Energy Capital The Magazine Sep-Oct 2021-Edition 05 by energycapital

FOR INFRASTRUCTURE DEVELOPERS, INVESTORS AND INDUSTRIAL USERS SEP-OCT 2021, ISSUE 05

• Natural Gas Infrastructure Alternates in North America

• The Role of Midstream in the Energy Transition

• ESG Reporting Template: Tailored for Midstream Companies?

Shielding Midstream: A Call From the Future's Energy Needs INSIDE THIS ISSUE: look for our video interviews

Video Interviews

Energy Capital Magazine OPINION 8 Rubi Alvarado Navigating climate change consequences through a weatherization/winterization/ insulation strategy The growing and evolving effects of climate change are becoming more evident. What do energy infrastructure operators need to do to keep their assets safe, resilient, and reliable? Weatherize, winterize, insulate! 10 Aldo Santillan Automation, a leading enabler of the energy transition Efficiency, safety, and quicker returns are critical to reducing the gap from hydrocarbons to greener sources. How do companies get into that position from where to launch innovation? Automation technologies may hold the answer… 12 Noe’ H. Saenz The key to success in managing Energy Projects: Communication Among Stakeholders The key to success in managing energy projects is communication. Not communication systems or procedures only, but communication among stakeholders -with a people focus.

ANALYSIS 14 Energy Capital Shielding Midstream: Towards a New Paradigm for O&G operators As technology makes its way into the industry, security becomes paramount. 2

However, digital assets are still exposed. Recent events show us the importance of shielding midstream infrastructure. Discover some ways of achieving it. 20 Volvo Construction Equipment (Volvo CE) Volvo Construction Equipment's Fuel Test Lab – Advancing Research and Development. Launched in May 2021, Volvo CE's Fuel Cell Test Lab is expected to help the company reach its commitment to the Science-Based Targets initiative. Learn more about this dedicated lab, which is also the first Volvo Group facility to test complete fuel cell units.

MIDSTREAM 26 Energy Industries Council (EIC) LNG and energy transition: bridging the gap to a low-carbon reality. As countries worldwide set bold CO2 reduction targets, LNG today has demonstrated to be a go-to opportunity for ensuring a cleaner and more affordable energy supply. It will possibly be a key enabler of the energy transition. 32 Joel Moxley ESG reporting template tailored for midstream companies When it comes to ESG reporting, one size does not fit all. That fact led GPA Midstream to join forces with the Energy Infrastructure Council (EIC) to create a template for reporting environmental, social, and governance data. What elements does this template include?

Table of Contents

Energy Capital Magazine

38 Sam Thigpen Natural Gas Infrastructure Alternates in North America The natural gas delivery infrastructure is constantly operating at maximum capacity in many places across the U.S. What to do since as our rural areas develop, our cities expand, and our need for clean, low-cost energy increases, our infrastructure cannot keep up?

UPSTREAM 44 Paola Leon The need to maximize steam quality to improve thermal enhanced oil recovery It is time to consider how steam can help you improve your well's profitability. Steam quality plays a vital role in heat transfer during steam injection Thermal Enhanced Oil Recovery (TEOR) processes - and thus, in their operational efficiency.

POWER 50 Gustavo Occhiuzzo EVCS' Case for Renewable Energy Powered EV Charging Stations Although the push for the adoption of EVs is set to significantly reduce the number of emissions from traditional, fossilfuel-powered vehicles, other factors must be considered to ensure that this shift doesn't result in trading out one negative consequence for another.

INFRASTRUCTURE 56 Felipe Sanchez Technology, paving the way for clean energy Erco integrates technology in all its 4

processes. It developed a simple yet sophisticated solution (Neu) to enable users to monitor and control their energy consumption in as much detail as they'd like. Learn more about it! 60 Craig Heilman Energy Independence, Innovation and Infrastructure — the Imperative for Investments and Regulatory Evolution In the U.S., independence is an identity and a prized possession cherished by individuals and the citizenry. Accordingly, meeting energy independence will require five big "I" s. Discover what they will mean. 68 Brian Conway 30 Minutes or Less In the year 2021, the problem of demand from our distribution systems far exceeding their current capacities has returned with a vengeance. Now, as we attempt to accommodate the EV revolution, we must find a completely new and different solution.

WOMEN IN ENERGY 72 Tara Meek Your Network is Your Networth Connecting women in the energy sector What is the importance of opening more spaces for women in energy to connect? What are the benefits of networking, and particularly, of networking as a woman in this sector? Learn more about this in this interview!

INTERVIEW 78 Hillary Holmes Preferred equity and ESG: crucial in capital raising for the energy industry In interview with Energy Capital, Hillary Holmes, partner at Gibson Dunn & Crutcher, talks with us about the value of preferred equity in the energy industry and the increasing role of ESG in capital raising for the sector.

DOING BUSINESS 84 Megan O'Connor The Clean Solution to our Critical Mineral Supply Problem There are a couple of dirty little secrets in clean energy. If we're not able to solve these challenges, it could derail the growth of clean energy and undercut many of its benefits. Nth Cycle offers a unique mineral recycling technology for such purposes… 90 Energy Capital An increasingly contested landscape for pipelines: what to do? Pipeline infrastructure for energy activities in North America has been crucial for decades. However, the challenges and disadvantages of pipeline infrastructure have been evident over the years. How is the energy industry navigating and leveraging future business opportunities under these circumstances?

Contact Information MANAGERS Rubi Alvarado General Manager Aldo Santillan Managing Director & Editor in Chief Noe H. Saenz Editorial Board Chairman DESIGN Gonzalo Rivas Ignacio Ortiz Senior Designer Art Director Cristian Martinez Digital Strategy

Ivan Ledezma Digital Strategy

EDITORIAL STAFF Eduardo Medina Ana Tafoya Editorial Analysis Editorial Team Coordinator EDITORIAL BOARD Todd C. Frank Christine Spiro Member (Burns Member (Our & McDonnell) Energy Manager) Energy Capital The Magazine is published by Capital Media Group LLC © 2020. All rights reserved. Digitalized and distributed by Capital Media Group LLC. We accept no responsibility in respect of opinions, products or services obtained through advertisements carried in this magazine. www.energycapitalmedia.com

Editorial Letter

Shielding Midstream: A Call from the Future's Energy Needs

rom weatherization to cybersecurity, from leak detection to decarbonization, this industry has significant challenges and opportunities to grow. There's no doubt that the role of the midstream in the energy transition will be crucial in addressing the world's energy needs. Therefore, its energy infrastructure will certainly become overarching in transporting the fuels of the future (LNG, biofuels, hydrogen!). Strategically shielding midstream is critical not only in transporting and delivering the needed amounts of energy our economy will need but also in achieving it in sustainable and resilient ways.

Are you noticing how midstream infrastructure is increasingly making the headlines? Dear Reader It's our pleasure to welcome you to a new issue of ENERGY CAPITAL THE MAGAZINE. In this edition (September-October), we've focused on bringing you the most exciting stories about what's happening in the North American energy sector. Specifically, our aim in this issue was to share with you what are the new trends, learned lessons, and key stories surrounding the oil and gas midstream industry.

Recent events have drawn international attention to this particular industry. The February pipeline freeze in Texas, the Colonial Pipeline hack in May, the cancellation of the mega intrastate and regional Keystone XL Pipeline project, or the increasingly frequent proposals by pipeline giants to decarbonize their operations. These are just a few examples of the great movements that the industry has experienced throughout this year. Notably, the events mentioned above not only evidenced challenges to overcome for

developers and operators of midstream infrastructure. They also made it clear that the concern generated around them only reflects how vital this industry is for our day-to-day development. It is not that the effects on other industries are less relevant or problematic than those that affect the midstream. However, it is inevitable to see that this particular sector will gain crucial relevance in the near future.

is preparing to navigate the energy revolution, the development of ESG standardization in the sector, the importance of protection technology against potential hacks and cyber threats, as well as the qualities of the pipeline projects that, despite the recent wave of cancellations, still stand. It's not just the midstream industry that has exciting stories to tell. We also include collaborations from energy experts addressing energy efficiency as a service, the latest in electric car charging technology, the benefits of preferred

According to specialized projections, the world will need an infrastructure robust enough to transport the fuels that will meet our energy needs, mainly natural gas, liquefied natural gas, biofuels, and hydrogen (potentially blue and green), among others. That is why in this issue, we include stories about how the midstream industry

equity in capital raising for oil and gas, the benefits of networking for women in the sector, or the innovative technologies for the decentralization of recycling of essential metals. We hope you enjoy this issue of Energy Capital as much as we enjoy working on it. Sincerely, The Energy Capital Team 7

Opinion

Navigating climate change consequences through a weatherization/winterization/ insulation strategy

By Rubi Alvarado General Manager, Energy Capital Magazine

older and warmer temperatures, increased incidence of wildfires, sea-level rise, and severe weather events are among the many factors affecting energy infrastructure’s safety. With the growing and evolving effects of climate change becoming more evident, many energy operators, developers, and users are wondering what they need to do to keep their assets safe, resilient, and reliable.

The answer many are finding? Weatherize, winterize, insulate! Recent events show us the relevance of such considerations. Last February’s Texas freeze left millions without access to electricity and 8

reliable sources of heating. With the freezing temperatures in the state earlier this year, Texas wasn’t prepared to protect its critical infrastructure from freezing out. According to the Center for Energy Studies, Baker Institute, “lax regulation [in the state] exposed producers—and their customers—to catastrophic failure.” Besides, the center noted that “the competitive nature of Texas’ deregulated power market discourages the added cost of winterization.” Another example illustrating how imperative it is to enact regulations in the industry further is the increasing incidence of devastating wildfires in California. One crucial consideration, in this case, is that not only are wildfires affecting utility and oil and gas infrastructure, but that infrastructure could also generate these catastrophic events. Summarizing, as experts in Politico recently wrote, “Texas and California may be worlds apart in their politics and climate policies, but they have something in common: extreme weather crashed their power grids and left people stranded in the dark.” However, the involved parties [companies, organizations, and regulators] are already tackling these challenges. For instance, in June, Texas regulators passed reforms (Senate Bill 3) to bolster the state’s electricity infrastructure and require power plants to prepare for extreme weather

conditions. These measures resulted from Governor Greg Abbot’s call to legislators for mandatory winterization of power plants. Similarly, lawmakers in California are incentivizing the construction of new clean energy infrastructure to reduce the harms of climate change produced by fossil fuels and providing incentives to maintain these new assets reliable, sustainable and resilient in the face of climate disasters, including severe wildfires.

But what does prepare your energy infrastructure for these challenges mean? On the weatherization field, professionally trained weatherization crews use computerized energy assessments and advanced diagnostic equipment (blower doors, manometers, and infrared cameras) to create a comprehensive analysis of the infrastructure. Besides, they determine the most cost-effective measures appropriate to identify any health and safety concerns. Weatherization providers also thoroughly inspect assets to ensure safety and prevent energy waste. Similarly, infrastructure insulation services providers are increasingly providing thermal, impact, fire, and even acoustic insulation to energy users. Whether it is for the transportation of natural gas, fuels, and LNG, or to keep coal-fired, nuclear, or combined-cycle facilities safe, industrial insulation has opportunity windows to grow its footprint. Although this transformation will probably require high costs, the benefits in the long term will be many. Providing reliable, resilient, and sustainable solutions is now imperative in the energy sector. Considering this, weatherization, insulation, and winterization will definitely have an essential place in the years to come. 9

Opinion

Automation, a leading enabler of the energy transition

By Aldo Santillan Managing Director and Editor in Chief, Energy Capital Magazine

utomation technology coordinates different systems and industrial platforms so they can act as a whole unified entity; it allows self-acting and self-regulating processes of industrial technology, thus enabling much greater performance in every industry. Particularly in the energy sector, automation consolidates IT operations and minimizes the amount of manual intervention, increasing safety. Besides,

it decreases output gaps and allows deep and thorough data analysis to make better and faster decisions. As the energy industry transitions from hydrocarbons to cleaner energy sources, operators require a solid economic ground and a level of certainty to execute changes. Considering that oil and gas will continue to play an essential role in the energy mix -even in the most aggressive transitioning scenarios- efficiency, safety, and quicker returns are critical to reducing the gap

from hydrocarbons to greener sources. How do companies get into that position from where to launch innovation? With automation technologies. Automation allows companies to increase resilience and sustainability, as it helps reducing failures in their operations. Notably, digital tools and software are providing this value to energy operators worldwide. In addition, the pandemic has pushed companies to reduce personnel on critical tasks such as maintenance and security; with technologies like augmented reality and remote performance monitoring, corporations can boost their performance while keeping personnel safe. In turn, that change increases competitiveness, thus putting automation and digitalization at the forefront of companies’ growth strategies. During the Offshore Technology Conference (OTC) 2021, executives discussed how automation and digitalization can significantly help in various areas. Maria Bulakh, Specialist Subsea Systems & Digitalization with Aker Solutions, said in that regard, “Data integration and automation enables the betterment of all industrial processes, adjusts executions, and enables greater and faster returns. Also, through the use of data, an operator can unlock new focus areas and take decisions; however, only 7% of oil executives have realized this huge potential.” As investors, stakeholders, and public opinion demand evident and tracible

sustainability and ESG agendas from energy companies, automation becomes one of the critical enablers for such transition. “Automation and Big Data connect workers that not necessarily are fisically close; it integrates the value chain and enhances asset design, which in turn delivers faster and greater efficiencies, both in operations and in financials,” Bulakh remarked. Consequently, automation processes must be fully integrated into the energy assets from ground zero -such as design- to construction, operations, and maintenance. It creates a virtuous cycle that increases gains, both in financial and environmental aspects. Finally, and particularly for drilling activities, automation and digitalization processes allow companies to secure investment and maybe even the whole future of a specific project. Arno Van Den Haak, Head of Worldwide Business Development Energy for Amazon Web Services, discussed during the OTC event how the implementation of automation technologies can triple the gains of an oilfield without jeopardizing the safety much needed in subsea operations. A clear example of this could be bp’s Atlantis oilfield in the Gulf of Mexico. Through the use of digital and automation tools, the company has managed to deliver cleaner and higher-quality hydrocarbons, maximizing profits and supporting the company on its energy transition pathway.

Opinion

The key to success in managing Energy Projects: Communication Among Stakeholders

By Noe’ H. Saenz Energy Capital’s Editorial Board Chairman

nergy projects are long-term investments with the purpose of building new energy infrastructure assets such as oil & gas platforms, processing plants, chemical plants, solar farms, etc. These projects involve multiple disciplines for their planning, financing, engineering, procurement, construction, commissioning, and startup activities. They also require large amounts of resources (financial, labor, materials, technology) to develop, improve, or maintain. Managing energy projects is extremely complex. Mainly because many people of multiple disciplines, from many different organizations, multiple locations, and different ways of doing things, must come together in a very short time to plan and manage these multi-million-dollar initiatives. The key to success in managing energy projects is communication. Not communication systems or procedures only, but communication among stakeholders -with a people focus. 12

Today’s project management teams must make sure to identify and engage all project stakeholders (internal and external) early, so they can understand their expectations and concerns and make sure they are aligned with the project objectives. And to do this, they must communicate and connect as people, not just based on reports and emails. Who are the typical stakeholders of an energy project? Internal Stakeholders: an individual or group of people who are involved in the project from within your organization. And external stakeholders: those affected by the project’s outcome even though they are not involved in the project directly. Here is a high-level checklist of stakeholders you need to consider in your project planning and communication efforts. From this list, a well-defined and updated RACI (Responsible, Approve, Consult, Inform) Chart will be your best friend. Types of organizations Owners Partners Lenders Market Consultants Business Consultants Technical Consultants Technology Providers/ OEMs

Contractors Landowners Local Communities Federal Agencies State Agencies NGOs Trade Associations Research Institutes Educational Institutions

Business disciplines Business Management Marketing & Sales Legal Insurance Finance Accounting & Tax Human Resources IT/Telecom Systems Real Estate

Project disciplines Project Management Civil / Structural Mechanical Electrical Chemical Environmental/Water Instrumentation Construction Management Startup & Commissioning

Site disciplines Site Supervision Health & Safety Masonry Steel Work Carpentry Pipefitting Millwrighting Electricity IT/Telecom Systems

Successful energy projects are those that implement not only a good project plan, but they communicate it (the project plan) on an ongoing basis alongside a people plan. I call this Managing Projects with a People Campaign approach, one that enables good stakeholder communication and relations throughout the project. Noe H. Saenz is Energy Capital’s Editorial Board Chairman 13

Analysis

Shielding Midstream: Towards a New Paradigm for O&G operators

ithout a doubt, the oil and gas infrastructure is very critical. Specifically, the midstream infrastructure is vital, as it functions as a bridge between upstream exploration and drilling activities and the distribution and sale of downstream petroleum products. In between, the midstream infrastructure not only transports oil and gas but enables the communication between the two above and supports their functions. In North America, midstream is, in fact, a key enabler of most of the oil and gas market. For example, in Canada, 97% of oil and petroleum products are transported through pipelines. Similarly, about 2.7 million miles of pipelines transfer oil and other petroleum products to different locations daily in the US. As technology makes its way into industry and digitization and automation systems become more relevant to O&G infrastructure, security becomes paramount. The digital revolution strengthens operations by enabling the integration of industrial technologies on unique platforms. However, digital assets are still 15

Analysis

exposed, as networks and controls extend far beyond the infrastructure itself. Cybersecurity experts call this the 'attack surface.' Underlying this vulnerability are digital systems companies, or third parties, that require access to their partners' networks to monitor machinery and diagnose performance. This is how cyber-threats can affect a system; infecting your digital structure or hitting third parties, and hacking your remote access. Many of these threats come from criminal companies or so-called hacktivists with specific political agendas. Furthermore, hackers and their tools are becoming increasingly sophisticated as they diversify their methods, take advantage of any cybersecurity breach, technical vulnerability, or human error, and exploit it. Unfortunately, the growing trend of digitization in the oil and gas industry has outpaced the deployment of robust and resilient cybersecurity safeguards. To provide a quick example on this topic, in 2019, hackers attacked Petróleos Mexicanos, the Mexican state oil company. They forced it to shut down numerous computers and systems across the country and demanded a payment of $ 5 million in bitcoins to free the affected systems. In response, the company refused, quarantined its systems, and cleaned them up. Although not disastrous, the attack was disturbing and demonstrated the ability of hackers to penetrate the cybersecurity systems of large oil companies. Also, not too long ago, in May, America's largest midstream asset was attacked. The Colonial Pipeline, a system of two 8,850-kilometer pipes that transport about 3 million barrels of fuel a day between Texas and New York, was the victim. The attack triggered a severe energy 16

crisis and resulted in gasoline shortages and gasoline prices around $ 3 a gallon. In fact, according to a Bloomberg report, the hackers used a compromised VPN password that did not require multifactor authentication, allowing the hackers to access the Colonial network. It is unclear whether the hackers discovered the username or could figure it out independently; however, the password was found among a batch of them leaked on the dark web. The breach occurred on April 29, according to cybersecurity company Mandiant, and was discovered on May 7 by an employee who saw the ransom note. Soon after, the company reported the breach and pulled the pipeline of operations to prevent the attack from spreading to other critical systems. Despite the advice of US officials, the company paid the ransom request, about $ 5 million. However, nearly half of the fuel that commonly enters the eastern US states was affected or virtually disappeared for a few days. Shortly after, Scott Jones, director of the Canadian Center for Cyber Security, spoke about the urgency for Canada to take cybersecurity measures and published a report on the landscape of potential threats to the country. The report noted that three Ontario hospitals and a Canadian diagnostic company fell victim to ransomware attacks in late 2019, as well as a medical company in Saskatchewan in early 2020. 17

Analysis

Additionally, according to a report by The Conversation, Canada is delayed in not accepting reports of third-party cybersecurity vulnerabilities. In fact, Canada has not experienced an attack like the Colonial Pipeline. Still, many Canadians remember the Equifax breach in 2017, when around 19,000 citizens were affected by an attack on an online customer portal. This is why cybersecurity has become increasingly relevant, especially in O&G infrastructure. If breached anywhere in the value stream, an attack can severely disrupt operations, causing substantial cost spikes. Another concern is that many breaches go undetected as they occur, leaving intruders and criminals with more time to carry out their crimes and explore more vulnerabilities. In fact, according to the Ponemon Institute, the average time it takes for US companies to detect and contain a data breach is about 245 days, with a relative cost of $ 8.2 million. As a result of all this, and especially after the Colonial Pipeline hack, the United States government, through the Department of Homeland Security, issued a new agenda for the owners and operators of critical pipelines that transport dangerous liquids and natural gas; the issue urged them to adopt "new and urgent protections against cyber intruders." One of those protections is the immediate report of a cybersecurity incident to the Cybersecurity and Infrastructure Security Agency (CISA); appoint a cybersecurity coordinator who is available to the Agency at all times; and conduct internal security assessments to report results no later than May 28, 2022. Some of the incidents that owners and operators must report are 1) unauthorized access to information systems or operational technology, 18

including non-malicious policy violations such as the use of shared credentials by employees; 2) discovery of malicious software in an information or operational technology system; 3) activity that results in a denial of service to any information system or operating technology; 4) a physical attack against the network infrastructure, and 5) "any other cybersecurity incident that results in an operational disruption." These measures, among others required by the new plan, are intended to create a cybersecurity standard for companies; and culture of cybersecurity. Additionally, Congress is currently considering several laws that would make significant changes to the current landscape of energy cybersecurity, including measures to coordinate

pipeline safety regulation among the various agencies that presently exercise authority over pipeline operations. All of the above are urgent and much-needed regulations for large companies and operators of "critical pipeline assets." But what about the smaller midstream companies? Are they as vulnerable as their counterparts? Well, the Jones Walker Midstream Oil and Gas Cybersecurity Survey, conducted in October 2020, found that smaller companies are particularly vulnerable to cyberattacks, as smaller companies often do not have adequate breach response plans or robust cybersecurity systems. Consequently, some of the critical points that a smaller midstream corporation needs to attend are: • Avoiding overconfidence: the survey showed that most respondents believe that both the midstream sector and their own companies are prepared for a cyber-attack; also, more than one in 10 suffered a successful breach. • Know where the threats are coming from: survey respondents pointed to organized criminal groups as the top threat actors and their own employees' negligence as a source of significant concern. • Partnering as a defense strategy: Many companies work in isolation and do not take advantage of opportunities and cost efficiencies offered through industry collaboration and public-private partnerships. Along the same lines, Siemens published a white paper in which it extracted some valuable advice for companies to start addressing their

cybersecurity weaknesses. The company highlights that cybersecurity is often seen as a lower-level structural concern. Consequently, a "blind spot" is created, an area where the eyes of operators or stakeholders do not look at all. Breaking that blind spot would be the first step in creating a culture of cybersecurity, a new paradigm in which companies operate more securely. The company offers some tips: • Recognize potential breaches; educate employees on the importance of authentications and credentials. • Assess and plan: an assessment of the cybersecurity status of the corporation or any particular O&G asset must be inventoried; potential threats should be documented and researched. Compile a risk-ranked list of all threats and plan on how to address them. • Detect and respond: once the breaches are on the list, react to them and take corporate actions to crush them; work on timely and relevant response, designing roles and groups to address a potential threat or even an attack. Finally, with these tools, midstream operators can harden their assets and corporations from any cyber threats; a regular practice for the future would be software patch management and malware protection. In case of enduring an attack, a postdisaster recovery data system could restore corrupt or lost information. However, many of these tools require education, a learning curve, and strong leadership. That's why right now is the perfect time to get started on closing that blind spot. Cyber threats are only growing in sophistication, frequency, and severity. Therefore, to achieve genuinely shielded midstream operators, stakeholders, employees, all parties must participate and get involved. 19

Analysis

Volvo Construction Equipment Fuel Test Lab – Advancing Research and Development By Volvo Construction Equipment (Volvo CE) www.volvoce.com

n interview with Energy Capital, the Fuel Cell Test Lab Team, part of the larger Volvo Construction Equipment (Volvo CE) Team, talks with us about this innovative hydrogen fuelcell laboratory located in Eskilstuna, Sweden. Launched in May 2021, this facility is expected to help the company reach its commitment to the Science-Based Targets initiative. Moreover, this dedicated lab is also the first facility in Volvo Group to be testing complete fuel cell units, and will as such be a strong contributor to the company’s dedication to fuel cell technology. EC - Will Volvo CE connect the Fuel Cell Test Lab to the company’s production processes? Volvo CE - Our primary focus for the Fuel Cell Test lab is for research and development, so there are no current plans to connect it to our production processes. At this stage our ambition is to understand how to design a fuel cell system in an optimal way dependent on various use applications, considering component characteristics and relevant duty cycles. EC - How will the cell lab evaluate test fuel cell solutions to further expand its applications for heavy construction equipment and others? Volvo CE - The work we carry out inside the fuel cell test lab is a variety of simulations that test the way a complete fuel cell system operates under any given circumstance. Through these simulations, we optimize the system for any given duty cycle and application, which will in turn allow us to understand the best possible usage of fuel cell solutions in relevant construction machines. 21

Analysis

EC - What will its research mean in terms of cleaner hydrogen production, distribution, and affordability? Volvo CE - At this stage, there is no direct connection between this test lab and the eventual production, distribution and cost of hydrogen. There will be an indirect connection of course as a broader usage of fuel cell technology will drive both production, distribution and cost. EC - Could you tell us about the new Volvo CE’s Fuel Cell Lab? Volvo CE - The fuel cell test lab is located at the Volvo CE Technical Center in Eskilstuna, Sweden and represents a big step forward in the company’s commitment to hydrogen. The lab is also the first facility in Volvo Group to be testing complete fuel cell units, and will as such be a strong contributor to the company’s dedication to fuel cell technology and serve Volvo Group globally. The lab, run by dedicated technicians, offers us the perfect conditions in which to explore the potential for hydrogen fuel cell technology in our heavier construction equipment. EC - Are there any other initiatives that Volvo is undertaking towards promoting hydrogen use in the transportation and heavy construction sector? Could you tell us about them? (for instance, CELLCENTRIC, a joint venture by Volvo Group and Daimler Truck). Volvo CE - CELLCENTRIC is a new joint venture between Volvo Group and Daimler Trucks to accelerate the development, production and 23

Analysis

commercialization of fuel cell systems for use in long-haul trucking and other applications, such as construction equipment. As a 50-50 partnership, both manufacturers own equal interests but will continue to be competitors in areas such as vehicle technology and fuel cell integration in products. Because Volvo Group is a family, we are lucky to benefit from and share knowledge and expertise across the Group. Volvo Group has also recently announced a partnership with steel manufacturer Ovako to use its surplus hydrogen produced during their manufacturing processes to be repurposed as a clean energy source for the Group’s hydrogen fuel cell solutions when commercially available.

EC - Why did Volvo consider it important to commit to the Science Based Targets Initiative? What does this commitment mean in terms of net-zero emissions goals for the company? Volvo CE - The Science Based Targets initiative (SBTi) is one of the biggest undertakings for us as a company as it requires all of us to work together in partnership. This is a truly holistic, cross- functional commitment where we will see every area of our business working collectively to achieve these goals. But we also see it as just one of the many tools we have to hand to help us reduce our carbon impact.

We are making this commitment now because we believe the time is for action, not words – and the roadmap needs to be put in place today to reduce our carbon impact for tomorrow. Volvo CE, as part of Volvo Group, has committed to achieving net-zero value chain greenhouse gas emissions by 2040 at the latest – 10 years earlier than the SBTi commitment. This is because Volvo products have an average lifetime of 10 years in the customer use-phase, so for the entire rolling fleet to have net-zero emissions by 2050, it is necessary that all products delivered after 2040 have net-zero emissions. Volvo CE has also set its own target, separate from other business areas within Volvo Group to

limit global warming for the use of its products, whose direct emissions account for the highest proportion of the company’s carbon emissions, to well below 20C above pre-industrial levels – in line with what the latest climate science deems necessary as part of the Paris Agreement. A separate ambition to limit global warming to 1.50C has been set for its operations, facilities and manufacturing processes. EC - Besides hydrogen fuel cell development, what is Volvo doing to advance electromobility solutions further? Volvo CE - Hydrogen fuel cell development is one key part of our electromobility strategy – running parallel to our ongoing development of battery electric solutions and more sustainable internal combustion engines. We believe we need all three if we are to achieve net zero value chain greenhouse gas emissions across the varied needs and applications of our construction machines, as we cannot take a one size fits all approach. We have not only brought to market electric solutions in our compact range – the L25 Electric compact loader and ECR25 Electric compact excavator – but are also testing a mid-size battery electric construction machine, the EC230 Electric, with our customers for eventual commercialization. The larger end of the scale, within our heavier construction equipment, is where we see hydrogen fuel cell technology put to best use. In addition, we have also expanded our unique hybrid technology across a range of different construction machines, helping to boost fuel efficiency by 17%, and developed grid-connected electric excavator prototypes which operate the same as a conventional Volvo machine but which emit no carbon when plugged into the grid. 25

Midstream

LNG and energy transition: bridging the gap to a low-carbon reality

In July 2019, as the Golar Freeze LNG floating storage and regasification (FSRU) vessel was unveiled at Old Harbour in Jamaica, Prime Minister Andrew Holness praised the project’s importance for achieving the country’s goal of having at least 50% of its electricity generation from renewables or cleaner fuels. By Energy Industries Council (EIC) https://www.the-eic.com/

imilar stories have unfolded from the Caribbean to Southeast Asia, demonstrating how liquefied natural gas (LNG) plays a pivotal role in replacing more pollutant sources of energy with cleaner natural gas. As countries around the world set bold CO2 reduction targets, LNG today has demonstrated to be a go-to opportunity for ensuring cleaner and more affordable energy supply.

Midstream

A transition fuel Indeed, natural gas is often mentioned as a ‘bridge’ fuel in the context of energy transition, as it represents a cleaner alternative compared to other fossil-fuel sources such as coal and oil. The use of natural gas in thermal power generation has played a key role in making energy matrixes less carbon intense as it replaces coal- and dieselfired turbines. CO2 emissions from natural gas combustion are approximately 40% lower than that of coal and 20% lower than oil combustion emissions. 28

While natural gas combustion yields significant amounts of nitrogen oxides (with gas being responsible for 10% of global NOx emissions), its sulphur dioxides and fine particular matter emissions are considerably lower compared to coal and oil products. Natural gas, when used in conjunction with steam turbines in a combined cycle setup, also allows more efficiency for power generation and contributes to energy security by providing baseload capacity. Moreover, the role of natural gas as an energy transition fuel is further evidenced when

Midstream

ENERGY ANALYSTS AGREE THAT NATURAL GAS DEMAND WILL REMAIN RESILIENT IN THE SHORT TO MEDIUM TERM, WITH LNG PLAYING A KEY ROLE WHEN IT COMES TO SUPPORTING DECARBONIZATION STRATEGIES ACROSS THE WORLD. HOWEVER, AS A NUMBER OF COUNTRIES PUSH FORWARD WITH THEIR ENERGY TRANSITION PLANS AND NETZERO TARGETS, LNG SHIPMENTS WITH A LOWER CARBON FOOTPRINT WILL BE BETTER POSITIONED IN KEY DEMAND CENTERS.

considering the challenges of rapidly scaling up renewable sources of power.

Bridging the gap to decarbonization In the context of LNG-driven energy transition, China stands out as a major player. The country is set to overtake Japan to become the largest LNG importer in 2021, supported by growing electricity consumption. China has pursued a policy of displacing coal-fired power generation with gas-fired power plants, encouraging 29

Midstream

Key LNG projects

domestic gas consumption and boosting the construction of LNG import infrastructure. There are significant LNG stories beyond China. In Brazil, as droughts impact the output of numerous hydro power plants in the country, gas-fired power plants linked to LNG regasification terminals are playing an essential role in ensuring energy security by providing baseload generation capacity. Meanwhile in Thailand, the country has recently announced it will scrap plans to build 3GW of coal-fired power capacity in favour of two 700MW gas-fired plants fed by LNG imports. Looking beyond power generation, LNG has a major role to play in decarbonizing the marine fuels segment while green hydrogen scales up. LNG is also an attractive alternative to oil products for road transport vehicles due to lower CO2 emissions. 30

An array of LNG projects has been announced or are currently under development across the globe. EICDataStream, the EIC’s global projects tracking database, currently monitors 296 liquefaction and regasification projects worldwide, requiring a combined investment of US$825bn. The US market leads in terms of LNGrelated capital expenditure projects, capturing close to US$250bn of the global investment with a planned addition of 377mtpa of liquefaction capacity by the end of the decade. Highlights include the US$24.7bn Driftwood LNG project in Louisiana as well as Sempra’s US$10bn Port Arthur LNG terminal in Texas. A final investment decision (FID) for the two projects is expected to be announced in 2022. Looking at the regasification segment, Asian countries present a robust pipeline of onshore LNG receiving terminals as well as FSRU projects. Vietnam is a notable example, with 11 such projects totalling an investment of US$24.7bn. As previously noted, China is another key LNG regasification market, with a US$12.7bn project pipeline.

Looking ahead Energy analysts agree that natural gas demand will remain resilient in the short to medium term, with LNG playing a key role when it comes to supporting decarbonisation strategies across the world. However, as a number of countries push forward with

Midstream

their energy transition plans and net zero targets, LNG shipments with a lower carbon footprint will be better positioned in key demand centres. Indeed, LNG exporters able to cut emissions from natural gas exploration and production, processing and transport are poised to gain advantage vis-à-vis more carbon-intense competitors. Carbon-neutral LNG cargoes are already a reality: since 2019 there have been approximately 15 such shipments, with key players such as Shell, Total and Gazprom leading the way. In summary, LNG is a key pillar for energy transition and, alongside renewables, will continue to be a critical alternative in the coming years for countries moving to a more secure, affordable and sustainable energy matrix.

Midstream

ESG reporting template tailored for midstream companies When it comes to ESG reporting, one size does not fit all.

By Joel Moxley CEO GPA Midstream Association

hen it comes to ESG reporting, one size does not fit all.Gas marketers delivering into Mexico reported 516 transactions in January and February versus 611 for the same two months of 2020, right before the first coronavirus case was reported in the country. This according to data available from energy regulator CRE. That fact led GPA Midstream to join forces with the Energy Infrastructure Council (EIC) to create a template for reporting environmental, social and governance data. It was a year-long 33

Midstream

process to ensure the template would provide the transparency and relevance to all midstream stakeholders. The industry looked to what data was most material to collect from firms in midstream, which is a diverse sector. For example, an ESG report by a tech company such as Google or Facebook would look different from a manufacturer. Even within the energy industry, relevant ESG data sets would look different for a midstream company than they would for a producer or refiner. In addition, midstream companies represent a lot of operational diversity … some focus primarily on natural gas, some concentrate on crude oil, and some provide services along the full value stream from the wellhead to markets. Likewise, large and small companies have different reporting needs. The template, released in December, allows all stakeholders (investors, ratings agencies, customers, employees, et al) to see a consistent set of ESG metrics for midstream companies. GPA Midstream and EIC have significant overlap in our respective memberships, and each organization brought special expertise to the process, including EIC tapping member financial firms for their knowledge. We are celebrating GPA Midstream’s 100th anniversary this year, and that history brought to the table a vast depository of long-term technical expertise. The development of the template was a collaborative process that balanced input from financial institutions that are using ESG data to evaluate companies’ performance with midstream companies’ detailed knowledge of the data that was relevant to provide an overview of their operations. It’s a midstream ESG template developed by midstream experts, which sets it apart from other reporting platforms created by third parties that span the entire energy space. 35

Midstream

By February of this year, several of our member companies had completed their early adoption of the ESG template, including Crestwood, Enterprise Products, ONEOK, Western Midstream and Williams.Following soon after were DCP Midstream, Energy Transfer and Plains All American. The leadership of these early adopters will ensure widespread use of the tool as a standard for transparency and disclosure. The quantitative and comparable metrics for the midstream industry will prove useful for stakeholders, policymakers and ratings agencies in the future. The U.S. Securities and Exchange Commission (SEC) recently requested comments regarding increased climate disclosures for public companies. Both

GPA Midstream and EIC were able to point out the template as an example of midstream industry leading the way in this important area. While there is a lot of focus on the environmental and social parts of the reporting for investors and regulators, the governance piece of the ESG journey is equally important, especially to employees and prospective hires. Employees want to know there is an inclusive workforce and boardroom in companies they are going to work for.

Version 1.0 of the template includes data gathered from 2020 and asks for 2019 and 2018 information for comparison. Version 2.0 is in the works now as member companies progress on the ESG journey. Additional versions are highly likely in the coming years as things evolve in that space. For example, climate disclosures are a relatively new field, and companies are developing expertise in that area. There are certain to be additions and subtractions in the future because we acknowledge that this is an ongoing process. Our ultimate goal is to ensure that this template remains the primary midstream ESG reporting channel and remains relevant to all stakeholders, so we’ll continue to make this a priority.

Midstream

Natural Gas Infrastructure Alternates in North America The natural gas delivery infrastructure is constantly operating at maximum capacity in many places across the United States. As our rural areas develop, our cities expand, and our need for clean, low-cost energy increases, our infrastructure cannot keep up.

By Sam Thigpen, CEO-Sapphire Gas Solutions 38

Midstream

agging infrastructure is a reality across our country, and natural gas consumers should know there is an alternative. Mobile pipeline solutions have been providing reliable gas delivery for decades and are growing in effectiveness for many utilities around the country. In the northeast, gas utility companies utilize compressed natural gas to deliver supplemental gas supply to residential and industrial end-users on Long Island and other parts of the New York metropolitan region. In the southeast, municipalities utilize both liquified and compressed natural gas to grow the local end-use customer base to justify the capital for constructing permanent gas pipeline infrastructure. Additionally, mining operations have found the delivery of compressed and liquid natural gas to their remote operations feasible where, traditionally, only diesel or propane was available. This new path reduces emissions while providing fuel pricing stability.

MORE AND MORE END-USERS AND NATURAL GAS SUPPLIERS REALIZE THIS MOBILE AND OFF-PIPE SOLUTIONS-BASED APPROACH CAN RELIABLY ENHANCE THEIR ENERGY RESILIENCY PLANNING. The list of uses for mobile and off-pipe solutions is endless. The support, or replacement, of the natural gas pipeline infrastructure will be a critical piece of the puzzle in managing the ever-growing energy needs of our country. With recent articles forecasting the end of the gas pipeline construction boom, there is no better way to keep up with an expanding customer base than virtual pipeline solutions. These solutions not only solve problems, but they open the door to expanded use of clean fuels and help lower emissions.

THE NATURAL GAS DELIVERY INFRASTRUCTURE IS CONSTANTLY OPERATING AT MAXIMUM CAPACITY IN MANY PLACES ACROSS THE UNITED STATES. AS OUR RURAL AREAS DEVELOP, OUR CITIES EXPAND, AND OUR NEED FOR CLEAN, LOW-COST ENERGY INCREASES, OUR INFRASTRUCTURE CANNOT KEEP UP.

Midstream

LAGGING INFRASTRUCTURE IS A REALITY ACROSS OUR COUNTRY, AND NATURAL GAS CONSUMERS SHOULD KNOW THERE IS AN ALTERNATIVE. MOBILE PIPELINE SOLUTIONS HAVE BEEN PROVIDING RELIABLE GAS DELIVERY FOR DECADES AND ARE GROWING IN EFFECTIVENESS FOR MANY UTILITIES AROUND THE COUNTRY.

In recent years, mobile equipment technology has improved to the point where transporting compressed natural gas (CNG), liquified natural gas (LNG), and Hydrogen is more efficient than ever before. Larger volume transports, more automated control systems, and enhanced safety features make this solution a genuine alternative to traditional pipeline construction. Residential and industrial customers utilizing propane are already familiar with the benefits of fuel delivery by truck. It has been a long-standing and accepted practice of delivering fuels. By expanding this methodology, end users can now select safer fuels with lower emissions, reduced carbon footprint, lower and more stable pricing such as CNG, LNG, or Hydrogen. Being lighter than air, all three of the fuels mentioned above provide a safer alternative to heavy, dirtier fuels such as diesel, propane, and waste oils. There is little to no potential for spills or ground contamination, and the risk is fire or explosion is

virtually non-existent, as proven by decades of testing. Additionally, today’s robust production of CNG, LNG, and Hydrogen provides a stable fuel supply on which end users can depend for their uninterruptible energy needs. More and more end-users and natural gas suppliers realize this mobile and off-pipe solutions-based approach can reliably enhance their energy resiliency planning. The ability to provide the primary fuel supply for large-scale needs without the need for pipeline infrastructure opens opportunities once thought to be unattainable. Although there is a general industry understanding that off-pipe and mobile energy supply can be more costly than traditional infrastructure, there are many cases where those increased costs are still reasonable compared to downtime and the inability to expand. Additionally, many industrial end-users may choose mobile, and off-pipe solutions for resiliency pricing constraints as the CapEx required to build back up or redundant energy supply infrastructure can be enormous. 43

Upstream

The need to maximize steam quality to improve thermal enhanced oil recovery It is time to consider how steam can help you improve your well’s profitability, because steam quality plays an important role in heat transfer during steam injection Thermal Enhanced Oil Recovery (TEOR) processes and thus, in their operational efficiency.

E By Paola Leon, Research and Development Advisor for Nakasawa Resources leonpaola@nakasawaresources.com

OR plays an increasingly important role in the industry, as much of the world’s oil is considered “heavy” or “extra-heavy,” meaning it is inaccessible without these solutions. Because steam quality can (in combination with the correct equipment) greatly improve the rate of oil recovery, lower operating costs, and reduce running time, it is an important - and often overlooked factor to consider. Steam is extremely important to TEOR, with cyclic steam injection being the most common method. In it, saturated steam is injected into the well continuously for a specified period to heat the oil immediately

Upstream

“EOR PLAYS AN INCREASINGLY IMPORTANT ROLE IN THE INDUSTRY, AS MUCH OF THE WORLD’S OIL IS CONSIDERED “HEAVY” OR “EXTRA-HEAVY,” MEANING IT IS INACCESSIBLE WITHOUT THESE SOLUTIONS.” 45

Upstream

around the well, reducing its viscosity. Once the target viscosity is reached, the steam injection is halted so the heat can spread evenly throughout the reservoir. This allows the oil to be extracted until the well temperature and oil production rate drop and the cycle begins anew.

Quality Steam, Quality Process Steam quality reflects the ratio of saturated steam (or vapor) in a saturated liquid/vapor mixture. If steam quality is 0%, then the mixture is 100% liquid, meaning it carries much less energy. If it is 100%, then the mixture is entirely vapor - making it much better for energy transfer. In short, steam quality directly impacts how much heat is transmitted, and thus the heat transfer process. 46

“THE OIL & GAS INDUSTRY IS ALWAYS INNOVATING, AND THIS IS NO LESS TRUE WHEN IT COMES TO STEAM QUALITY IMPROVEMENTS. NEW DEVICES ARE ALWAYS BEING DEVELOPED AND INTRODUCED TO MARKETS TO MAKE THE OIL RECOVERY PROCESS FASTER, LESS COSTLY, MORE ENVIRONMENTALLY FRIENDLY, AND MORE EFFICIENT.”

Upstream

This can have numerous effects, but one of the biggest and most important is on efficiency. All TEOR processes require steam quality to be above 80%, but this still leaves a 20-percentage point gap in quality (and thus efficiency) that can be at least partially closed. For example, steam quality can mean the difference between injecting steam for two months versus six weeks, saving that same two-week period each time the steam injection cycle begins again. This has a massive impact on the reservoir’s profitability, especially over time. Even high-quality steam requires further assistance to fully realize its benefits. However, if the pipes it travels through are not sufficiently insulated, for example, then 47

Upstream

“GIVEN THE GROWING NEED FOR HEAVY OIL EXTRACTION AND THE IMPORTANT ROLE OF TEOR, IT IS WELL PAST TIME FOR THE INDUSTRY TO RAISE ITS STEAM QUALITY STANDARDS.”

steam quality will quickly degrade, even if it began at 100%. It is vital to not only generate high-quality steam, but also maintain that quality to its destination with minimal losses.

How to Enhance Steam Quality The oil & gas industry is always innovating, and this is no less true when it comes to steam quality improvements. New devices are always being developed and introduced to markets to make the oil recovery process faster, less costly, more environmentally friendly, and more efficient. One way to overcome this challenge is through insulated steam transfer pipes. Traditionally, this was done with insulating materials or liquids, but vacuum-insulated pipes offer better heat preservation. For surface distances of up to

Upstream 3 kilometers, vacuum-insulated piping can reduce heat losses by up to 13%. One mathematical model found that vacuum insulation methods showed the smallest drop in steam quality from its generator to the well, with losses under 6% per 100m 1. But it is crucial to begin with high-quality steam to get the best results. There are solutions available that can deliver steam with a quality of 95% or higher, but even these are best when combined with careful insulation. When a high-quality steam generator produces steam close to 100% pure and injects it to the well through vacuum-insulated tubing, the operational results can be excellent. Some generation equipment, when paired with vacuum-insulation, can achieve an extra 12% injected heat, leading to an oil production increase of 15% or more, a 12% reduction in feedwater usage, significant steam-to-oil ratio (SOR) improvements, and a 25% decrease in operational costs on large-scale steam injection projects overall. All of these improvements can be realized through an increase in steam quality, because it directly correlates to the amount of energy transferred during the process. With the rising need to extract heavy and extra-heavy oil, relying on 80% quality steam becomes an increasing challenge to both operational costs and timelines. Given the growing need for heavy oil extraction and the important role of TEOR, it is well past time for the industry to raise its steam quality standards. It is only by starting with high-quality steam that companies can achieve the kind of cost-effective and highly efficient results they need to stay competitive in today’s world. 1 Guo Chunshenga, Qu Fangyia, Liu Yonga, Nian Xianboa, Chen Zianga, and Zou Yong. “Numerical Simulation of Steam Injection for Heavy Oil Thermal Recovery.” Elsevier Ltd., 2017.

Power

By Gustavo Occhiuzzo Co-founder and CEO, EVCS

EVCS’ Case for Renewable Energy Powered EV Charging Stations

Electric Vehicles, or EVs, have experienced a boom in popularity over recent years, with figures from Pew Research finding that the amount of EVs on the road in the United States has increased more than three-fold since 2016. The adoption of these vehicles is set to grow too, with a number of Federal and State initiatives pushing for the widespread adoption of EVs in an effort to combat climate change. 51

Power

lthough this push for adoption is set to greatly reduce the amount of emissions from traditional, fossilfuel powered vehicles, other factors must be taken into consideration to ensure that this shift doesn't result in trading out one negative consequence for another. Thus, the energy-cost of producing EVs and lithium-ion batteries is one aspect that receives a significant amount of attention. The other, while somewhat recognized, is the energy that powers these cars, which is directly linked to the power sources that charging station providers utilize at each of their sites. As it stands, and as verified by the most recent report from The California Energy Commission, the majority of power that runs through these charging stations still comes from non-renewable fuel sources. Although there is a marked difference in the number of emissions an EV produces when compared to combustion-engine vehicles, to be truly conscious of the environment alternative methods of powering charging stations with majority, if not 100 percent renewable energy must be identified and implemented. While many providers may still hold the notion that dirty energy is an unavoidable reality, at least for the time being, for the team at EVCS there is a workaround that enables providers to utilize 100% renewable energy at their sites. This means they're able to offer their customers a truly carbon-neutral way to charge their EVs, while also retaining fast-charging capabilities. Additionally, the workaround removes the requirement for installation of complicated and costly renewable energy generation systems, such as solar panels. Carbon credits are a key aspect of the EVCS 52

ALTHOUGH THE PUSH FOR EV ADOPTION IS SET TO GREATLY REDUCE THE AMOUNT OF EMISSIONS FROM TRADITIONAL, FOSSIL-FUEL POWERED VEHICLES, OTHER FACTORS MUST BE TAKEN INTO CONSIDERATION TO ENSURE THAT THIS SHIFT DOESN'T RESULT IN TRADING OUT ONE NEGATIVE CONSEQUENCE FOR ANOTHER.

renewable-powered system’s viability. Over the last two decades, carbon credits have become an important player in addressing emissions for big businesses. Companies like Google, Amazon, and IBM all purchase carbon credits to offset the massive emissions their operations release into the atmosphere every year. As it stands, the global carbon industry was last valued at $272 billion in 2020, the value of which is only set to grow as the impacts of climate change become more apparent. But what do these credits have to do with EV charging and renewable energy? It comes down to price. Costs associated with utilizing 100 percent renewable energy can be high, especially for businesses. This

Power

makes sense when the standard energy mix is considered, with averages on the grid usually sitting at a 70:30 ratio, where 70 percent of energy comes from fossil fuels, and the remaining 30 percent comes from carbonneutral sources. As such, sourcing energy solely from renewables comes with added costs. Although there’s not a lot that can be done about the price of sourcing this energy on the supplierside, costs can be heavily offset when carbon credits are brought into the picture. This is because, once a charging station provider is utilizing 100 percent renewable energy and receives accreditation from their governing body, they're able to generate carbon credits which can then be sold to offset the higher costs associated with purchasing renewable energy from a provider.

TO TRULY MAKE AN ENVIRONMENTAL IMPACT BOTH BUSINESSES AND CONSUMERS NEED TO ENSURE EVERY LINK OF THE CHAIN IS CONSIDERED.

Through doing so, not only are these EV charging stations able to ensure their customers are using a truly carbonneutral method of transport, but are also able to accelerate the offset of original energy costs from the manufacture of their vehicles. According to an article in the Wall Street Journal, this takes 20,000 miles of driving to break-even with a traditional, combustion-engine vehicle. Additionally, the use of only renewable energy and the subsequent offsets from the generation of carbon credits means that EV charging station

WHILE MANY PROVIDERS MAY STILL HOLD THE NOTION THAT DIRTY ENERGY IS AN UNAVOIDABLE REALITY, AT LEAST FOR THE TIME BEING, FOR THE TEAM AT EVCS THERE IS A WORKAROUND THAT ENABLES PROVIDERS TO UTILIZE 100% RENEWABLE ENERGY AT THEIR SITES.

providers can still provide energy at comparable if not lower - prices than stations powered using the standard energy supply. While the initial set-up of these systems is somewhat complicated and takes more administration than utilizing a standard power mix, the resulting environmental and financial benefits make it a viable option for all providers. Additionally, through implementing a cost-saving payment structure EV charging station businesses will likely be able to capture more customers by providing them unlimited guilt-free charging for their EVs at a low monthly cost.

To truly make an environmental impact both businesses and consumers need to ensure every link of the chain is considered. From production and operation to maintenance and charging, the EV industry can be a leader in showing the world how this is achievable through the smart utilization of renewable energy sources to generate carboncredits, while still offering EV drivers an affordable, carbon-neutral method of charging their vehicles.

Gustavo Occhiuzzo is the Co-founder and CEO of EVCS, one of the largest and fastest growing operators of electric vehicle fast charging stations on the West Coast.

Infrastructure

Technology, paving the way for clean energy

Erco Energy is a leading Tech Energy Company in Res Commercial, and Industrial markets. In 2012, we set way people move forward to the energy transition by reliable, and affordable renewable solutions for every exceptional service experience. We started impleme solar projects and after several years we evolved inc portfolio Energy Storage and Electric Mobility solutio currently operates in the United States, Panama, and

sidential, out to reinvent the y offering clean, yone through an enting photovoltaic cluding in our ons. Erco Energy d Colombia.

By Felipe Sánchez CEO, Erco Energy ercoenergy.us

Video Interview

e are innovative leaders in the designing and implementation of renewable projects, incorporating proprietary software and hardware to provide our customers with smart solutions, to maximize energy efficiency in their homes and businesses. In Erco we integrate technology in all our processes, creating through our tech-brand Neu a new concept to disrupt the energy market. We developed a simple yet sophisticated solution to enable our users to monitor and control their energy consumption in as much detail as they’d like. Our smart machine-learning technology provides realtime energy consumption, customizable smart push notifications, bill disaggregation, clean energy consumption, and safe energy transactions. These solutions translate into savings 18% on average in our customers' energy bills.

WE STARTED IMPLEMENTING PHOTOVOLTAIC SOLAR PROJECTS AND AFTER SEVERAL YEARS WE EVOLVED INCLUDING IN OUR PORTFOLIO ENERGY STORAGE AND ELECTRIC MOBILITY SOLUTIONS. 57

Infrastructure

We rebuilt the entire experience to make it easier, faster, and trustworthy, taking advantage of our top-notch technology and an exceptionally talented team. We are constantly striving to achieve a cleaner energy future and to leave an enduring mark through our lifelong customers. Erco has a ten (10) years track record of building a green future, +1,900 successfully completed projects and is empowering home and business owners to become energy-independent and save money while saving the planet. Our mission is to become one of the most trusted Energy Companies in Texas through our innovative and sustainable solutions. We are committed to advancing the implementation of clean energy systems and we will continue focusing on removing barriers to affordable and clean energy. This is why Erco doesn´t consider itself just another solar company, but rather an ecosystem

IN ERCO WE INTEGRATE TECHNOLOGY IN ALL OUR PROCESSES, CREATING THROUGH OUR TECH-BRAND NEU A NEW CONCEPT TO DISRUPT THE ENERGY MARKET.

where energy meets technology with a very clear purpose: lower electricity bills and build a more sustainable future; how? Contact us and let us show you a smarter and cleaner use of energy! We all have a role to play in creating a healthy and sustainable planet. Change starts within each one of us, switch to green energy sources!

Infrastructure

Energy Independence, Innov the Imperative for Investment In the United States, independence is an identity and a prized possession cherished as individualas and as a citizenry. U.S. energy independence was reclaimed this century after multiple decades of dependence on other markets. Sustaining this independence while rapidly evolving the industry to decarbonize is a generational challenge interconnected to geopolitical and economic dynamics that pit global cooperation to combat climate change against global competition for economic might.

vation and Infrastructure — ts and Regulatory Evolution

By Craig Heilman, VP Marketing & People, Arbo

Video Interview

Arbo (www.goarbo.com) provides software, analytics, and services to the energy marketing, transportation and trading industries for decision analysis and business automation. Our software platforms digitize workflows, integrate critical market data, and structure millions of regulatory filings to better connect buyers and sellers of physical energy.

eeting this challenge will require five big “I”s — imperative, investment, innovation, improvement, and infrastructure. All five of these I’s enabled the last energy transition referred to as the “shale revolution.” Reviewing that recent history can help frame what is needed for the coming evolution referred to herein as “net zero (NZ) electrification.” The International Energy Agency (IEA) projects global spending on clean energy technologies will need to jump from $1 trillion dollars per year to $5 trillion per year by the end of this decade for the world to reach net zero by 2050 (NZ50). For the U.S. to become a leader in global decarbonization efforts will require enormous investments, which the Biden administration is committed to making - ideally with bipartisan support. 61

Infrastructure

For big investments to get intendended returns, they need big accompanying changes that yield: 1) sustained enabling political, legal and regulatory regimes; 2) immense industrial innovation; and 3) effcient evolution of energy commerce. The shale revolution deployed innovation, investment and infrastructure based on existing legal and regulatory frameworks that were generally functioning. The renewables revolution will need more of these inputs, but it currently lacks effcient legal and regulatory framework(s) to build the interstate high voltage electrical transmission lines needed to support expansive renewables-based electrification. The siting and permitting of this critical infrastructure is done via a patchwork of state regulatory agencies and any one project can take decades to complete. The comparable interstate pipeline infrastructure built over the past decade was completed within one federal permitting framework, and a large project took an average of 3.5 years. Reform recommendations lean towards rulemaking and regional approaches, but those may not be enough to drive the timelines needed to reach NZ50 goals.

Imperative & Improvement Energy production, transportation, and consumption is complex and can be divisive, but the imperative

to reduce emissions and slow global warming is clear. The path to decarbonization by large scale electrification of transportation which will require orders of magnitude more renewables-based capacity and expanding and modernizing transmission grid infrastructure. The fragile bipartisan consensus emerging on infrastructure is some evidence of an imperative for action in the U.S. Consensus for action is much more important now than it was for the shale infrastructure scale-up, because the inherent challenges to permitting, siting and constructing electrical transmission infrastructure will require substantive legislative action. Discussion of the need for regulatory improvement to meet these challenges has been ongoing for well over a decade as stated in this excerpt from a 2009 Congressional Research Service: One criticism of current regulation is that it takes many years to permit a project. Expanding federal authority over permitting is viewed as a means of accelerating the process. The underlying assumption 1. Kaplan, Stan M., "Electric Power Transmission: Background and Policy Issues", Congressional Research Service, CRS Report for Congress, R40511 (2009) 2. Staff of the Federal Energy Regulatory Commission, Report on Barriers and Opportunities for High Voltage Transmission, (2020)

is that it is indeed important to build transmission lines faster. For example, if national priorities include quickly putting low carbon generating plants on line to reduce greenhouse gas emissions and to speed the introduction of electric vehicles, then a rapid permitting process may be critical.1 Looking forward and assuming the “imperative” is established, systemic improvement will need to follow. Transmission permitting is still a stateby-state patchwork that must navigate inevitable and intractable interstate disagreements on environmental impacts, consumer cost allocations, land use and eminent domain acquisition. This dynamic was again evaluated in a 2020 report requested by Congress from the Federal Energy Regulatory Commission which detailed the “barriers and opportunities” for high voltage transmission concluding that navigating state processes and stakeholders can cause transmission projects to take “in excess of a decade.”2

Interstate Gas Pipeline Paradigm This is in stark contrast to the regulatory and legal paradigm that supported the building of pipeline infrastructure to support the shale revolution. That paradigm — based on the 1938 Natural Gas 3. http://www.transwestexpress.net/about/history.shtml

Infrastructure

Act and its 1947 amendments — supported the construction of $100 billion dollars and 18,195 miles of interstate natural gas pipelines between 2008 and 2020 that together equate to approximately 223 BCF/d of capacity. Ninety-seven percent of projects approved under the NGA during that time were approved within two years. The average time for constructing a large (>100 miles) interstate pipeline project from approval to in-service was 3.48 years — well less than a decade for what could be considered linear infrastructure development comparable to electric transmission. However, as the industry well knows, federal regulation is no panacea and the averages deceive, since project timelines have increased over time. After approval, many projects ran into strong opposition and litigation that dramatically impacted their cost and schedules — and for some led to cancellation. Issues that led litigation regarding the Atlantic Coast Pipeline and PennEast Pipeline projects to the U.S. Supreme Court are the type of land use and regulatory jurisdictional issues that will most certainly impact future infrastructure projects irrespective of their emissions and renewables profiles.

Tangled Transmission In sharp contrast to the timelines depicted for interstate gas pipelines in the above graph, we highlight a large interstate high voltage electric transmission project that FERC uses in the above referenced report to Congress — TransWest Express.3 This project was initiated in 2005 and just recently completed all of its environmental and permitting reviews. In The Electric Grids at a Crossroads, Professor Alexandra Klass of the University of Minnesota Law School conducted an extensive analysis of the historical evolution of energy infrastructure permitting and future needs to develop three

recommendations for feasible regulatory frameworks when considering legal and state vs. federal political dynamics. While recognizing the success of centralized federal regulation of interstate projects, as exists for pipelines, Klass did not view that as a possibility for transmission and recommended any of the following regional approaches: 1. First, states could enter into interstate compacts under the Energy Policy Act of 2005 to create regional siting agencies with permitting authority over interstate transmission lines within those states. 2. Second, Congress could transfer siting authority to Regional Transmission Organizations (RTOs) in areas where RTOs exist. 3. Third, Congress could leave siting authority with the states but require state Public Utility Commissions and state courts to expressly consider regional transmission needs and regional energy needs in making siting and eminent domain decisions.4 The need for reform to the requisite regulatory regimes is becoming increasingly visible to federal policy makers. There are efforts to mitigate anticipatable state-to-state constraints to approvals of transmission projects both in draft legislation and agency policy, but they may not be enough to significantly impact en masse project feasibilities and schedules, which likely will require legal, process, and policy reform at all levels.

Innovation & Infrastructure The shale revolution included impressive innovations over several decades mostly in exploration and production process technologies. The fundamental fossil energy sources and equipment needed to transform them to fuel and power were the same, excepting the generation turbines needed to convert power plants from coal to natural gas. In comparison, 4. Alexandra B. Klass, "The Electric Grid at a Crossroads: A Regional Approach to Sitting Transmission Lines," U.C. Davis L. Rev. 1895 (2015)

Infrastructure

to achieve NZ50 electrification in 29 more years a litany of renewable source technologies will be needed as well as new grid transmission, reliability and power conversion technologies. The focus of innovation is on matching “nondispatchable” or intermittent renewable sources, such as wind and solar to constant and peaking demand and the transmission of that energy over long distances. Industry is working on enabling technologies for transmitting alternating current, advanced inverters, new storage processes, and distributed energy resources.

New Infrastructure The Biden trillion dollar American jobs plan includes $85 billion for energy. The more recent plan proposed by the president and a group of 10 senators contains an investment of $73 billion for energy, including electrical grid infrastructure for expansion and reliability. A categorical comparison of the spending in both plans.

natural gas, could play a significant role in NZ50 by transporting green hydrogen. While it wasn’t included in his American Jobs Plan, President Biden on Earth Day endorsed this idea, which is already being planned in Europe. Pipeline companies can view this as an opportunity, such as Williams, which included the potential for hydrogen conversion in a recent regulatory application.

Existing Infrastructure

Investment & Commerce Public and Private

Existing pipeline infrastructure, particularly for

Innovation and technologies that create and change

industries and markets can require investments backed by private capital markets, as well as public financing. Notably, shale revolution investments were almost entirely private, but given market dynamics, unit cost economics, and policy-driven origins, this doesn’t seem as likely for “electrification.” The current landscape finds private capital markets becoming more restrictive. While historically allocating investments primarily on potential for profitable returns, capital markets increasingly have broader stakeholder-driven objectives in areas such as ESG and are significantly influenced by activist shareholders.

Retail Prices More restrictive capital markets and the allocation of federal spending are only one constraint or enabler of energy evolution success. A big determinant will be the individual consumer’s willingness to pay a “green premium” and the facilitation of that willingness by rate governing regulators, such as the public utility commissions. During the transition from coal to natural gas, the U.S. retail consumer did not experience increased prices. Electricity prices stayed flat, and natural gas prices for electricity decreased due to abundant supply.

Wholesale Transactions Facilitation of wholesale commerce will also play a critical role on the road to NZ50. Transactions between buyers and sellers will need increased efficiency and transparency. The complexity of energy commerce is increasing in concert with the expanding number and distribution of energy sources as well as the need for new pricing mechanisms and markets for instruments such as carbon o sets and products such as responsibly sourced natural gas. This dynamic will challenge wholesale participants’ ability to continuously and transparently access evolving value chains and markets.

Conclusion The imperative for the world to evolve its production and consumption of energy to combat climate change is clear. Change to the generation, transmission, distribution and consumption of electricity must be a foundation of energy evolution. For the U.S. to lead this massive decarbonization effort while maintaining energy independence, it will need to improve its regulatory regimes, foster innovation, make big investments, and harness new and existing infrastructure. 67

Infrastructure

“30 Minutes or Less” base, power lines were doubling in size as fast as they could lay the cables. However, brownouts and blackouts were the cost of this convenient luxury. By Brian Conway,

Sound familiar?

CEO of Ozop Energy Solutions

In the year 2021, 135 years later, the problem of demand from our distribution systems far exceeding their current capacities has returned with a vengeance. Power outages are a regular occurrence in major cities across the country. Now, as we attempt to accommodate the EV revolution, we do not have the luxury of simply laying new or larger cable. We must find a completely new and different solution.

(OTC: OZSC)

n the year 1835, plus or minus a whole bunch of historical arguments, the first theories of electricity were examined. However, it really wasn’t until the 1880s that electrical transmission and distribution systems started being deployed. Due to the commercial market growth and the addition of the residential customer

Enter Ozop Energy Solutions. Before we get into what Ozop is offering as a solution, we must first take a look at why EV chargers cannot simply be “installed” at people’s homes or offices as a set-it-and-forget-it solution.

If you think about it, you need two sperate residential electricity products: Alternating Current delivered by the grid (designed for TVs and toasters) and Direct Current, which is what EVs need to operate. To fully charge the average electric vehicle with a level 2 charger (from empty) using AC from the grid takes 10 to 36 hours. It’s like trying to put out a fire with a garden hose. Given the desire by most EV owners to charge their cars in 30 minutes or less, most people do not have the time or patience for this. Conversely, the appropriate power supply – “level 3” DC fast chargers or DCFCs (the “fire hose” in this analogy) – is very costly. Quite simply, it would cost $40k plus a $15k battery for the luxury of rapid charging at home plus an additional $10-15k if you want to be “solar-green” about it. At 300 kW’s required to power a full charge in 2030 minutes (the amount of power typically flowing

“IN THE YEAR 2021, THE PROBLEM OF DEMAND FROM OUR DISTRIBUTION SYSTEMS FAR EXCEEDING THEIR CURRENT CAPACITIES HAS RETURNED WITH A VENGEANCE. POWER OUTAGES ARE A REGULAR OCCURRENCE IN MAJOR CITIES ACROSS THE COUNTRY.”

Infrastructure

to more than 30 homes), that would cost around $700 per charge over 3 years and don’t forget your cost of money. Additionally, most cities are not handing out permits to install DCFCs due to the excessive draw on the grid. Alternative? Build a backyard solar power plant!

EV Charging is MESS-y OZOP Energy Solutions puts electrical demand in perspective before jumping to the at-home rapid charging solution – the NeoGrid™ or “Modular Energy Storage System.” The OZOP NeoGrid is a fully off-grid solution that can work in conjunction with MicroGrids for the purpose of rapidly charging EVs. Think of it this way… Micro-grids, if we put a solar system on one house, it is powered for the moment as long as the sun is out. If we attach a battery to that same house system, it can be powered for a few days. If we now build a network of 20 homes, central storage, renewable energy production and software/ logic that controls the delivery and consumption

“WE MUST FIRST TAKE A LOOK AT WHY EV CHARGERS CANNOT SIMPLY BE “INSTALLED” AT PEOPLE’S HOMES OR OFFICES AS A SETIT-AND-FORGET-IT SOLUTION.”

including all pathways in-between, you have what is called a residential micro-grid that will provide power to multiple homes. If designed properly, it can offset the massive demands of the Level 3 EV chargers but that is decades away for the vast majority. Adding Neo Grids to the equation separates the residential power demands from the EV demands, it also changes the price structure which is inevitable. EV owners reject paying for electricity at a level 2 charger. They feel it should be free because they should not have to wait 90 minutes for a charge. So, providing a 20-minute charge through the Neo Grid where a top-off will actually take 30 minutes or less, this luxury is going to cost the consumer the same price as gasoline does per mile.

Parity with ICE The cost of electricity is rising and is already increasing from the new demand, and will reach parity with gasoline prices per mile in the coming year or so. If gas costs $3.50/gallon and your car gets 17 MPG, the cost of fuel is $0.185 per mile (SUVs $0.24). The same car costs $0.12 per mile maintenance, car dependent, so in total the cost of driving an ICE is $0.31-0.38 per mile. Electric vehicles typically travel 2.7 miles per kWh at $0.25 per kWh, or the equivalent of $1.58 per gallon based on milage comparison, but we are forgetting the cost of the hardware – the “under

30 charger” – which will command an additional fee to offset the investment. The OZOP NeoGrid supplies off grid energy for EV auto & light truck solutions when 2 hours doesn’t work. No grid, no utilities and most of all, no charging restrictions.

About the Author Brian Conway is CEO of Ozop Energy Solutions, which is developing platforms to address grid sustainability and EV charging requirements.

Women in Energy Tara Meek President of Global Women’s Energy Network Board and Regulatory Affairs Specialist with Williams

Your Network is Your Networth Connecting women in the energy sector Networking in the business world has become crucial for everyone's professional development. Particularly in the energy industry, it has proved necessary to acquire networking skills from an early stage in your career to provide your work and talent wider exposure. Interview by Ana Tafoya Editorial Coordinator (Energy Capital Magazine)

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hy? The answer is simple: it's been the "traditional" way to run business. Whether it is a professional platform to find job opportunities, or an industry network mainly focused on sharing similar experiences, people have always looked for spaces to connect with others and jointly create bigger things. Besides, it's making connections that can really help women succeed in the industry; however, especially for them, that's not an easy thing to do.

WHAT IS THE IMPORTANCE OF OPENING MORE SPACES FOR WOMEN IN ENERGY TO CONNECT? WHAT ARE THE BENEFITS OF NETWORKING, AND PARTICULARLY, OF NETWORKING AS A WOMAN IN THIS SECTOR?

Women in Energy

We shouldn't dismiss the fact that men have been mainly responsible for mastering and running networking circles and groups in the energy sector. On the other hand, women have historically had less access to information and environments that can help them further their careers and/ or businesses. Having this in mind, it is no surprise that frequently, women do not feel very welcomed when joining male-dominated business networks. As a result, they have acquired/developed different networking skills compared to their male counterparts. What is the importance of acknowledging this and thus opening more spaces for women in energy to connect? What are the benefits of networking, and particularly, of networking as a woman in this sector? In interview with Energy Capital, Tara Meek, President of Global Women’s Energy Network Board and Regulatory Affairs Specialist with Williams, talked with us about how this association is raising the conversation among energy companies, organizations, and members, to further increase women's participation and networking in the energy sector. One big question comes when we talk about women in energy, and that is, do female professionals have enough and fair participation in the industry? In fact, the number of women working in the sector and the positions they occupy is still a matter of concern – because there is still a long way to go 74

TO TACKLE THE WIDE GAPS EXISTING IN THE INDUSTRY, EACH WEN CHAPTER CONSTANTLY HOSTS NETWORKING EVENTS THAT HELP ITS MEMBERS BETTER LEVERAGE THEIR PROFESSIONAL AND BUSINESS SKILLS WHILE BECOMING MORE EDUCATED IN THE FIELDS WHERE THEY WORK.

to achieve parity. However, as Tara notes, there is also room for hope. After Covid, the number of women in the industry has significantly declined, even going back to where the industry was fifty years ago. Under these circumstances, organizations such as WEN have become crucial to help their members acquire career and leadership development. As Tara notes, WEN is currently a global organization with presence in the United States (with 21 chapters) and Mexico, as well as with potential chapters to be open soon in Canada, Singapore, and Nigeria. To tackle the wide gaps existing in the industry, each WEN chapter constantly hosts networking events that help its members better leverage their professional and business skills while becoming more educated in the fields where they work. In this way, the organization supports its members on a professional basis, but not only that! WEN similarly hosts financial and physical wellness events in comfortable environments to holistically empower women. Lastly, but equally important, WEN has a charity event supported by the WEN foundation, which 75

Women in Energy

Credit: Equinor

mainly focuses on providing funds for charity and scholarships for women in the industry. The reasons for joining a network vary. However, being a female professional in a considerably masculinized sector definitely supposes having some specific needs when joining these forums. For Tara, for instance, one key reason she decided to join WEN was the lack of female representation at energy events and in the industry overall. She remembers going to a 600 people energy event in 2008, where she was one of the only three women present. Then, she noticed how important it was to be able to join a comfortable space for networking, which had female representation, and therefore, allowed her to get empowered that way.

As she accurately points out, joining business spaces/events and being able to connect with other professionals successfully brings your career tons of opportunities if leveraged - "your network is your networth!" Tara says. Also, you can acquire and even improve your leadership skills while feeling in a riskfree environment; since connecting in unsafe/ uncomfortable circles often foregoes many women the opportunity to expand their networks. To that, we should add that women are constantly reprehended for being perceived as 'too aggressive' when asking for what they need in business. As a result, that can keep many talented females back when it comes to networking; and that's why it is so stringent to open more spaces for their participation.

In this way, women's networks can bring multiple advantages, and their particularities are what make them so unique and powerful. As some specialized authors note, the networks formed by women, whether they consist on business matters or private-sphere issues, are less about selling and more about sharing. Accordingly, the benefits of women's networking styles are enormous; for instance, including finding valuable longterm business contacts; more disposition to hearing advice from peers and experts; and sharing knowledge and firsthand experiences, among others. Notably, a big plus is that all these benefits come with an emphasis on making longlasting connections and genuine collaboration. Nevertheless, building and managing women's networks for empowerment is not an individual nor an easy task. The participation of all the involved parties, including companies and other industry organizations, is crucial. More comprehensive platforms mean wider exposure, and also, the larger the membership, the larger the opportunities. In this way, WEN is hoping and already actively working to create something that can help companies address diversity and gender equality, not only by joining a network but by materially advancing their policies and actions. 77

Interview

Interview with Hillary Holmes Partner, Gibson Dunn & Crutcher www.gibsondunn.com

Preferred equity and ESG: crucial in capital raising for the energy industry Innovative investment sources and the increasingly important role of Environmental, Social, and Governance (ESG) criteria in the energy industry are just some of the new elements companies must consider to navigate the energy transition better.

Video Interview

ompanies shouldn't dismiss the importance of these elements, whether it is to access more flexible ways of financing or leverage the economic benefits that come with more inclusive policies in an increasingly ESG-driven business environment. In interview with Energy Capital, Hillary Holmes, partner at Gibson Dunn & Crutcher, talked with us about the value of preferred equity in the energy industry and the increasing role of ESG in capital raising for the sector.

Preferred equity for energy companies: a flexible option During our conversation, Hillary underscored the evolving relevance of preferred equity for energy companies. In her words, this capital raising form is one "that 79

Interview

provides an option to match an energy company's need for developing capital in accordance to the investor's demand for predictable returns." Accordingly, this is a very flexible product which is what makes it so attractive to capital raisers. Indeed, "preferred equity can be structured like debt, and at the same time, have the maturity to provide access to cash interest payments; particularly, with a no-call period and mandatory redemption." On the investor's side, such "debt" increases over time similar to an interest rate; but in all cases, preferred equity will 80

have restrictive covenants that considerably protect the investor. Under these circumstances, what can we expect for preferred equity in the future? According to Hillary, we first need to look to the past. Historically, energy companies such as the ones focused on midstream activities used to issue preferred equity in registered offerings to a broad retail base of investors. These firms proceeded that way as the public equity markets were more open to energy companies. In contrast, more recently, preferred equity is issued only to select institutions on a private basis. Therefore, in the future, "we can expect

to continue to see preferred equity used as a really valuable capital-raising tool."

The increasing role of ESG in capital raising for the energy industry Following investment concerns under the evolving energy transition scenario, we asked Hillary to share her perspective on the increasing role of ESG for capital raising in the energy industry. As a specialist on the topic, Hillary noted that ESG "is absolutely critical to capital raising in the energy industry; particularly as the months, not even years, go by."

Just to provide a quick picture of these criteria's relevance, currently, "one out of every three dollars under professional management is tagged for sustainable related investments. Similarly, many investors are basically boycotting companies that don't have ESG friendly initiatives. Even beyond, the general investor sentiment is favoring companies that demonstrate a commitment to ESG." And not only can the industry access more capital, but it also may be able to access cheaper capital. In fact, "in the 81

Interview

future, energy companies that do not leverage ESG or write it off as unimportant are going to lose access to a growing pool of capital," Hillary added. But simply integrating an ESG approach in both capital raising and your business strategy isn't enough. For ESG to become truly effective, companies should consider where they are in terms of their size and activities. "No one size fits all when it comes to an ESG strategy, and no one size fits all with respect to ESG," Hillary noted. Another important topic to consider when talking about ESG strategies is the regulatory framework. "Right now, if you put one company's sustainability report next to another, it's not entirely apples to oranges; but it's certainly a red apple to a green apple just nothing looks exactly the same." However, as regulations align, the industry can certainly expect to see some 82

standardized disclosure requirements over the next few years. Those who have implemented ESG strategies with anticipation will be the most benefited from this standardization.

Diversity in the energy sector Finally, Hillary talked with us about a crucial component within the current conversation surrounding the energy industry. As diverse and inclusive workplaces become more the rule than the extraordinary, companies in the sector should consider there's a strong business case for gender/ethnic/cultural diversity and corporate leadership. As many studies show, the most diverse companies are now more likely than ever to outperform their less diverse peers on profitability. "So, the question is not one of altruism or doing the right thing,” Hillary continued, “it's also a question of what's good for business, and I think energy companies recognize this.

Thus, most have proactively taken steps to increase diversity in their leadership and workforce." Nevertheless, and while we've seen great advances in this area, there is much more work to be done; particularly for the energy sector, which has a long history with less diverse boards of directors under any industry globally. There is still room for improvement and change; however, with the evolving conditions in the industry, and importantly, a more open attitude to discuss these topics, companies in the sector will be faced with better resources to address a transition that is not only focused on seeking cleaner ways to produce and deliver energy, but also on finding more human and people-centered strategies to conduct business through a holisticapproach for reliable investments. 83

Doing Business

The Clean Solution to our Critical Mineral Supply Problem Video Interview

There are a couple of dirty little secrets in clean energy. Mining the materials required to build the clean energy transition creates significant pollution in overseas mines and many of these critical materials are also overwhelmingly controlled by China. 84

By Megan O’Connor, Co-Founder & CEO, Nth Cycle

hese challenges have put clean energy at a crossroads. The very technologies that will save us—electric vehicles, wind turbines, and processing power— are built on a foundation of rare metals extracted from the earth at great monetary and environmental costs. As the clean energy transition has accelerated, demand for critical minerals to power the energy transition has grown exponentially. We know

MINING THE MATERIALS REQUIRED TO BUILD THE CLEAN ENERGY TRANSITION CREATES SIGNIFICANT POLLUTION IN OVERSEAS MINES 85

Doing Business

THE VERY TECHNOLOGIES THAT WILL SAVE US— ELECTRIC VEHICLES, WIND TURBINES, AND PROCESSING POWER—ARE BUILT ON A FOUNDATION OF RARE METALS EXTRACTED FROM THE EARTH AT GREAT MONETARY AND ENVIRONMENTAL COSTS.

I BELIEVE THAT ALL THE CRITICAL MINERALS NEEDED FOR THE CLEAN ENERGY TRANSITION ARE ALREADY IN CIRCULATION DOMESTICALLY OR COULD BE SAFELY MINED HERE IN NORTH AMERICA.

AT MY COMPANY, NTH CYCLE, WE’VE PUT OUR MINDS AND HEARTS INTO SOLVING THIS PROBLEM. WE’VE DEVELOPED NEW TECHNOLOGY THAT SUPPORTS BATTERY RECYCLERS AND MINERS.

that mining deeper and deeper, and building landfills higher and wider, works against our fight to save the planet. We also know that most of these critical minerals are outside of the United States. Other countries, particularly China, currently control the lion’s share of critical minerals required for the clean energy transition. If we’re not able to solve these challenges, it could derail the growth of clean energy and undercut many of its benefits.

I see these challenges as an opportunity. To create the world we want to see –a world that is cleaner, greener, more efficient, and more equitable– we need our industries to also be cleaner, greener, more efficient, and more equitable. How? New technologies, arriving today, that help us capture the materials needed for the energy transition from electronics waste and cleaner, more efficient mines. In fact, I believe that all the critical minerals 87

Doing Business

needed for the clean energy transition are already in circulation domestically or could be safely mined here in North America.

We just didn’t have a clean, profitable way of retrieving them, until now. We can make the materials recovery processes more sustainable while improving profits at the same time. The tools required to cleanly mine cobalt, nickel, and manganese exist today. The technologies needed to breakdown old cell phones, magnets, and electric vehicles into their component parts exists today. But, the processes that transform them into productiongrade critical minerals for new manufacturing are old, dirty, and expensive. 88

USING VERY LITTLE ELECTRICITY (WHICH CAN BE GENERATED FROM 100% CLEAN RENEWABLE POWER) ELECTRO-EXTRACTION REDUCES 75 PERCENT OF THE GREENHOUSE GASES CURRENTLY EMITTED DURING THE RECOVERY OF PRODUCTION-GRADE CRITICAL MINERALS.

At my company, Nth Cycle, we’ve put our minds and hearts into solving this problem. We’ve developed new technology that supports battery recyclers and miners. We call it electro-extraction, an alternative to hydrometallurgy and pyrometallurgy. Rather than using large, greenhouse gas-emitting furnaces or harsh chemicals to process metals, our technology uses only electricity. The technology can also transform the outputs of electronics recycling, and waste from existing mines, into high-quality critical minerals ready to be used again. No more hot, dirty furnaces; no harsh chemical waste.

Electro-extraction is clean, customizable, and consistent. Using very little electricity (which can be generated from 100% clean renewable power) electroextraction reduces 75 percent of the greenhouse gases currently emitted during the recovery of production-grade critical minerals. The technology’s closed-loop chemical process is truly circular. Our system’s small footprint also reduces the need for additional balance of system components and avoids new environmental permits. In transforming our lives and economies, the technologies we harness must be as clean and sustainable as the world we imagine. At Nth Cycle, we’ve created the tools to make that future possible today. 89

Doing Business

An increasingly contested landscape for pipelines: what to do? By Energy Capital

ipeline infrastructure for energy activities in North America has been crucial for decades. The activities involved in the safe transport of energy material (traditionally hydrocarbons, and particularly natural gas) not only have strengthened the regional economy through export activities but have also boosted the generation of construction well-paid jobs. Moreover, pipelines are the safest and most efficient way to move large volumes of oil and natural gas from development areas to refineries, petrochemical plants, and even to our homes and businesses for use. However, the challenges and disadvantages of pipeline infrastructure have been evident over the years. With the advent of the energy transition and the environmental, technology

improvement, and safety challenges that this has entailed, pipeline developers and operators have had to adapt to a highly changing and demanding environment. According to a July report by the Financial Post, "the U.S. built the equivalent of 28 Keystone XLs over the past decade." However, North America is expected to become "an increasingly inhospitable place for new projects" in the incoming years. One example is the recent wave of project cancellations to construct interstate and mega pipelines in the region. More than being an obstacle, such events are ideal for rethinking what the energy industry can do to transition and contribute economically to regional growth. In this article, we'll talk about the current status of pipeline infrastructure in North America, including both the projects under development

and those that have been canceled. Moreover, we'll briefly assess how, in this landscape, the energy industry is navigating and leveraging future business opportunities.

Where are we regarding pipeline infrastructure? Globally, planned spending on pipeline construction is set to rise by $45 billion in 2021. Notably, there has been some positive movement concerning natural gas pipelines throughout the year in the U.S. According to the U.S. Energy Information Administration (EIA), despite a 2020 characterized by pricing woes and a crippling pandemic, into early 2021, about 4.4 Bcf/d (124 MMcm/d) of new natural gas pipeline capacity has entered service. Some examples are the following:

• Saginaw Trail Pipeline by Consumer Energy (Interstate). Status: entered into service in November 2020. Particularly, it consisted of replacing and expanding pipelines and other infrastructure, with 200 MMcf/d (5.66 MMcm/d) of capacity in the central Michigan counties of Saginaw, Genesse, and Oakland. • Buckeye Xpress by Columbia Gas Transmission (CGT). Status: entered into service in December 2020. It was an improvements project that replaced 66 miles (106 km) of 36-inch (914-mm) pipe in Ohio and West Virginia. Besides, it added 300 MMcf/d (8.5 MMcm/d) of capacity from the Appalachia Basin into CGT's interconnection in Leach, Ky., and the TCO Pool in West Virginia. • The Permian Highway Pipeline by Kinder Morgan. It is a 430-mile (692km) pipeline from the Waha Hub in West Texas. It added 2.1 Bcf/d (59 MMcm/d) of capacity to Katy, Texas, and has connections to Mexico. • The Agua Blanca expansion by Whitewater/MPLX. Status: entered into service in late January 2021. It ships an additional 1.8 Bcf/d (51 MMcm/d) of natural gas to the Waha Hub. Additionally, it connects to 20 processing sites in the Delaware Basin and connects with the 2-Bcf/d (57-MMcm/d) Whistler Pipeline, targeted for completion in the third quarter. Similarly, according to North American Oil and Gas Pipelines, at least 56 pipeline projects between March-July 2021 (including construction, expansion, additions, maintenance, security, 91

Doing Business

among other activities/services) were under development in the country. On the other hand, according to the Government of Canada, currently, there are more than 840,000 kilometers (km) of pipelines across the country, regulated by Natural Resources Canada and provincially. Besides and signaling a positive trend for the industry, the country's pipeline capital expenditures will reach $6 billion this year. In terms of miles, Canada will account for 23% of all North American pipeline installations until 2025. Currently, two major oil pipeline projects are proposed or underway in Canada. According to the Government, "these are nation-building infrastructure projects that create good jobs for Canadians." Besides, the administration notes that these "will provide access to growing international markets to ensure Canada can get full value for (its) oil and natural gas." The two critical pipelines for Canada are the Enbridge Line 3 Replacement Project and the Trans Mountain Expansion Project. Regarding the first one, the Canadian company Enbridge quickly finished about 60% of its work on the project after starting in December last year, but not after six years of environmental and regulatory reviews on the project. Through the Enbridge Line 3, the company intends to replace an older pipeline that cuts a similar route through the northern part of Edmonton, Alberta, before ending at a terminal in Superior, Wisconsin. Indeed, the existing 34inch pipeline was built in the 1960s. Similarly, the Trans Mountain Expansion Project is currently under development. Accordingly, it will increase capacity to support Canadian crude oil production growth and ensure access to global energy markets. As the largest project in this pipeline's history, it involves installing 92

approximately 980 kilometers of new pipeline. Also, new and modified facilities, including pump stations and terminals, and a new dock complex at the Westridge Marine Terminal in Burnaby, British Columbia.

Not obstacles, but opportunities – project cancellations and delays Although these projects have continued their development with resilience, the path has not been free of challenges. Especially the pressures coming from local activists and environmental groups over the last decade have played a crucial role in the industry's evolution. For instance, since 2016, the Trans Mountain Expansion Project has experienced 93

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significant backlash from Canada's local communities and civic organizations. Among the requests that these groups asked are: the involvement of the project's parties to comply with indigenous and local communities' environmental justice; long-term well-paid job creation, secure infrastructure that can avoid spills/leaks during climate-challenging seasons, among other things. Thus, throughout the last five years, the Canadian government worked closely with the interested parties to boost resilient, sustainable, cost-efficient, and socially sensitive pipeline projects. By enforcing regulations and updating past-date legislation, the country is navigating the energy transition and adapting its pipeline infrastructure to an evolving scenario. In the U.S., the recent wave of projects' cancellations and delays, including the PennEast Pipeline project (PennEast Pipeline Company), Prairie State (Tallgrass Energy), Northeast Energy Direct (Tennessee Gas), Constitution (Williams), and Atlantic Coast Pipeline (Dominion Energy and Duke Energy) are clear examples of the opportunities pipeline companies have to observe to configure their future strategies better. For instance, the $8 billion Atlantic Coast natural gas pipeline was canceled in August 2020 due to delays and cost overruns attributed to legal and regulatory disputes. When Duke Energy and Dominion Energy made the cancellation announcement, both companies recognized that it reflected "the increasing legal uncertainty that overhangs large-scale energy and industrial infrastructure development in the U.S." Even though they regretted the decision after six years of hard work, this process pushed the companies to collaborate and come up with previously unexplored approaches. For instance, in contrast to how the landscape 94

looked just a few decades ago, Duke Energy and Dominion engaged extensively with and incorporated "feedback from local communities, labor and industrial leaders, government and permitting agencies, environmental interests, and social justice organizations" throughout the project's life-span. We can see a similar story with the PennEast Pipeline Project. In late June, the U.S. Supreme Court removed one obstacle to constructing the $1 billion and 110-mile project pipeline by allowing the company to acquire 41-state controlled properties. Nevertheless, the decision still faces ongoing legal and regulatory challenges. According to activists and political actors opposing the project, water management alternatives (highly sustainable ones), are crucial for the pipeline to move forward. If this is not considered, the project will likely

jeopardize the safe, clean water flow to the communities and nearby farms. A similar story was the Williams Northeast supply enhancement pipeline project which recently received a two-year extension by FERC after been delayed due to New York not issuing water permits for construction. These experiences show us that several lawsuits will likely come if these issues are not addressed by the involved companies conducting these projects.

What does this contested landscape is teaching the industry? The cancellation of TC Energy Corp.'s 1,947-kilometer Keystone XL pipeline by U.S. President Biden earlier this year had an impact on how the industry will likely evolve in the years to come. For instance, Enbridge Inc. proposed changes to the operational

Line 5 project, which also faces regulatory delays and is in mediation with the state of Michigan (currently opposed to the project). An increasing focus on ESG (environmental, social, and governance) is a significant consideration in North America. To that, adds geopolitics and the growing momentum for the energy transition in the western hemisphere. Per these circumstances, there is the potential risk of reduced appetite from financiers and lenders to finance fossil fuel projects going forward. The vivid consequences of that trend are increased delays and costs, and also cancellations of several projects. Thus, there are several ways through which pipeline developers are trying to address these challenges and turn them into opportunities. In the U.S., for instance, the Department of Energy notes that pipelines could be a lowcost option for delivering large volumes of the gas of the future: hydrogen. Nonetheless, the potential for this gas still requires highly advanced infrastructure that can contain leaks and permeation and secure reliable, more durable hydrogen compression technology. Similar transformations are in technology improvement for the future transportation of biofuels, biogas, and biomethane (renewable natural gas). Until now, in the U.S., several pipeline developers are assessing how they can adapt their already existing infrastructure to comply with future challenges. Like in all the other energy industries, pipeline companies will have to adapt to transform the challenges they are faced with into highvalued opportunities to survive. Existing pipeline infrastructure is crucial for the energy transition to evolve. To acknowledge this and leverage it, will be vital in navigating the current uncertainty in the sector. 95

Energy Capital The Magazine Sep-Oct 2021-Edition 05

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