Nota Bene Podcast Ep. 144
The International Race toward Green Hydrogen with GHC President Janice Lin and Tony Toranto
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Listen to the original podcast released September 22, 2021 here: https://www.sheppard.com/notabene-336
Green hydrogen is a new form of green energy, a clean and safe energy carrier that can be used as a fuel for electricity production and transportation. As with any new industry, there is much that is up in the air as far as its regulation, industrialization, and progress goes. Janice Lin and Tony Toranto pull from their robust knowledge of the green hydrogen industry as they cover the basics of what green hydrogen is, how it’s created as well as what its future looks like in America.
Guests:
Janice Lin is the Founder and President of the Green Hydrogen Coalition and the Founder and Chief Executive Officer of Strategen. Janice has over 25 years of strategy experience and has distinguished herself as a leading clean energy changemaker. Janice co-founded and for a decade served as Executive Director of the California Energy Storage Alliance, where she helped create the world’s most robust energy storage market. In 2019, Janice launched the Green Hydrogen Coalition, an educational non-profit dedicated to facilitating policies and practices to advance the production and use of green hydrogen in all sectors where it will accelerate the transition to a carbon free energy system.
Tony Toranto is a partner in the Real Estate, Corporate and Finance Practice Groups in the firm's San Diego (Del Mar) and San Francisco offices. Tony is a nationally recognized finance and commercial lawyer with three areas of concentration: corporate, real estate and energy transactions. He is Team Leader of the firm's Energy, Infrastructure and Project Finance Team, who regularly advises clients on conventional and renewable projects, including some of the largest energy projects in the industry. Tony is on the Leadership Committee of the Green Hydrogen Coalition. He possesses a dual J.D./M.B.A. degree and started his career as a client in private equity; he brings that commercial understanding to every deal.
Transcript:
Michael P.A. Cohen:
Welcome to Episode 144 of the Nota Bene Podcast and thank you so much to all of our listeners in more than a hundred nations around the planet. We so appreciate your continued participation in our ongoing conversations and your feedback. Please keep it coming. It does continue to help influence our programming now and forward.
Michael P.A. Cohen:
Joining me on today's show are Janice Lin and Tony Toranto. Janice received her undergraduate degree from the University of Pennsylvania in Philadelphia I think. She also received a B.S. from Penn's Wharton School, among the nation's leading business schools. She received her MBA from the Stanford Graduate School of Business. Janice is the Founder and President of the Green Hydrogen Coalition, our topic and subject matter for today's podcast. She's also the founder and CEO of Strategen. From 2009 to 2019, Janice co-founded and served as the Executive Director of the California Energy Storage Alliance.
Michael P.A. Cohen:
She has served and may presently serve, she can let me know one way or the other, on the United States Department of Energy Electricity Advisory Council. Has been on the Board of Advisors for the Energy Policy Initiatives Center. She serves the University of California San Diego Strategic Energy Initiatives Advisory Council. She was a co-founder and is a co-founder and chair of the annual Energy Storage North America Conference.
Michael P.A. Cohen:
She previously has served several senior management positions with SunPower corporation. She's won several awards including recently the 2019 Cleanie for Entrepreneur of the Year. I think that is actually a pretty big achievement and a pretty interesting award. Janice is generally known internationally as a thought leader in the world's turn towards decarbonization. I like to think of just from my own research from the podcast that Janice knows energy. Janice Lin, welcome to the Nota Bene Podcast.
Janice Lin:
Thank you, Michael. It's really an honor to be here.
Michael P.A. Cohen:
We're so grateful to have you and really look forward to today's conversation. With Janice today is Tony Toranto. Tony received his undergraduate AB and MA, his master's MBA and his Juris Doctor degree all from Stanford University. This is a man who certainly likes the Palo Alto Hills and spent a good deal of time there. He leads Sheppard Mullin's Energy, Infrastructure and Project Finance team. Tony practices in Delmar, one of the firm's two San Diego offices, as well as the firm's San Francisco office, where I have spent some substantial time in my life with the law firm.
Michael P.A. Cohen:
Tony regularly advises clients on some of the largest energy projects in the country. He's widely recognized and acknowledged as a thought leader in his field as well. We will link Tony's bio to the show notes. And with Janice's permission, we will link to the Green Hydrogen Coalition website in the show notes as well, where you can find all kinds of information that I urge you to pursue. Tony also serves on the Green Hydrogen Coalition leadership committee. Tony Toranto, welcome to the Nota Bene Podcast.
Tony Toranto:
Michael, thank you so much. Thanks for having us.
Michael P.A. Cohen:
It's so wonderful to have you. So I'd like to just jump in and maybe I should jump in right with Janice and ask, Janice, what is green hydrogen? And maybe we can just go from there, but I think that might be the question on many listeners' minds around the globe as we have jumped into this podcast.
Janice Lin:
Thank you, Michael. Happy to jump in there. First of all, hydrogen is a very common molecule. It's one of the most plentiful molecules in the universe, on our planet. Our bodies are made out of hydrogen and hydrogen is an industrially traded commodity and has been for decades and decades. The thing that most people don't realize is the hydrogen that's sold today in very large volumes, like a hundred million metric tons per year . It's mostly made from fossil fuels, from oil and gas, and you can make it from coal. And what green hydrogen is, our definition, the GHC's definition is quite expensive and open minded in that it defines it as not being made from fossil fuels.
Janice Lin:
So it's all the other pathways by which you can create hydrogen, not from fossil fuel feed stocks. And of course, hydrogen must be created. So it requires process energy. And we say that it's hydrogen made from not fossil fuel feed stocks in a process that has climate integrity. So what that means is it will produce very little or de minimis greenhouse gas emissions on a life cycle basis.
Michael P.A. Cohen:
That's a fabulous launching point. Not asking you to be too technical in my next question, but what are some of those processes? It's funny to me the sun is this giant hydrogen bomb and almost every star is in its dormant phases and starts to glow white and loses 80% of its interstellar mass in the universe. And I don't know where that goes, but we've got this thing that we're barely alive because we've got an atmosphere that redirects solar, wind, if it hits us and protects us from looking something other than like Mars or Venus. But the thing is basically a hydrogen bomb. And we're digging stuff up to make hydrogen. So I think that's kind of funny. So what are some of the ways we can get hydrogen without digging stuff up?
Janice Lin:
Yeah. And that's what I find so exciting on the production side is there are so many pathways. Let's start with the feed stocks. So water is a great feedstock for hydrogen. Water is H2O. Two molecules of hydrogen, one molecule of oxygen. How you get the hydrogen is you need electricity to break the bond and separate the hydrogen from the oxygen. You can do that with any form of zero carbon electricity. It could be solar, wind, nuclear, lots of ways to do that. That's commercially proven. The process is called electrolysis. Electrolysis has been around and commercially available for many, many decades. The challenge is it just hasn't scaled. It's starting to scale now. So it's getting cheaper and cheaper. And that zero carbon electricity is now really, really inexpensive. So that's the good news.
Janice Lin:
There are other pathways to make hydrogen that are viable today. You can take biogas for example, and just like we reform natural gas, which is fossil fuel, you can reform biogas and produce green hydrogen. And then another pathway that's being commercially done today is they call it thermochemical conversion of waste, or it could be organic waste. You can even do it with non-recyclable paper, plastic. That thermochemical conversion and there's several processes basically turns that waste into a syngas. The syngas can be further refined into green hydrogen.
Michael P.A. Cohen:
Wow. Almost everything you just described seems to me intuitively to not only free the hydrogen molecule, but have a positive byproduct in some way dealing with waste, releasing oxygen. I mean, I can just go on and on. Am I right? Are these win-win methods for hydrogen energy?
Janice Lin:
Yes. As long as you're careful about the process. Every process requires energy and may have some emissions. So again, that's why the importance of focusing on environmental integrity, but you're right. Waste is a problem. It's very expensive to get rid of today. And instead of sending it to a landfill, we could be converting it to beneficial fuels, green hydrogen, for example.
Michael P.A. Cohen:
This is going to be one of those too good to be true moments, but we'll get to it.
Janice Lin:
Well, Michael, I also wanted to mention those are the commercially viable ones. There's a ton of research and innovation happening now of new pathways to produce green hydrogen. So direct photocatalytic pathways. And so these are earlier and haven't been commercialized. And so when you think about wow, there's so much we can do right now with the technologies we can buy today, then there's the future. It's even more exciting.
Michael P.A. Cohen:
That is super exciting.
Tony Toranto:
If I can just add a little bit here. I think that you talked about hydrogen being actually the most abundant molecule in the universe, but we don't find it in its own individual form on Earth. It's bonded with other things. And so the energy that Janice is describing that we have to go through the process is how do we separate hydrogen from other things. It's incredibly common. It just needs to be separated from things. But one of the things that's really important to think about, and if you put your mindset on a little bit like this, I think it helps to think about how important hydrogen is and how important hydrogen can be.
Tony Toranto:
Gasoline everybody's used to seeing. But when you think about it, gasoline in and of itself is kind of storing energy. We're used to thinking of batteries as storing energy, but you can think of gasoline and other kinds of molecules storing energy. Well, hydrogen is an incredibly, incredibly efficient place to store energy. And so what you can do when you actually isolate hydrogen is you can efficiently store an incredible amount of energy. And then there are very efficient processes for converting that.
Tony Toranto:
Hydrogen's a very flexible fuel, so you can convert it and use it in a lot of clean and wonderful, productive ways. There are a lot of different types of uses for that. But it takes about three kilograms of gasoline to have the same amount of energy as a kilogram of hydrogen, which is to say it's a very, very powerful fuel.
Janice Lin:
Yeah, I love Tony and you know what's great? Many liquid fossil fuels have a shelf life. You can't keep gasoline forever. It goes bad. Anyone who has the motorcycle sitting in the garage knows this. Hydrogen once you have made it, it can sit there indefinitely, it doesn't go bad. So it's really an incredible fuel for resiliency.
Tony Toranto:
And even when you compare that using that same kind of logic, when you think about hydrogen as energy storage, there are other kinds of storage technologies out there. Batteries, for example, lithium ion type batteries and such. And batteries we know are very good at storing energy for relatively short periods of time, but they have a harder time storing energy for longer periods of time. Hydrogen's not so. You can store hydrogen for very long periods of time. And the consequence of that is that it, again, can be a very efficient way to store and it can be very useful for lots of different applications.
Michael P.A. Cohen:
That's so super. And I'd love to hear about what the coalition is doing because that answers Janice and Tony a lot of the why, but I'd like to kind of just go back in time a little bit for you, Janice, for a moment. In 2019, you're the Executive Director of the California Energy Storage Alliance, something that you had co-founded 10 years earlier. And you leave to launch this Green Hydrogen Coalition. Talk to me about that moment. What led you to it and why?
Janice Lin:
That's a great question. Actually, my journey with hydrogen started much earlier and my first exposure to it was in 2010. I had just formed the California Energy Storage Alliance and a professor from Fraunhofer in Germany came to visit me in my office in Berkeley. And he had this big vision about how someday we're going to use wind and solar to split water and make hydrogen. And we're going to put that hydrogen into gas pipelines and decarbonize everything in the economy. He called it power to X and he had a whole map in it.
Janice Lin:
And I remember feeling like, "Wow, that is a really big vision." And we had just started the California Energy Storage Alliance and I remember when he left thinking to myself, "That is a really big vision and is about the kookiest thing I ever heard." We stayed in touch. He's my hero now. And I haven't had a chance to circle back to tell him. Dial the clock forward we had unbelievable progress and success with the California Energy Storage Alliance.
Janice Lin:
By 2016, we were starting to ask the question, wow, we've made a lot of progress with battery storage, other forms of storage. Renewables are so inexpensive now. They're growing like gangbusters. What's going to happen when we have 80%, 90%, a hundred percent penetration of the lowest cost renewable electricity at the margin, which is wind and solar? And as we know, it's intermittent. You only get it when the wind's blowing. You only get it when the sun's shining. So in 2016 we undertook a modeling effort just for yucks and said, "Let's take the data on the CISO system. This is the California Independent System Operator. And just for fun, let's accelerate and amplify the wind and solar production so that 100% of the demand on the system is met by wind and solar, and plot the deficits and surpluses over the course of a year."
Janice Lin:
And we did that and it was amazing. I think it was in about 10 seconds we looked at this and said, "We're going to need some serious storage. We're going to need multi-day storage. We're going to need weekly storage. We're going to need monthly storage. And ultimately we will need seasonal storage." And as Tony was saying, we've always had seasonal storage, it's called fossil fuels. And at that time for the California Energy Storage Alliance, the largest, most bulk storage we were dealing with in our coalition was pumped hydro and underground compressed air. And that would not be sufficient for a seasonal need.
Janice Lin:
So I started looking around. What are the options? What are the storage options that are being researched? And there is a lot of really exciting research and innovation happening in the energy storage field writ large. So that was an exciting journey. But what I learned in 2016 was that, as Tony was saying earlier, that hydrogen is an excellent form of storage. It's an excellent energy carrier. So I learned that my buddy in Germany at Fraunhofer had been making tremendous progress. And actually there was a lot of progress for hydrogen, especially green hydrogen, all over the world. Many countries were issuing national strategies and plans for how to accelerate it, how to scale it.
Janice Lin:
I realized that in 2009, 2010, it was a little bit of a kooky idea because renewable energy was a lot more expensive. Well, in 2016, the cost had come down a lot, not electrolytic pathways, not so crazy anymore. I learned in 2016 about all these other pathway ways to make hydrogen that could resolve some other societal problems like getting rid of waste, which is also a benefit stream. If you are a hydrogen developer the cost to get rid of waste is also a benefit stream.
Janice Lin:
Anyway, so there was a value proposition. I'm like, "Wow. There is a business value proposition that could be had here." And oh, by the way, this was the center. This little molecule once it's created can do so many things, so many applications. It can displace gasoline for liquid fuels. It can be made into aviation fuel. It can be used for shipping fuel. It can be combusted in a natural gas turbine and therefore repurpose existing infrastructure and meet that seasonal storage need that got me going in the first place. So I'm like, "Okay, for all those reasons, this little molecule is a super game changer."
Janice Lin:
And when I looked at the landscape of what was happening for green hydrogen in the United States, our Department of Energy had been working on hydrogen for a really long time. California had been working on hydrogen for a really long time, but really more narrowly focused on transportation fueling applications. And the conclusion was if we want to achieve the green hydrogen economy, the way to do it is to scale. We got to go big and go fast, drive down the cost and focus just on fueling applications, which is a great marginal high value application. It's good, but it's going to be tough to achieve really rapid, super steep progress on the exponential scaling we need.
Janice Lin:
And so we said, "We think we can make a difference here by focusing on accelerating the green hydrogen economy through this concept of multi-sectoral aggregation. How do we aggregate demand across sectors, which includes transportation applications, but really go after the applications that can scale, go big, go fast, drive down the cost and let the forces of business take over?" Because once you have a value proposition, things just kind of go smoother.
Janice Lin:
So that was the genesis of the GHC. And we felt that having a 501(c)(3) nonprofit enter the field with a focus on a green hydrogen economy will help create alignment among the many different players in hydrogen, the environmental community, the regulatory, the policy communities, and really create the momentum that we need to make that great leap forward. That's my story.
Michael P.A. Cohen:
It's tremendous. I'm always struck in life by these moments and the Greeks had a different word for those moments. Kronos would be their word for time, but they had a whole different term for these moments. And there's always some human story behind those moments. And this one sounds like this meeting with this German and the kooky idea, but the seed from that as you watched the world change and other things develop around that. So that leads you in 2019 to say, "Hey, there's a business proposition here that could accelerate scalability for green hydrogen. The conditions are right. I need to put something together to achieve that." How do you go about doing that? Tell me mechanically why the Green Hydrogen Coalition, why does it make sense, who's in it, and what is it doing to get there?
Janice Lin:
Yeah, that's an important part of the story. So first remember the epiphany was around bulk storage and so step one was to reform the California Energy Storage Alliance's definition of storage to make sure it included hydrogen, and to make sure my board at the time was comfortable with me stepping down and going to do this other thing which had a broader scope. So that was step one. They were very supportive and I'm still an advisor at the California Energy Storage Alliance. But how to get started?
Janice Lin:
And the other influential individual, his name is Thierry Lepercq and he's one of the founding board members of the GHC. I knew Thierry for many years. He was formerly an executive at ENGIE, which is a global IPP, and Thierry had left some time before to start a development company focused on green hydrogen production. He's authored a book called Hydrogen is the New Oil. And I've been watching Thierry and what he is doing in Europe and everywhere else on the planet. How do you get started with project development for a game changing new type of fuel like green hydrogen where there is no market, there is no infrastructure?
Janice Lin:
And so Thierry had started convening stakeholders in the value chain in Europe, just started hosting meetings. And those meetings led to an initiative called HyDeal Ambition. And he was already getting started with HyDeal Ambition, bringing the ecosystem together. And I'm like, "Thierry, what you're doing is fabulous. We need to make progress here in North America." And his advice was, "Janice, just start with a meeting. Just bring people together and then let that be the catalyst for the GHC." And he said, "And you know what? I'll even come to the United States personally to help you kick off this meeting.
Janice Lin:
And that's how the GHC was launched. In October of 2019, we launched our work with a convening, the GHC didn't really exist yet. It was just a convening. And Thierry was one of our guest keynote speakers talking about his experience in Europe and what's happening there. And we invited the heads of all the California agencies that matter, plus the Governor's Office, plus a variety of stakeholders from throughout the ecosystem. I think there were maybe a hundred people in that meeting that day.
Janice Lin:
And I would say it was the first multi-agency. We had the head of the energy commission, our independent system operator, commissioners from the Public Utilities Commission, staff from the Governor's Office, and a good cross section of the value chain and the ecosystem stakeholders in a room for an entire day to talk about green hydrogen. And we had case studies of progress in Europe. We talked about actual projects that were underway here in California. We had a waste of energy, and that was the first time that Marty Adams, the General Manager and Chief Engineer of the Los Angeles Department of Water and Power, publicly presented about their vision to convert a coal plant in Utah as one of the off takers to a green hydrogen combined cycle gas turbine. That was the first public discussion of this concept. And there was enough interest and momentum generated coming out of that meeting that very soon after we formed the GHC.
Michael P.A. Cohen:
Wow. What an amazing story. What barriers have you experienced since forming the GHC to this goal of scaling green hydrogen conversion, production, processing, I'm not sure the right term to use, storage ultimately? Let me just say it doesn't seem like there should be anything else. As I hear you talk about green hydrogen, I'm sort of sitting here wondering why isn't this entire nation in a green hydrogen state currently. So there must be something there that GHC is helping to overcome. And what is it?
Janice Lin:
Yeah, first of all, there are many barriers and we learned a lot about developing markets and how do you make progress with something like energy storage. It's so flexible, it does so many things. And one of my favorite adages is what you focus on is what you get. So a big part of getting started is deciding where and how to focus so that you can achieve early success. And another thing we learned from our decade plus of market development for energy storage is until you actually try to put iron in the ground in a particular location with specific stakeholders and off takers, there are so many things you cannot know. You can only discover it through the process of actually doing it.
Janice Lin:
So this is the philosophy and ethos that we bring to our work at the GHC. We need to be focused and let the goal of infrastructure and project development really scale. Make a goal, shoot the moon, make everything go faster because that's the goal. How do we make progress faster because the planet can't wait for us? So we let the goal of how we get to scale, how do we actually put this green hydrogen economy on the map in a particular place be our guide for how to focus. And that has led us to working closely with in particular Los Angeles Department of Water and Power to go where the off takers are.
Janice Lin:
I think this is something that I also learned from Tony. Where there's going to be a willing taker, there's going to be progress. And to achieve using green hydrogen as a bulk storage solution for electric system reliability, that is where we have prioritized our work. And it falls into several areas. The first thing that we needed to do was create a base level of understanding of what is green hydrogen, how is it used? What are the pathways to make it? And that's been a pretty busy undertaking for the last couple of years, working across all stakeholders, working with legislators, regulators, different folks in the environmental community, policy makers, industry stakeholders, the other proponents of hydrogen that work on different colors of hydrogen. How do we create alignment and greater collaboration?
Janice Lin:
The green hydrogen economy I would say our challenge isn't in technology. Ensure there are things that we need to work on. Questions that need to be answered. I think the biggest barrier to answer your question lies in challenges in working together and constructively working together and objectively to address the valid concerns of multiple stakeholders. And as we address those concerns to work together, to build the legal and regulatory framework and the necessary rules that will make progress happen faster.
Janice Lin:
So that's my long and short way of answering your question. Happy to go into details, but big picture, we got to prioritize where we're focusing, we got to get real specific and we have to work and collaborate with the affected stakeholders like we've never collaborated before. In a way that's respectful, empathetic, and co-creative.
Michael P.A. Cohen:
Yeah. I love that you shared that last point and I'd like to put a pin in it and come back to it in a moment, but detour a little sideways on my screen to Tony for just a minute. Tony, Janice mentioned that creating that I'll call it just a regulatory framework, law being a tool perhaps to get there along with legislation and administration and kinds of policy developments.
Michael P.A. Cohen:
And what are your thoughts about that? Because I kind of have this sense in the current era, and it could be wrong by the way. I'm not asking you to buy into this, but I sort of feel that there are other nations around the world moving much more nimbly and turning much more quickly through their governmental systems and structures to be able to deal with something like this than the system of 50 state governments and a federal government that all seem to be at war with each other in any particular time because we don't hear enough actually about the mass cooperation that occurs. But tell me how daunting is this in America and how do you think about the challenge of creating a regulatory framework for green hydrogen?
Tony Toranto:
Well, thanks, Michael. It's a great question. The process of working on through those kinds of issues with the Green Hydrogen Coalition it has also been elucidating. So let me answer it first by backing up a little bit. As you know, I've known Janice for a very long time. Janice and I went to business school together. And unlike Janice's introduction to green hydrogen which came from one of her heroes earlier on, my introduction to green hydrogen largely came from Janice. We were sitting down over lunch, catching up and talking about what we were doing and she's like, "Green hydrogen. Let me tell you about it."
Tony Toranto:
And she just sort of dove in and went off and I found it incredibly inspiring and interesting, but Janice is also someone who, I can say this as a friend and someone who's known her for a long time, she's had a lot of success building pathways and roads to create things where they didn't exist before. And she did that in energy storage. So watching her and watching the coalition partners and being part of that team ourselves and myself to work through this, it's been wonderful to watch and see these different constituencies come together to kind of do something productive.
Tony Toranto:
So I don't want to be pollyannaish about some of the challenges and I can speak to some of them. I don't want to be pollyannaish about them, but the process that Janice has been leading this broad coalition of people through, that's how work gets done. That's how these kinds of challenges get overcome, because it is complicated. Yes, there are countries, particularly we see some of this in Europe, we see some other developments that are promising in other countries as well, where perhaps they have less complex governmental structure than we do. But on the one hand, like almost anything, most things that you could look at as a strength are also a weakness in other respects.
Tony Toranto:
I think that the diversity that we have across our states, the diverse ways that we deal with things, the diversity and the kind of market that we have also creates a lot of opportunities for learning and a lot of other opportunities for doing things and possibly ultimately doing the better, but it does take time and it takes energy and it takes, no pun intended, but it takes a lot of different are kinds of constituencies coming together to do things. But I think that the type of effort that we have is where that gets done and it happens by the way at a state level. And it happens at a federal level.
Tony Toranto:
So Janice talked about the Green Hydrogen Coalition and has talked a lot about that. And there is an important role that once you're involved in this process you have to understand how advocacy works at different kinds of levels of government and different kinds of engagement and participation. And that is happening. But as Janice said, part of it also results or requires that someone actually do something, build something. And that can also form a catalyst for trying to bring people together to do something productive together and find common ground. And in that respect, that goes to the conversation Janice said before about it kind of takes an off taker. Well, you can think of an off taker, that's a technical term in the energy sector. What it actually kind of means is a customer. Someone's got to take your stuff. Someone's got to buy your product.
Tony Toranto:
So if you have a customer for a product, in this case, a customer is someone that actually wants to buy green hydrogen, well, then you can coalesce a lot of different people around trying to realize that vision, make something happen there. And so that kind of notion and inspiration from some others has kind of led to that HyDeal initiative that Janice has been also helping to lead to try and create this center for actually providing large scale green hydrogen at scale to try and bring prices down as such and get constituencies together. That kind of stuff on the ground will help work through a lot of the other kinds of legal challenges that come up, because they do exist.
Tony Toranto:
And for example, if you go through any of these different scenarios, you'll find that some of those scenarios in vision, pipelines that would connect a source of production of green hydrogen to a place where green hydrogen can be used. Well, pipelines don't just emerge. They have to be built. They have to go across different places. They cover sizable amounts of land. They also have to be engineered, designed for specific purposes.
Tony Toranto:
And so you have to think through those issues. They involve practical issues, the nuts and bolts on the ground. They involve jurisdictional issues, getting back to your question about legal issues and perspectives. There are also issues that get involved very often if you want to create something new about rate making and structures that happen, or how you set up the kinds of government frameworks that allow the benefits of something to be realized, because it's like anything else. The first time you do something the lift off the first time can actually be more expensive. But after that, the cost can come way down.
Tony Toranto:
Sometimes the government can play a role in helping to assist something to actually take off so that it can get to the point that the real benefits can be realized at scale. And in that respect, there are a lot of different kinds of legal issues. Those kinds of rate structures happen in the legal framework. There are a lot of different kinds of considerations both at the state and federal level that come together. But it's the type of working group that Janice has been putting together that really makes those things happen.
Tony Toranto:
Yes, it involves lawyers and folks like me and we have some other partners at Sheppard Mullin, in particular, Mark Sundback is our regulatory lawyer. Elliot Hinds is another project lawyer who's been working very closely with us and with Janice and with others on these kinds of issues. But it also really involves a lot of businesses as stakeholders and community members that have lots of different perspectives across a broad range of issues. And it involves engagement at local, state, and federal levels with government officials and policy makers. All of those kind of come together in a pretty broad college.
Michael P.A. Cohen:
I loved your point about the fact that there's some potential that the governmental structures in North America and perhaps the United States in particular provide a whole lot of sovereigns for laboratory experimentation in this area where something might catch hold and then spread like wildfire. And that is certainly sort of a benefit of the American regulatory experience. In the past we have seen that in a lot of areas and maybe we'll see it here.
Michael P.A. Cohen:
Janice, I'd like to come back in the very short minute I have left with you before we wrap up. And to that pin, I put in your wrap up point about stakeholders and empathy, and you use that term empathy. And I just want to come back to that because green hydrogen stands to be such a game changer, that it could displace so much current industry and infrastructure as we are currently organized around mobile fuels and storage from things we dig up in the ground?
Janice Lin:
Yeah, I specifically mentioned empathy because anytime you're trying to do something different and new, by definition, there's a status quo. And by definition, the people who've been involved in that status quo also have a history. There's a history of fossil fuels in this country. And what's interesting about hydrogen is that on the one hand it's an amazing game changer for fighting climate change and displacing fossil fuels, but it's also something that can be used in existing infrastructure. It's becoming part of the business model of some of these new fossil fuel entities. And so it can be triggering and raise issues and trust issues.
Janice Lin:
And I think we have an opportunity with green hydrogen to have a conversation about its role going forward, a conversation that's more constructive, more open, respectful of what's come before us and the history and in particular, how many communities have suffered in areas where there was a lot of fossil fuel use, and together create a pathway forward that prioritizes and restores those communities. That's also win-win for business and finds a way to create jobs and keep the economy going and ideally be pie expanding so we can be exporting this stuff. Because we are blessed with those factory resources here in the country, we should be exporting green hydrogen to Japan and South Korea, and give Chile and Australia a little competition.
Janice Lin:
So this is the spirit by which we're approaching it. And we can't do this great leap forward in this new market without your help Tony. Back to the question of legal and regulatory frameworks, those frameworks are useful in so far as they can produce certainty and encourage at the end of the day significant private investment. And very good market design maintains that perspective. And you need to understand how energy transactions work, what are the concerns of investors, what are those terms and conditions. At the same time, have a deep understanding with how statutory law drives regulatory frameworks and how those are implemented.
Janice Lin:
So from the GHC standpoint, our work with you Tony and Elliott and Mark has been a game changer for us in thinking how to more effectively and efficiently create that legal and regulatory framework that will attract large volumes of private investment. That's where we'll really see things truly take off.
Michael P.A. Cohen:
So wonderful. Janice, one final question for you before we wrap up, if you were to look at the international game board, which geographic market do you think is furthest ahead in green hydrogen progress I'll say?
Janice Lin:
Boy, there's so many areas. I'd like to give a lot of regional awards for different reasons. I think definitely Europe with Germany, definitely from a legal and regulatory standpoint, number of projects, innovative projects including lots of progress in providing the right incentives even to convert maritime shipping and aviation. We need to up our game here to make sure that there's a place that the zero carbon ships and airplanes can refuel here in North America. So Europe for sure. And I would like to credit Dr. Sterner that Fraunhofer scientist because they had the vision really a long time ago.
Janice Lin:
Germany has passed some transitional legislation that'll really get the hydrogen infrastructure going that's needed to make sure it's very low cost. Australia has been working on hydrogen for a very long time. They were one of the first to release a national hydrogen strategy. They're all about export and making great progress and indeed starting to export hydrogen to Southeast Asia. And Chile, boy, they have a vision to be the lowest cost producer globally and they're competing with Saudi Arabia. So we'll see.
Janice Lin:
But there is an international race and it's our intention to put the United States in that race too. And we're so excited about the leadership from the Biden administration and the Department of Energy. I think it's worth noting that Secretary Granholm said we're going to release a series of what they call Earthshots to really up our game in clean energy. And the very first Earthshot is a hydrogen Earthshot. So big shout out to our federal government. I think we're going to give the rest of the world a run for the money.
Michael P.A. Cohen:
I love hearing that when such a wonderful wrap up. I do like to remind or at least hit the point in our show that nobody really has the ability to stand still on the planet today. There are too many international races or so many international races I should say. I don't think there are too many. I think there are so many that the world just has to strive towards some common goals. And this sounds like a super goal to coalesce around, done the right way as you point out Janice and Tony.
Michael P.A. Cohen:
Thank you both so much for your time today. It was so wonderful to have you on the show Janice Lin and Tony Toranto.
Tony Toranto:
Thank you.
Michael P.A. Cohen:
Well, that's it for this week folks. As we turn into the fall season and Q4, we will begin our regular guest checking in Asia, the Americas, Europe, and Africa to learn what regulatory issues are on the horizon that our multinational audience needs to know about so please stay tuned. Until then, as always, be well.
Contact Information:
Janice’s Bio: https://www.ghcoalition.org/janice-lin
Tony’s Bio: https://www.sheppard.com/ttoranto
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