Podcast: Play in new window | Download (Duration: 33:59 — 23.3MB) | Embed
Subscribe: Apple Podcasts | Google Podcasts | Spotify | Email | RSS | More
The 2050 Net Zero carbon target challenges all of us across the globe. Manufacturing and Production companies that are part of the hydrocarbon value chain are particularly challenged in driving their operations toward Net Zero.
LyondellBasell Chief Procurement Officer Jennifer Jewson and Artemis Energy Partners CEO Bobby Tudor join Emerson’s Denka Wangdi and me in this special podcast to discuss the importance of collaboration and engagement in tackling the Net Zero challenge.
Learn more about some of the initiatives underway by visiting the LyondellBasell Sustainability section on their website, the Carbon Neutral Coalition and Houston Energy Transition Initiative websites, and the Sustainability section on Emerson.com.
Jim: Hi, everyone. I’m Jim Cahill and welcome to another “Emerson Automation Experts” podcast. In today’s special podcast, I’m joined by Jennifer Jewson, LyondellBasell’s chief procurement officer, Bobby Tudor, retired founder and CEO of Tudor, Pickering, Holt & Co., and currently the CEO of Artemis Energy Partners, and Denka Wangdi, Emerson’s director of sales for sustainability and growth. We’ll be discussing some of the sustainability-related initiatives they are advancing. Welcome, Jennifer, Bobby, and Denka.
Denka: Thanks, Jim.
Jennifer: Thank you.
Bobby: Thanks so much.
Jim: Well, it’s great that you’re all here. We’re excited to have you share your perspectives. I guess, Bobby, let me begin with you. You have a vast background, including beyond what I said in our introduction being currently Chairman of the Houston Energy Transition Initiative, a consortium of Houston’s leading energy companies working to shape the region’s energy transition strategy. Also, you are the board member for the Carbon Neutral Coalition and several other organizations, and other various positions. That must keep you pretty busy, all that going on.
But let’s start by asking you about the Carbon Neutral Coalition and its goals.
Bobby: Jim, the Carbon Neutral Coalition is a coalition, very broad-based coalition of stakeholders in Texas. It’s a Texas-centric proposition. It was put together by Corby Robertson of the Quintana Corporation. And the aim of the Carbon Neutral Coalition is to organize and sort of unite a very broad base of stakeholders in the incumbent oil and gas industry in Texas who are focused on driving the movement of the industry towards true carbon neutrality. And that would include upstream producers, midstream gatherers, downstream users, mineral rights owners, ranchers, landowners broadly, environmentalists, etc. So, a very broad-based group of stakeholders.
And the desire at the end of the day is to have a oil and gas business in Texas that is, in fact, carbon neutral. And so, all of the things that might help get us there are the focus of the Carbon Neutral Coalition’s. That would include carbon capture, use, and storage, CCUS, it would include regulations around methane detector measurement and capture, it would include the elimination of routine flaring, etc. So, it’s really focused specifically on what I call the incumbent oil and gas business in Texas and a drive to make it carbon-neutral over time.
Jim: Well, that certainly sounds like a large challenge for a hydrocarbon or carbon-based business to become carbon neutral in all of that. But I know we’ve got a lot of people here in the state energized to take on that challenge. Jennifer, you have an amazing background with a PhD in inorganic chemistry and an MBA and a lot of experience in your background from perusing LinkedIn, research, chemistry, consulting, feedstock, unit acquisitions, and overall procurement for materials and services.
I guess with that broad experience, can you share how LyondellBasell is advancing its sustainability initiatives to drive towards net zero?
Jennifer: Sure. So, we actually just announced an updated version of our initiatives. And so, we had originally said we were going to reduce our Scope 1 and Scope 2 greenhouse gas footprint by 30% by 2030. Well, we just raised that to 42%. And we are joining the Science-Based Target initiatives as well so that they can help look at the programs that we have at the sites to make sure that they’re vetted and they’re using the latest technologies.
So, we look at the sites, so that’s Scope 1 and Scope 2. We’ve also announced a Scope 3 target, which is a reduction of 30% by 2030 as well. And so, with all the sites, we have, our carbon reduction programs in place, and we are looking at things like alternative fuels, renewable energy, electrification, so all of those things as we create these roadmaps by the sites.
We signed six actually virtual power purchase agreements in the U.S. this past year and two in Europe. And so, we have a target there where we’d like to have at least 50% of our electricity through renewable by 2030, and then at least 75% of our energy, which should be low carbon. So, we’re working on that as well, and so, for electricity.
So, with all the power purchase agreements we did, we actually combined, it actually could power, I think it’s 370,000 homes. So, it’s exciting for us. So, we drive towards 2030, and then we do have a goal of net zero by 2050. And so, it is very important that we keep on these roadmaps and keep driving the sites.
Jim: Well, congratulations on driving an even higher target for 2030 and all the great things you’re doing so far to move yourself down that path towards net zero.
Denka, let me ask you to share ways Emerson is helping our customers, like LyondellBasell, to achieve their sustainability targets.
Denka: Yeah. Sure. Thanks, Jim. And I just wanted to preface by thanking Jennifer and Bobby for joining us today. So the platform for Emerson essentially is…it’s almost in three manners. It’s “greening of,” essentially how do we keep our own house in order. And it means improving our carbon footprint across 187 facilities. Our “greening by,” which is essentially the technologies that we serve companies like Lyondell with our solutions, our technology that really help them along their sustainability journey.
And then the “greening with,” which is almost the most powerful. It’s, like, the understanding of the ecosystem whether it’s working with universities or the Carbon Neutral Coalition, or really partnering and making sure that we are embedded into that ecosystem. So, the greening of essentially is a smaller mix. It means that we can check off our Scope 1, 2, and 3 net zero targets, which is for the year of 2045, and our Scope 1 and 2, which is for 2030.
Now, we’re far along the ways to making sure our Scope 1 and 2 is met, but when it comes to vendor selection or supply selection, Lyondell and all of our other customers are looking at the people that they wanna partner with to making sure that we’re meeting our targets. So, that’s essentially point one. But really the secret sauce or, if you will, our strength is around the greening by. And if you think about the chemical industry alone, Jim 60% of CO2 comes from just the combustion process.
And Jennifer touched on Scope 3, which is in the chemical industry, about 75% of the total emissions, 75%. I mean, that’s insane. So, the way that we help, whether it’s optimizing the steam turbines or their pumps, their facilities, pressurized equipment, it’s done through really the advancement of digitization, digital solutions, efficiency improvements is how we get there. And then really putting and ensuring, like, there’s a change management taking place. So, the way I like to say it is our greening by is essentially a customer’s greening of.
Jim: Yeah. That makes total sense as an automation supplier and all the digital technologies that we can help people in their journey through a number of different ways. Thanks for sharing that, Denka.
Bobby, with Texas being an energy hub for all of North America and even beyond globally, what does the energy landscape look like as we go forward?
Bobby: Well, in many ways, Jim, it will look much like the historic landscape and in other ways, it will look dramatically different. And here in Texas particularly, I think we are very clear that the challenge is, in fact, a dual challenge, which is to say we have to deliver reliable, affordable, and secure energy to the world today, while at the same time, dramatically driving down CO2 and other emissions. And if the challenge were just one of those two things, it would be quite a different proposition.
But in fact, the challenge is that we need to be able to walk and chew gum, which is to say we have to do both of those and we have to do them simultaneously. And so, a big part of the energy complex here in Texas will continue to be focused on the former, which is to say, just delivering reliable, affordable, and secure energy today to the world as it’s needed. And then there’s also a subset of companies who will be doing that and will be focused on truly new things. And there will also be a group of companies focused exclusively on innovation, new company formation, new forms of energy, and all the services that go around that.
And so, it’s really a very exciting time, but we have to remind ourselves that there’s no one silver bullet. Energy is truly a system or in fact, multiple systems that are highly, highly complex, and the challenges that we face are multifaceted. There are challenges of the physical world, of chemistry and physics. There are also challenges of the geopolitical world, security, and reliability. And then there are challenges of the consumer, which is to say that people who are using energy every day are simultaneously desiring, if not demanding, that it be cleaner and lower emissions, yet they also want it as cheaply and reliably as they can possibly get it.
So, you roll all that together and it means that the challenges are huge and complex, and likely to take a long time. But the good news is that we have a world that is increasingly focused on this challenge, and ultimately it’s our industrial companies like Jennifer’s companies and many, many others who will drive the change that’s needed for us to get to where we need to go, which is to say dramatically lower CO2 emissions to mitigate the worst impacts of climate change.
Jim: Well, that does…that dual challenge there certainly presents a lot of challenges. But with the amount of people focused and all that brain power, there’ll be technology innovations, there’ll be a lot of things along the way that help us drive that way just by the sheer focus on the challenge there.
Jennifer, I guess the same question for you. How do you see the Texas energy landscape from your perspective as we go forward?
Jennifer: So, I think what Bobby said was spot on. I think for Texas… maybe to take one step back, this year with the Russia-Ukraine War really highlighted the need for energy security and we saw costs rise tremendously. And so, I mean that really hit at home for all of us in industry, especially those of us that are global companies watching that.
I think for Texas you do need…you need reliable, low-cost, but sustainable energy. And so, I think when we look at what we do as an industry, it’s got to be reliable, rateable energy. So, renewable energy’s wonderful. We love investing in it. I think it is absolutely important for our future. Battery storage isn’t where it needs to be yet today. So, I think you are going to need other sources of energy. So, I think it’s gonna be, I always call it lumpy. You’re gonna have a lot of different things moving, and I think Bobby said it very well, it’s going to take time.
So, I think about hydrogen. And so, we’re actually participating in a collaborative group with Chevron and with Air Liquide to bring hydrogen as a hub. So, infrastructure. Infrastructure takes time, it takes a lot of money, but I love the opportunity now that we can collaborate in this sustainability space. We collaborate more now, and I think that’s very exciting.
So, PetChem companies, because of IP, we didn’t always maybe collaborate as much, but we are today. And I think it’s really important that we’re doing this because there’s high cost and higher risk. So, if you can get supply and demand together, working together, it adds a little bit more comfort as you go through the infrastructure build or the technology improvements or driving new technology.
So, I mean, for me, I think you’re gonna see a big change. Hydrogen could be…it could be blue, it could be green. I mean, we’ll see what that looks like, but I do think that is an alternative way to look at energy. So, renewable energy, hydrogen as a source. And one other comment too, here in the Houston area, you’ve got a lot of olefin crackers. And a lot of them are cracking ethane because ethane is a lower-cost raw material. When you crack it, you do actually make a lot of hydrogen.
So, a lot of folks are starting to recycle their hydrogen to also cut down on the natural gas they’re using. So, I think people are getting smarter, they’re becoming more energy efficient, and I do think you’re gonna see a change over time. And I agree, Bobby, it’s gonna take some time. But if you have a lot of companies that are willing to collaborate, I think it allows for a much higher success rate going forward, and faster.
Jim: Yeah. I think that collaboration is everything. I mean, from a supplier standpoint of equipment to understand the challenges and move the technology along to help address that, and then some of the examples like recycling that hydrogen, with hydrogen being so promising an energy carrier there though, yeah, it’s…we’re on the train moving that direction, and it seems to be accelerating, which is great.
Denka, since a large part of our automation business is here in Texas, how do you see it, how we play in the Texas energy landscape, and how it’s evolving?
Denka: Yeah. So, I was saying that we’ve always been industrial leaders in aerospace, in healthcare, in oil and gas. And now really this energy addition, if you will, is where we take place as the frontier runners in the renewable sector. So, in 2022, Texas added 8,000 megawatts of solar and wind as well. California, just as a benchmark, was only 3000 megawatts.
So, we look at the amount of infrastructure and capital that’s being invested in the renewables, and then to what Jennifer said around the hydrogen hubs, that mix of who we’re working with and the companies that we’re working with. I mean, you see lithium refineries coming in place, Tesla has moved and big tech has moved into Texas in a very meaningful way. And with that, what do you get? You get a lot of startups, a lot of Cleantech companies moving in this space as well.
So, I like to put it into two ways. The industry has changed, and more importantly, I almost say, like, the talent demographic has changed.
And what do I mean by that? I don’t think people understand, like, Texas is the fastest-growing state in the rest of the country right now. Houston is the most diverse city, beating out LA and even New York. So, when it comes to thinking about what makes us special, we have 8 billion people in this world that need clean energy, that need reliable sources of energy, and the talent is here. So, in some ways, Texas is positioned to be the epicenter of how we actually enable other areas of the world to come and go green.
Jim: And I think Texas is a place that’s blessed with all forms of energy from the carbon-based ones that were being creative in how we remove the carbon or capture and sequester the carbon to the wind, the sunshine, and everything else in there. So, it seems natural that blessed with all this energy, that we lead the way in helping the world with how to reduce the carbon and all of that energy.
Bobby, let me turn to you. Can you share your views on the importance of partnerships in achieving these net zero goals?
Bobby: Well, the goal certainly will not be achieved without partnerships and collaboration. That’s very, very clear. And I would say it’s clear for two reasons. One is that, as I mentioned before, there’s no silver bullet here and we’re going to have to have progress across a very, very wide range of issues. And some of that has to do with technology, some of it has to do with markets, some of it has to do with customer preferences. But there’s a very wide range of issues that will require solutions. And no one company touches all of those, and no one regulatory body touches all of those for that matter.
So, almost by definition, we have to have collaboration and partnerships. But perhaps the even more important reason, and Jennifer touched on this earlier, is risk sharing I think is going to be really, really critical here. The IEA says we need to be spending call it $4 trillion per year globally every year between now and 2050 to meet the goals of the Paris Climate Accords. We’re currently spending about $1 trillion globally. So, we’re $3 trillion a year short, and we’re whatever the number is, 28 years away. So, we’re talking about a lot of capital required here.
And there is no one company nor is there any one government that could possibly afford to pay for the majority of that. The capital is gonna have to come from everywhere. It will have to come from governments in the forms of R&D and grants, and tax incentives. And we’re doing a lot of that here now and the EU is close behind us. A lot of it is gonna have to come from the private capital markets true risk-taking where that…whether that’s at a venture capital level or a more traditional private equity level. A lot of it’s gonna have to come from the budgets of our big industrial companies who generate free cash flow and are gonna have to take some of that free cash flow and invest it in innovation and new products and new ventures.
And ultimately, and this is quite an unpopular thing to say, but I’m gonna say it, ultimately, it’s gonna have to come from us as consumers of energy. We’re gonna have to be prepared to help pay for the innovation and incremental cost that’s required to decarbonize quickly on the pace that we need to be on to make all of this happen. So, it is going to require collaboration and partnership across every corner of industry and every corner of our society, and every corner of government around the world.
This is a massive, massive undertaking because there’s a huge amount of inertia in energy systems. They are big and complex. We have to be able to leverage what we already have because completely replumbing the world’s energy systems is simply too expensive and it will take too long to have an impact on the problem, the climate change problem, in the way that we really need to. So, I’m a big believer in the importance of collaboration.
Jim: Yeah. When it extends to all of us, even as consumers, that’s everyone’s got a stake in this and everyone’s got… step up for their part of it.
Jennifer, I was fascinated reading through on your website about how your company will achieve your goal of ending plastic waste. Can you share more about the ways you’re tackling this goal?
Jennifer: Sure. So, we actually were a founding member of the Alliance To End Plastic Waste. And so, we have…we actually have a multi-pronged program. So, our goal is to get to 2 million metric tons of recycled product that we sell in the market. And it can be from chemical recycling, mechanical recycling, or a circular, like, renewable feedstock.
So, on the advanced recycling, we actually have our own technology, we call it MoReTec. The MoReTec technology takes hard-to-recycle plastic and it makes it into what we call pyrolysis oil. And that oil can then be cracked to create olefins that can then go into polymers.
We also look at things like JVs [joint ventures], we get involved with those as well, again, about the collaboration part that Bobby was talking about. So, we’ve invested in some JVs already, a state-of-the-art sorting units. One is in Germany with Source One Plastics. We are also part of a partnership in Houston to reduce the landfilling that’s going on with Exxon and Cyclyx.
So those are areas where we’re now trying to procure the recycled materials plastic bottles and whatnot to bring into our facilities to either, make pyrolysis oil out of or also expand into our current mechanically recycled programs that we have. We just signed a few more MOUs and LOIs with others so that we can also make more, we have one already QCP in Europe where we make mechanically recycled polymers.
So, we look at things like our Circulen brand that we’re trying to bring to market, working with our customers that really want it. They want to be able to say things are made out of recycled plastic. I think about the drink cups that a lot of the fast-food restaurants are now recycled plastic. So, the biggest issue there really is not the technology, it’s the collection of the plastic.
So, I think for us, again, talking about partnership, the way to make that happen is to partner with folks maybe that we wouldn’t have partnered with in the past and start trying to figure out how to solve that problem so that we can bring it into our sites and use it. So, I’m actually super excited to see us doing this and really expanding. We also on our leadership team, as we reorganized under Peter, we do have a circular and low carbon solutions business line. And I think that’s important so that we are more customer-facing to try and bring those solutions to customers and help them be more innovative as well.
Jim: Well, and that really brings that partnership aspect to life, all those different ways you described your working with others to do some of that. So, that’s really exciting from what Bobby said that you as a company are putting that into practice and really driving what you’re doing for more sustainable operations.
Denka, what role can we play in helping Lyondell and other companies in this?
Denka: Yeah. Jim, I sometimes think about, adding to what Bob and Jennifer said, we are in some ways the conduit to making sure that the alliance or the partnerships make sense. Like, we’re the vehicle. We ourselves don’t do the production. But I have never signed more three-way NDAs, I’ll tell you this much, between companies that are very similar to us. So, I think that there’s been a natural collaboration and a congregation in trying to do the right thing, which I have not seen in the last 10-plus years.
And, I think I’m very passionate actually around the greening with, Emerson’s greening with, in our ethos. And it means how do we work with OEMs, with maybe even competitors, dare I say it, but people who are in the same space of how we bring solutions to the Lyondells or to the other customers that we have.
And I go back to this, look one fundamental saying that I think it’s a Zambian proverb. If you run alone, you run fast. But if you run with others, you run far. And the whole purpose of what we’re doing is we want to run far, past a net zero goal, past what Wall Street is expecting. I think we owe it to our children and our children’s children, who are by the way, ready to pay for it.
I think Bobby touched on it is up to us as individuals to be able to say we will be able to maximize and make sure we are able to deliver those promises, but our next generation are willing to actually spend in that more efficient manner. So, I think I’ll conclude with this. I don’t think that the ecosystem or the partnerships are linear, which we’ve often thought about, but they’re in some ways almost like a bubble of moving the same way in the same direction in a very calculated manner.
And it’s almost the analogy, the fingers have a job, your body parts all have a job. But when you come together and you’re able to actually make the impact that is needed, it’s so much more meaningful. So, I think we have to think of sometimes putting the ego aside and understanding how can we come into alliances and partnerships in a very meaningful and calculated way.
Bobby: Jim, one thing I might add, if I might, to Denka’s comments is that an area of importance in the energy transition that probably doesn’t get enough airtime, if you will, is just that of efficiency gains and conservation. And, we can think a lot about alternative forms of energy. That’s one way of kind of getting out greenhouse gas emissions. But we can also think about more efficient operations that in fact conserve energy so that we don’t have to use as much of it to create the same amount of energy output in industrial activity.
And when I think of the business automation world and of Emerson in particular, your company is right at the heart of that. And I think that alone is sort of poised to make really, really big contributions to this whole effort. So, we need to remember and concentrate on the role that industry and industrial automation can and must play in the energy transition. And we’ll be counting on Emerson and your like-minded companies around the world to help us do that.
Jim: Yeah. One thing that’s really helping in this area is technology advanced and wireless communication has grown. It’s really the ability not just to instrument a plant to control it, but to really measure how are we doing energy-wise and others. So, more companies can take advantage of that. And creative engineers in our industry are figuring what are more things we can put devices and analytics and other things to help drive greater energy efficiency. So, I appreciate you bringing that up.
That’s something that we wanna make sure we’re continuing to advance the technology to make it easier and easier for people to be able to do that and drive their energy usage lower. I guess let’s wind down. This has been a great discussion, and I know that our listeners have gotten some, or will get some great things out of it.
I guess kind of a looking forward, Bobby, what progress do you see being made by the end of this decade?
Bobby: I think there’ll be tremendous progress across a whole range of areas, some of which we’re already sort of firmly on the path. So, for example, in the world of renewable power generation, I think we will continue to have very large expansions of wind and solar, and hydro, and geothermal, and other forms of renewable power generation. So, we’ve got great momentum there and we’re on our way.
I think the evolution of hydrogen is a really important component of this. The next three or four years is critical for the hydrogen world for us to get to economics that make both blue and green hydrogen possible and feasible and desirable. And then I think there’s a whole nother bucket of things that we will be doing at the end of this decade that we can’t even imagine today.
And much of that will come, I think, out of our DOE labs and our research universities. And those two things are real competitive advantages that America has versus the rest of the world and we need to put them to use and put them to use in a very big way between now and the end of the decade. So, I kind of go back to my original point, Jim, which is that there’s no silver bullet. This is going to take a little bit of progress across a million different things. In the aggregate, we can make a big difference. We can dramatically drive down CO2 emissions and live in a much cleaner, more sustainable world.
Jim: Yeah. I think that’s an excellent summation. And, just in energy storage alone, there may be some breakthroughs that we can’t even imagine now in the seven years we have left in this particular decade.
And Jennifer, I know that you said you’ve lifted, what, from 30% to 42%, what you’re gonna do by the end of the decade. But beyond what you said earlier, what do you see advancements as we close out this decade?
Jennifer: So, I mean, I think for us to get to 42%, and I think a lot of companies that look like us are very similar trying to do the same thing, it’s not just about energy efficiency. You actually have to do something holistically different. So, carbon capture carbon capture is one, hydrogen is another. So, I do see, I agree with Bobby.
I think, we have the Inflation Reduction Act, we have ways now that helps, I think, encourage this and support moving forward so that you do have, the right cost levels to make it work, hydrogen in particular. So, I actually do think by the end of the decade, you could see a lot of things starting to come online. And so, the other thing I think too is that I think as this starts to grow, it’s the beginning is always a little bit slow, but once you start to get to momentum, it really starts to take off.
So, for example, trying to get wells permitted, these types of things. Folks will start to see it and hopefully help us streamline it and make sure that we can do these things a little bit better, a little bit faster. So, I think by the time we get to the end of the decade, I think you will see a lot more renewable power. I agree with Bobby on that. I think hydrogen’s another one.
I’m excited about what technology’s going to be there that isn’t there today. Those are the things that are super exciting. I think energy storage would be great. So, that’s one where I really do hope we see even more significant advancements. But even for us in our labs, we’re looking at making products differently in the future than we make ’em today. And so, these things that we partner with universities as well. And so, I think the “not knowing yet what’s gonna be out there” is kind of super exciting to me.
Jim: Well, that’s also excellent summation. There are so many different things going on, and each of us and where we’re at have a big role to play with that. Well, I want to thank you all so much for sharing your time and your expertise with our listeners. And I know we look forward to doing our part in helping meet these lofty goals that we have before us and improve the quality of life we all enjoy again. So, thank you so much.
Denka: Thank you. Thanks, Jim.
Jennifer: You’re welcome.
Denka: Thanks, Bobby. Thanks, Jennifer.
Bobby: Thank you. Thanks for having us.
-End of Transcript-