that money gets raked back. People who've put tens of millions of dollars into feed study, people who've been working on permits, they'll just bolt. And we're going to lose a generation of workers and a generation of projects. These are like OSED projects? These are projects in OSED, the Office of Clean Energy Demonstrations.

Yes, the Office of Clean Energy Demonstrations. Thank you. There are also some other projects, ones that were just approved in the bipartisan infrastructure law separately, like the hydrogen hubs or the DAC hubs, the large projects hubs. There are other projects in the annual appropriations that aren't OED related that would also get hit. total just for this class of projects we're talking about $8 billion worth of projects it's bad if that stuff happens it will it will be Galgotha not to mention the sort of hard to quantify risks to 45Q and whatever reconciliation bill is up and coming I think who knows right like I've given up trying to speculate on that well that's where I was going to go with 40 is Congress has got the ball on a lot of this stuff right first of all Congress approved the money for these other things and they approve and authorized the expenditures, the contracts are written. A lot of these projects want Congress to help them get billed.

With respect to 45Q and other tax credits in the IRA, the Inflation Reduction Act, I give high odds that they will sustain, 45Q, 45V related projects, will have to see. Already 21 members of the House have written a letter to Speaker Johnson saying that they want to keep this provision, I believe them. Four senior senators, including Senator Murkowski from Alaska, have come forward and say they want to preserve these particular credits. That's important because both in the House and the Senate, those numbers are large enough to be blocking. And to be clear, that's not specifically 45Q.

It's 45Q amongst a basket of credits, right? It also includes the ITC and PTC and they say the energy. tax credits in those letters. That is correct. In many cases, though, let's say, look at Senator Barrasso or Senator White House. These are provisions for CCS that they personally worked on quite hard. So they haven't pulled them out by name, but I think there's a broad expectation that these are among the more favored classes. Same thing with Senator Kennedy, I'm sorry, Senator Cassidy in Louisiana. Like, there are people of substance in the House and the Senate for which this particular tax credit would matter.

Yeah, it's not, like I said, I've given up on speculating, but it's not hard to imagine that 45Q would be more resilient than at least some of the other tax credits from the IRA. Nonetheless, I mean, I think you've made an important point here, which is there is momentum in this space, but that momentum is, you know, sort of shaky as a result of the current political environment in a couple of directions.

And to your point, I think you said this before, that presumably also delays final investment decisions on new projects that might include CCS as well. 100%. And for me, this is the money question, is literally this kind of uncertainty is killing investment decisions. At best, they're delayed.

At some point in other people just walk away. And it is critically important that the United States resolve these questions firmly and clearly so that investors can put money to work. That includes companies like Engine Number One. That includes companies like the hyperscalers. That includes the vendors. People want to put money in this space, but they need to have confidence in it.

And the uncertainty will kill the investments for sure. All right, Julio. Super interesting. Thank you, as always, for the time. Always a pleasure, my friend. Julio Friedman is the chief scientist and chief carbon wrangler at Carbon Direct. This show is a production of Latitude Media. You can head over to Latitude Media.com for links to today's topics.

Latitude is supported by Prelude Ventures. Prelude backs of Visionaries, accelerating climate innovation that will reshape the global economy for the betterment of people and planet. Learn more at Preludeventures.com. This episode was produced by Daniel Waldorf. Mixing in theme song by Sean Marquan. Stephen Lacey is our executive editor. I'm Shayal Khan, and this is Catalyst.