Energy Capital The Magazine Nov 2021-Edition 06

FOR INFRASTRUCTURE DEVELOPERS, INVESTORS AND INDUSTRIAL USERS

Industrial manufacturing trends for 2022 • Failure prediction, key enabler of the energy transition •How a cryptocurrency brings together P2P energy, solar and blockchain tech • CCUS, critical for the net-zero journey • Best pathways to electrify commercial fleets

BRENT JOHNSON, Are you ready to electrify your commercial fleet?

Energy Capital Magazine

OPINION 6 | Energy Capital Editorial 8 | Rubi Alvarado Industrial manufacturing is facing challenges that increase the need for digitalization and automation technologies adoption. In fact, only the companies able to add flexibility, resiliency and sustainability to their operations will ride the wave towards the new economic panorama.

10 | Aldo Santillan Failure prediction is not a fancy add-on to industrial operations, is a key enabler for the energy transition and a must have for operators. Among its benefits there are bigger financing opportunities and decreased maintenance costs.

12| Analysis Energy Capital The energy transition has multiple facets. It not only involves decarbonizing electricity via wind or solar energy.

Indeed, it entails efficiently operating at different industry levels, tackling challenges, and leveraging opportunities, especially in the socalled hard to abate sectors.

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18 | Dr. Neeraj Gupta, Battelle The path to carbon neutrality is not a singular one. It comprises a multitude of routes because it’s simply not viable to develop climate resilience with one solution. There are several strategies for getting to net-zero emissions, CCUS is becoming a vital one.

USERS 24 | Aoutman Amezouy, Avi Shane Verdugo, Candela Coin Peer-to-Peer energy trading, blockchain technology, renewable energy, and a cryptocurrency called Candela Coin, what do they all mean and why should we care about it? For starters, the current state of energy distribution is highly antiquated and due for an overhaul…

MIDSTREAM 30 | John R. Durand, XRI Holdings LLC Building a sustainable Water Management Infrastructure Company for the 21st Century. XRI is the leading full-cycle water management and produced water midstream company, with advanced water recycling and sustainable water infrastructure…

Table of Contents

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Energy Capital Magazine

DOWNSTREAM 36 | Doug Berven, POET Another Chapter in the Development of Bioprocessing: POET’s Acquisition of Flint Hills Resources.

On June 1 2021, POET, the world’s largest producer of biofuels and a leader in the development and production of renewable bioproducts, made the largest acquisition in biofuels history by purchasing the biofuel assets of Flint Hills Resources, which included six bioprocessing facilities and two terminals.

POWER 42 | Brent Johnson, Sage Energy With electric vehicles on track to be the majority of passenger cars and buses by 2040, there are several ways to plan for and deploy your electric fleet. Read about best practices and pathways to reach electrification of your fleet.

Contact Information MANAGERS Rubi Alvarado – General Manager Aldo Santillan – Managing Director & Editor in Chief Noe H. Saenz – Editorial Board Chairman DESIGN Gonzalo Rivas – Senior Designer Aleysa Sanchez – Senior Designer Cristian Martinez – Digital Strategy Ivan Ledezma – Digital Strategy EDITORIAL STAFF Eduardo Medina – Editorial Analysis Saul Olvera – Editorial Analysis Paola Sanchez – Editorial Analysis Elizabeth Garcia – Editorial Analysis EDITORIAL BOARD Christine Spiro – Member (Our Energy Manager) Todd C. Frank – Member (Burns & McDonnell)

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

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Editorial Letter

Driving change through innovation,

industries keeping up with a transitioning economy Dear Reader It is a great pleasure for us to bring you our new Issue of Energy Capital The Magazine, the very first publication with an integral approach on every sector of the energy industry in North America, and especially designed for infrastructure developers, decision makers, investors and executives.

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n our November Issue we review the challenges and opportunities for industrial users facing the energy transition, and the deep changes in regards to commodity use, prices, and its impact in production lines.

Indeed, as the energy transition came, natural gas transformed into the bridge towards a less carbonized economy.

Through the use of this commodity, heavy industries like cement and steel manufacturing, also power generation, headed towards cleaner operations.

However, the switch to natural gas created a huge demand that, on top of geopolitical events, like the phasing out of coal in China, and the commission of the Nord Stream 2 pipeline, skyrocketed its prices, pushing industries to switch once again to coal or oil.

Indeed, this last couple of months have been challenging for industries around the world. Nevertheless, new technologies like carbon capture, and new financing and energy purchasing schemes are allowing companies to keep up with the transition by bringing new solutions like the use of nuclear energy for crypto mining, for example, the use of solar and wind energy for data centers, or the display of carbon capture solutions, to name a few.

In this issue you will learn how and why carbon capture has become a key enabler for development, and a critical component of the journey to net-zero. You will also dive into new financing schemes like peerto-peer energy, and how it is enabling blockchain technology and renewable energy thrive together.

Furthermore, you will read about new advancements in water management, and how a sustainable approach to it can truly advance cleaner operations, in order to reach faster climate targets, particularly for the midstream industry. A sector that has true challenges ahead as a good number of key projects got cancelled, and many other are under strong scrutiny.

On the other hand, you will have an overlook of the latest and most important events worldwide that are shaping the heavy industry economic panorama, and how companies are riding the wave in order to survive in a highly disrupted market.

Finally, but most importantly, you will read about the most efficient strategies for

vehicle electrification, and how top companies of the sector are approaching the issue. Specially as new technologies like semiconductors or even fuel cell vehicles and biogas are opening new commercial doors, and creating a diverse market. Do not miss our opinion columns by our board members, speaking about the importance of failure prediction, industrial manufacturing tends, and more!

So, without further due we present to you our November issue of Energy Capital The Magazine, and do not forget to reach us out on our social media. Also make sure to follow on our daily news forecast and newsletters on our website to stay informed about the latest occurrences of the energy sector in North America. Welcome!

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Opinion

Four challenges in industrial manufacturing facing 2022 During the Rockwell Automation Fair, the company’s CEO, Blake Moret, said that indeed flexibility will be an essential component for survival in this new economic panorama. The fact is that production lines are changing rapidly; market demands are shifting at a pace that manufacturers cannot always keep.

By Rubi Alvarado

Increased need for Digital solutions

General Manager, Energy Capital Magazine

As a result, there is a surging need for the adoption of automation and digitalization technologies. The connected enterprise enables the rapid shift from one assembly line to another, with zero downtime in production. Consequently, manufacturers keep up with demand changes without losing millions.

Juniper Research has projected that during 2021 there will be a 17% year-on-year increase in spending on Digital Twins technology, and such an increase will be driven chiefly by manufacturers.

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he entire industrial manufacturing sector, from Food and Beverage to Steel and Cement, has been materially affected by the pandemic. Supply chain shortages and disruptions, commodity volatility, and raw materials surging demand after the vaccine rollout are only some of the factors at play.

The Automotive industry faced truly disastrous drop-offs in production after severe shortages of steel and other components, like semiconductors, during 2020 and 2021. Also, paper products producers and other industries that rely on chemicals have had difficulty maintaining shelves stocked.

As a result, there are a good number of challenges that the industry is facing right now. Some of these challenges will be so demanding in the near future that only the companies able to add flexibility, resilience, and sustainability to their operations are the ones that will survive.

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Cybersecurity However, the increased adoption of digital technologies must come in parallel with solid cybersecurity standards. Between the asset and its digital representation, there’s a massive amount of data. If that data is not managed carefully, or if IT and OT teams do not work collaboratively, a breach will surge, one that cybercriminals could potentially exploit. A cybersecurity incident, or even worse, a ransomware attack, can altogether disable operations and disrupt the production entirely. A recent report from TrendMicro found that

84% of US organizations have reported phishing or ransomware incidents in 12 months.

augmented or virtual reality technologies for remote or “smart” maintenance could be helpful for companies to keep skilled workers close.

Skilled workers shortage Furthermore, adopting strong cybersecurity measures may not be enough, as frequently, a cybersecurity incident comes from the company’s personnel. Let’s take the case of the Colonial Pipeline, for example. The breach came after an employee set a password without third-party authentication; a batch of passwords from the company had been leaked, and when the employee entered the password, he opened the door for the attack. Consequently, highly skilled personnel is paramount for any manufacturing company. Still, Covid-19 imposed physical distancing and remote work as the new normal. This means that skilled technicians and personal are not always available on-site to conduct changes in production lines, which in turn widens the gap for incidents. Establishing

Commodity volatility Finally, but not least important, the energy transition increased the demand for natural gas worldwide like never before. Big economies like China switching from coal to natural gas and midstream projects stalled finally created the perfect mix for an energy crisis, as supplies couldn’t keep up with the demand. Domestically, the US has remained strong as it fulfills its demand with its production. However, in Europe, many manufacturing companies are at the threshold of bankruptcy. Consequently, staying ahead of commodity volatility and disruptions through long-term agreements for natural gas or LNG will be crucial for a modern and resilient business model.

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Opinion

Failure prediction technologies, a must-have for energy operators A failure prediction system can prevent serious ecological hazards, save lives, and increase a company's attractiveness for investment.

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

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uch has been said about the importance of adopting cleaner energy sources; from decarbonized electricity to the repurposing of refineries for biofuels production, the energy transition is undoubtedly transforming the needs of energy developers and operators.

However, changing from a particular energy source to another also means changing infrastructure, a much more challenging task as it requires transforming the generation, transmission, and distribution assets.

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Such a transformation would be particularly hard for the oil and gas sector since much of the oil pipelines and refineries across the U.S. are nearly 100 years old. As a result, another need in the energy industry has risen: to toughen and strengthen the existing infrastructure.

Failure prediction is a solution for that. In an increasingly digital and interconnected world, people rely more and more on uninterrupted electricity. However, aging assets can be a hazard for that. Moreover, power outages can severely damage the economy. According to the Energy Information Administration, power outages cost the U.S. economy $28 billion to $169 billion annually.

Decades-old infrastructure, in addition to increased environmental threats, can lead to configuration maladies or fully adverse performance. However, there are many factors at play during a power outage;

geography, weather, condition of the cables are just some of them. Such several factors lead to a lot of variables and uncertainty.

And that is precisely where failure prediction comes in handy.

Through digital tools and self-learning software, a failure prediction system can close the gap of uncertainty, assuring service reliability while providing the operator with valuable information of the condition of the assets, as many times, aging does not follow a linear process.

Therefore, a failure prediction system, equipped with high-end sensors and controls, reduces the failure rate and produces data so the operator can know where it is coming from. Moreover, the system can alert the operator before the failure happens through Digital Twins and other digital asset solutions.

For example, in the case of wind turbines, or motor-driven machines, an early sign of failure is the increased power draw. Such an increase would happen before the turbine

starts overheating. A failure prediction system would alert the operator of that increase and predict future failures assessing and processing data.

As a result, the overall reliability of the asset increases, directly reducing financial, regulatory, and environmental risks. This would be particularly relevant in high-risk assets, such as mines underground or offshore oil platforms.

In California, the combination of dry heat with high wind speeds, added to the malfunction of an electrical asset, can spark a deadly wildfire.

Consequently, by adopting a failure prediction system, a company attracts investment attention, improves financial performance, and maintains high ESG standards.

Furthermore, a company could benefit from reaping performance incentives from regulatory authorities instead of paying fines due to failures.

As for the environmental, social, and governance standpoint, a failure prediction system could save workers' lives and prevent severe ecological hazards like fires, or oil leaks, which causes lawsuits and several other problems. That's why the adoption of this technology is so relevant today.

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Analysis

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Industrial users: challenges and opportunities in the energy transition

By Energy Capital

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he energy transition has multiple facets. It not only involves decarbonizing electricity via wind or solar energy. Indeed, it entails efficiently operating at different industry levels, tackling challenges, and leveraging opportunities, especially in the so-called hard to abate sectors.

We particularly refer to the heavy industry, including cement, steel, chemicals, and heavy-duty transportation.

Industrial activity in these sectors is more challenging to decarbonize as it is less heavily reliant on electricity.

According to Energy Transitions Commission's "Mission Possible: Reaching Net-Zero Carbon Emissions from Harder-to-Abate Sectors by MidCentury" report, heavy industry accounts for 10 to 16 gigatons of carbon dioxide emissions globally, and 30% of the total CO2 emissions.

Consequently, green hydrogen, biofuels, long-duration energy storage, and even carbon offsets and carbon credits have risen as alternatives and pathways for making this transition more feasible. Circular economy and energy efficiency efforts have also become relevant in this context.

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Analysis

An overview Across North America, hard to abate sectors face multiple challenges when adopting energy transition efforts. The first is investment, and the second one, infrastructure development at scale. The upfront costs for developing carbon capture infrastructure, installing long-duration batteries at a great scale could make a company less profitable in the short term That's why the industry has launched several efforts, in both the private and the public sectors, to boost investment and spur infrastructure development at scale, with less impact for the companies.

One of the most recent efforts of this kind was announced by TotalEnergies, Air Liquide, VINCI, and a group of partners back in October. They sponsored the creation of the world's largest fund exclusively dedicated to clean hydrogen infrastructure solutions. The fund aims to reach 1.5 billion euros to accelerate the growth of the clean hydrogen ecosystem worldwide, especially in North America, Europe, and Asia.

Moreover, the fund has already reached 800 million euros of investment pool, intending to reach 1,5 billion. However, with the support of public policies and other public entities, the fund aims to support green hydrogen projects with a total value of about 15 billion euros.

Specifically for North America, Shell, the oil giant, is pushing the creation of a Carbon Capture and Storage (CCS) hub in Alberta. Such a hub involved the Polaris CCS project, one of Shell's largest, with a capacity of 300 million tons of CO2 captured over the project's life, only on its first phase.

The second phase of the project involves the creation of an industrial hub to help companies surrounding Shell's energy and chemicals park of Scotford, in Alberta. When fully operational such 14

a hub would capture more than 10 million tons of CO2 from other users each year.

Specifically in the United States, back in June 2021, Bakken Energy and Mitsubishi Power entered into a strategic agreement to create a world-class clean hydrogen hub in North Dakota. The hub aims to develop a series of facilities to produce, store, transport, and consume clean hydrogen, particularly the blue hydrogen type.

The project will produce hydrogen using natural gas, capturing and storing the CO2 emissions related to its process. It would serve industries in North Dakota. However, at full development, it would be connected through a pipeline to another hub in Utah, serving a greater area. Paul Browning, CEO of Mitsubishi Power, said about it: "This is part of our strategy to bring decarbonized hydrogen throughout North America to customers in the power, transportation, and also industrial sectors."

The challenges The main argument against the decarbonization of the industrial sector is money. Right now, it is too expensive for companies to invest in new manufacturing processes, the repurposing of old plants for them to run on cleaner fuels. In fact, if a company today invests in decarbonization, but its competitors do not, that company could suffer financially, as near-term ROI and rising commodity prices are adding pressure to industrial users.

The Mission Possible report argues that companies should transfer that cost to their customers, an idea that Jens Burchardt, BCG's global expert on climate change and co-founder of the Center for Climate Action, supports. However, the increases could be too much to bear.

The study calculates the relative costs in regards to the energy transition. For cement manufacturing, such a cost could be around a 100 dollar increase

per ton of cement, which would be a 100% increase.

For steel manufacturing, the cost per ton produced would be 120 dollars, a 30% increase. For the shipping industry, the cost would be around $4 million per bulk carrier voyage.

However, the report also highlights that "the additional cost of decarbonized heavy industry and heavy-duty transport would only be 0.5% of global GDP by mid-century. The cost of running a net-zero-CO2-emissions economy would be well less than 1% of GDP." In addition to those increases, there are the commodity prices rising—particularly natural gas. In Europe, natural gas prices rose to multiyear highs in late September, threatening heavy industries in the U.K. to stop production. Norway's Yara International said it would have to cut 40% of its European ammonia production due to the spike in prices. After that, U.S. company CF Industries 15

Analysis

said increasing costs prompted it to halt operations at two of its British plants.

By October 1, 2021, prices reached an all-time record of 97.73 euros per megawatt-hour (MWh) on the Dutch TTF Hub, closing a year's increase of 400% in Europe. In Asia, the increase was 175% in Asia and almost 100% in the U.S. As a result, British Steel, the U.K.'s second-largest steel producer, said it was maintaining normal production levels. However, the energy price made "it impossible to profitably make steel at certain times of the day." The price spike hit profitability and the availability of certain goods, like CO2 for the Food and Beverage industry. To produce CO2 high amounts of natural gas are needed.

Consequently, meat processors, beer and drinks manufacturers in the U.K. reached out for help from the government. Companies warned that if CO2 production remained at such low levels, they would have to cut production. The British 16

government announced a deal with CF Industries to restart CO2 production in the U.K to alleviate the shortage. However, the prices of the supply would increase sharply, Britain's environment minister said.

In conclusion, to adopt certain technologies that would decrease the environmental footprint of heavy industries, a lot of investment is needed.

Capital that is not always available for companies to inject, especially when commodities vital for their everyday production, like natural gas, are boosting prices to the moon.

Consequently, public policies, solid regulatory frameworks, and government support would be vital for the heavy industry to get near to a transitioning environment. In this regard, the Mission Possible report points out some ideas that would help achieve scale, drive down costs and increase adaption of new energies in hard to abate sectors.

Some of those are: • Creating strong incentives for decarbonization, including energy efficiency, materials efficiency, and circularity.

• Designing carbon pricing to avoid effects of international competitiveness.

• Coordinating international policies and regulations on materials efficiencies and taxation.

The opportunities Finally, industrial users have several opportunities out there in the market they can leverage to create growth from disruption despite the challenges ahead. Those opportunities are both in the public and the private sectors.

Experts from McKinsey point out that examples of such opportunities in the public sector include the European Union's emission allowances (EUAs); guarantees of origin (GoOs); the adoption of first-generation biofuels known as fatty acid methyl esters (FAMEs); used cooking oils (UCOs) acting as a feedstock for second-generation biofuels; white certificates such as France's certificats d'économies d'énergie (CEE), or the energy efficiency credits and tax waivers that operate in the U.S. for clean fuel adopters.

In this regard, the creation of renewable carbon certificates and biofuel-ticket trading desks have spurred. Particularly the oil and gas industry has developed biofuels trading desks dedicated to feedstocks such as vegetable oils and other

waste oils. Consequently, there's a new line of fuel sources and a new cleaner fuels supply chain.

This is a key opportunity for heavy industry companies to secure power purchase agreements, risk management solutions, and lower-carbon fuels supply. In fact, many utilities are rapidly expanding into this area, helped by renewable energy developers.

Finally, the adoption of energy efficiency and advanced analytics solutions can make the difference between profitability and risk of capital shortfalls. These technologies not only help to the creation of circularity within the company's capital structure but also enables the optimization of processes for better use of energy.

In fact, according to Mckinsey experts, the deployment of advanced analytics can lead to a reduction of more than 30 percent in costs.

Moreover, day-to-day productivity, automated processes using advanced analytics engines can enable a 90% gain.

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Analysis

Why carbon capture, utilization and storage technology is a critical component of the journey to net-zero emissions The path to carbon neutrality is not a singular one. It comprises a multitude of routes — because it’s simply not viable to develop climate resilience with one solution.

There are several strategies for getting to net-zero emissions and Carbon Capture, Utilization and Storage (CCUS) technology will be one of the most vital.

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By Dr. Neeraj Gupta, Technical Director of Carbon Management for Battelle

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n fact, Dr. Fatih Birol, executive director of the International Energy Agency (IEA) said “reaching net-zero emissions will be virtually impossible without CCUS.” Increasing faith in CCUS is based on the considerable progress made in the U.S. over the last two decades under U.S. Department of Energy (DOE) funded programs and similar global efforts. In addition, clarity on the use of incentives, like 45Q tax credits, is creating a growing movement toward commercial deployment of proven CCUS capabilities that are safe, effective and efficient. It’s now imperative that we ramp up the development and scaling of this cuttingedge technology as part of the overall strategy to reach net-zero.

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Analysis

CCUS is a Key Component of a Sustainable Energy Portfolio As the world works to shift to clean energy, we must be realistic about what’s possible. Fertilizer, oil and gas production and operating power plants, refineries, and steel mills emit large quantities of carbon. These processes are also an important foundation for industry, jobs and equitable access to energy. All must be adapted to run on cleaner energy, but doing so will be challenging, costly and lengthy — which is where CCUS can help.

CCUS technology can help bridge the gap during energy transition and reduce the emissions from these processes while energy storage and renewables ramp up to meet demand, and it can also be a component of an equitable and sustainable global energy portfolio.

CCUS captures and safely stores carbon emissions in underground reservoirs or uses them for other purposes to produce oil with lower carbon impact.

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Analysis

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Natural gas producers can implement CCUS to capture emissions while increasing their use of clean hydrogen and enhanced oil recovery (EOR), and other utilization technologies can reduce overall emissions in the oil and gas industry as the larger energy transition takes place.

CCUS also has an increasing role in hydrogen energy, biomass use with CCS, and carbon dioxide removal with direct air capture or nature-based solutions. A common requirement for all CCUS pathways is the availability of secure CO2 storage reservoirs for large-scale storage over multiple decades of operations and retention over geologic time scales. This is where the geological sciences and oil and gas industry practices play a critical role.

Meaningful Advancement of CCUS Technology is Well Underway In June, Battelle and its partners successfully concluded CCUS research for the Midwest Regional Carbon Sequestration Partnership (MRCSP). More than two million tons of CO2 was effectively and safely captured and sequestered in three phases between 2008 and 2019, and many of the vital lessons learned from this 20-year project are now being applied to a number of commercial projects. Battelle, the Illinois State Geological Survey and other team members are building upon the knowledge gained to head-up the Midwest Regional Carbon Initiative (MRCI), a DOE-funded project to further advance CCUS research by addressing key technical challenges, obtaining and sharing data to support CCUS, facilitating regional infrastructure planning, and performing regional technology transfer. Similar regional

partnerships and succeeding regional initiatives funded by the DOE across the U.S. are paving the way for commercial deployment.

The MRCI program spans 20 states from the Midwest to the East Coast and covers more than one-third of the nation’s CO2 point sources. The MRCI is working to scale up CCUS acceptance and deployment and its efforts will ultimately serve as a blueprint for the critical expansion of commercial projects, both stateside and abroad.

These efforts are crucial as the UN IPCC report estimates we must remove anywhere from 100 billion to a trillion tons of carbon already in our atmosphere by the end of the century, depending on how much more we keep on putting into it. To do this, we must advance more DOE-funded programs geared toward deploying CCUS throughout the country and enhance policies to enable national CCUS deployment. According to a September 2021 IEA report, up to $160 billion needs to be invested in CCUS technology by 2030, a ten-fold increase from the previous decade.

There are many paths to net-zero emissions, and CCUS must be deployed alongside other technologies such as energy-demand management, decarbonization of electricity, electrification of energy end use, reductions in agricultural emissions, and carbon dioxide removal (CDR) measures, to help ward off worsening climate impacts. We must advance CCUS now because it has a direct impact on emissions reductions in key sectors where they’ve been historically hard to abate.

Achieving carbon neutrality is essential as we work to foster climate resiliency not only in the U.S., but across the globe.

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Users

Peer-to-Peer energy, and how Candela Coin will bring it to you Peer-to-Peer energy trading, blockchain technology, renewable energy, and Candela Coin, what do they all mean and why should we care about it? Well for starters, the current state of energy consumption and distribution is highly antiquated and due for an overhaul; and the need for an alternate solution to meet the needs of the people is right around the corner.

By Aoutman Amenzouy, Chief Technology Officer, Candela Coin

By Avi Shane Verdugo, Chief Executive Officer, Candela Coin

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he current state of energy transference is poised for drastic change, but in order to accept that change we need to understand yesterday’s, today’s, and tomorrow’s state of energy commerce. In the past, utility companies held all the cards when it came to the acquisition & sale of energy. However, current technology has introduced a new era of prosumers and peoplecentric energy markets.

These prosumers have paved the way for Peer-toPeer (P2P) energy transference and the potential for ‘off the grid’ utility services. With the practice of sharing energy between consumers, it has made the cost of P2P energy trading much lower than conventional utility company power distribution.

This fact alone has made the concept of consumercontrolled energy a very touchy subject amongst

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Users

utility market leaders. Through the advent of blockchain technology and decentralized markets, we have now found ourselves at a turning point in how we consume and sell energy.

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THE CURRENT STATE OF ENERGY TRANSFERENCE IS POISED FOR DRASTIC CHANGE, BUT IN ORDER TO ACCEPT THAT CHANGE WE NEED TO UNDERSTAND YESTERDAY’S, TODAY’S, AND TOMORROW’S STATE OF ENERGY COMMERCE. As of now, the biggest and most prominent form of prosumer energy acquisition has been solar technology. Solar panels have been seen far and wide across rooftops in every nation; even to the degree of privatized companies creating ‘solar farms’ in order to harness the vast amount of renewable energy that the Sun provides.

Candela Coin has positioned itself on the forefront of P2P energy trading by harnessing blockchain technology and decentralized commerce. Far too long have the utility companies held market share and influence on how energy is acquired and sold.

New technologies and opportunities are being created everyday that challenges this ‘status quo’. Candela Coin is a newly developed means of sharing

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Users

THE IDEA OF ALLOWING PEOPLE TO ACQUIRE AND SELL THEIR OWN ENERGY WITHOUT THE GOVERNANCE OF UTILITY COMPANIES IS A DISRUPTIVE CONCEPT, AND ONE THAT WOULD GIVE PAUSE TO INDUSTRY LEADERS AND CONFORMATIVE CONSUMERS ALIKE.

energy with the masses and paving the way for an ‘off the grid’ form of energy commerce.

Through the vast potential of crypto markets and a decentralized economy, Candela Coin is utilizing its proprietary blockchain protocol to reap the rewards of renewable-energy cultivation, and share it with the people.

The idea of allowing people to acquire and sell their own energy without the governance of utility companies is a disruptive concept, and one that 28

would give pause to industry leaders and conformative consumers alike. The Candela Coin project is growing fast and aimed to redefine the renewable energy playing field. In order for any new idea to gain notoriety and to be taken seriously, it first needs to demonstrate itself as a better alternative.

Currently, prosumers who harness extra solar energy through solar panels, are only given the options of selling the energy back to the utility companies for pennies on the dollar, or storing the energy in expensive

THERE IS A GREAT DEAL OF INFORMATION TO TAKE IN ON HOW THIS ALL WORKS, BUT THE BENEFITS OF ACCEPTING A NEW WAY TO LOOK AT ENERGY ACQUISITION AND COMMERCE, CLEARLY OUTWEIGHS THE PAINS OF CHANGE. battery energy banks that they would have to supply on their own. However, it’s wise to know that the practice of developing a P2P energy market isn’t entirely a novel practice.

Professor Verena Tiefenbeck, of the Swiss Federal Institute of Technology, has spoken at lecture describing the January 2019 venture in creating Switzerland’s first local P2P electric energy market, titled project Quartierstrom; which consisted of 37 households in total and

grew the energy self-sufficiency of the community by double!

There is a great deal of information to take in on how this all works, but the benefits of accepting a new way to look at energy acquisition and commerce, clearly outweighs the pains of change. Armed with its blockchain protocol and soon-to-be released solar panels, Candela Coin will herald a new way of how the people can own, share, and sell energy.

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Midstream

Building a Sustainable Water Management Infrastructure Company for the 21st Century

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By John R. Durand President & Chief Sustainability Officer, XRI Holdings, LLC. john.durand@xriwater.com www.xriwater.com

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n our position as the leading full-cycle water management and produced water midstream company with advanced water recycling and sustainable water infrastructure, XRI operates over 350 miles of permanent pipelines, with an aggregated system capacity to transport approximately 1.75 million barrels per day. As a result, XRI is transforming the water midstream industry by focusing on the recycling of produced water, reducing industry reliance on potable water sources, and providing ESG-focused solutions for the benefit of all stakeholders.

Earlier this year XRI completed a strategic acquisition of the produced water infrastructure assets of Hibernia Energy III, LLC’s Celtic system. Through this transaction, XRI became the long-term provider to Hibernia of all water-related services to Hibernia, including delivery of completions water and handling of produced water. The footprint and asset infrastructure of the Celtic assets directly overlay XRI’s existing midstream infrastructure and recycling assets in the Midland Basin, an area where XRI has significant operating expertise and deep customer relationships that further support commercialization of the acquired produced water infrastructure assets.

XRI is on pace to recycle and reuse approximately 250 million barrels of produced water annually throughout its extensive infrastructure footprint in the Midland and Delaware sub-basins of the Permian. By the fourth quarter of 2021, XRI’s recycling and reuse of produced 31

Midstream

water will expand from its current levels to approximately 800,000 barrels per day. XRI’s infrastructure asset and distribution infrastructure uniquely positions the company to meet our customers’ growing demand for treated produced water for their operations and resource development. Each of our systems throughout the Midland and Delaware basins operate, as an industrial water utility, enabling XRI to employ what we refer to as Water Exchange TerminalsTM. By utilizing and building upon our distribution infrastructure XRI is positioned to: • Take produced water from multiple customers, treat and recycle that water and redeliver that water back into our pipeline supply systems • Subsequently transport additional produced water supply to our large-scale treatment systems, thereby providing increased efficiencies, both operationally and economically • Redistribute recycled produced water to multiple operator customers to provide sustainably sourced supply across our pipeline infrastructure footprint Industry stakeholders benefit because produced water once viewed as a waste product now turns into treated, reusable water for multiple customers along our distribution systems and associated Water Exchange TerminalsTM. Even more importantly, the environment and surrounding communities benefit since the produced water utilized is principally ‘incremental water’ that is brought to the surface with the production of hydrocarbons.

As more produced water is recycled and reused, fewer groundwater resources will be required going forward. In 2021 alone, XRI’s operations will protect more than 400 million barrels of freshwater aquifer depletion.

An integral part of XRI’s mission from its founding was and is to construct large diameter, buried water pipeline infrastructure providing the safety benefit to local communities of removing thousands of daily truckloads from the roadways with the dual advantage of minimizing traffic hazards and reducing CO2 emissions. This year XRI’s operations will result in the avoidance of 225,000 metric tons of CO2.

Founded in 2013, XRI became the first mover in the industry to create an independent water midstream company and set a trajectory

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Midstream

and standard for the industry in terms of resource conservation, safety and stewardship for the communities in which we work, live and serve. XRI positioned itself early on to work with the highest quality customers in the upstream energy sector due to its comprehensive commitment to environmental, health & safety and the company’s safety record and scores rank at the highest levels in all of industry.

One key measure of this is XRI’s Total Recordable Incident Rate (TRIR). Currently, XRI’s TRIR is 0.00, in an industry where a range considered acceptable is between 0.80-1.00. Earlier this year, XRI celebrated over one year without a recordable incident across each of the company’s divisions. We are continuing that impressive standard of excellence to ensure our operator customers the outstanding performance they have come to expect from XRI. As of August 31, 2021, XRI continues to be free of a recordable incident over the last 675+ days.

The team at XRI, across all disciplines of the company, is actively engaged with each of our operator customers, enabling them to meet their water sustainability initiatives. We take great pride

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About the Author

in partnering with our clients in maximizing their use of treated produced water for completion activities throughout the Permian Basin. XRI’s exceptional growth trajectory results from many factors, not the least of which is the alignment of our ESG initiatives with those of our industry-leading customers. It is how we are revolutionizing the way that produced water is managed and underscores XRI’s position as the standard bearer in the water midstream sector, by demonstrating our profound commitment to ESG leadership and community stewardship.

XRI is a portfolio company of Morgan Stanley Energy Partners. For more information about XRI, please visit xriwater.com and follow us on LinkedIn.

In addition to his role as President and Chief Sustainability Officer, John Durand represents XRI and the water management sector in several key leadership roles. John serves on the boards of the Energy ESG Council, the Texas Alliance of Energy Producers and the Produced Water Society (in association with the Ground Water Protection Council). John also represents XRI on the board of the DOE’s Produced Water Optimization Initiative, the Texas Oil & Gas Association (TXOGA), the New Mexico Oil & Gas Association (NMOGA), the New Mexico Produced Water Consortium as well as on the recently formed Texas Produced Water Consortium. Additionally, John serves on the Environment and Safety Committee of the Independent Producers Association of America (IPAA) and on the Energy Advisory Board for the University of Texas at Dallas.

Mr. Durand holds a Master of Business Administration in Corporate Finance from the University of Dallas and a Bachelor of Science degree in Petroleum Land Management from the University of Louisiana.

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Downstream

Another Chapter in the Development of Bioprocessing: POET’s Acquisition of Flint Hills Resources It can often be difficult to predict the historical importance of a single moment in time. But occasionally it is clear just how significant a moment will be by understanding the history leading up to it. From a family farm project during a farm recession, to a small biorefinery purchase, to the largest acquisition in biofuels history, POET may have humble beginnings, but the company has quickly become a powerhouse in the world of biotechnology.

By Doug Berven, VP of Corporate Affairs doug.berven@poet.com

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Downstream

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n June 1 2021, POET, the world’s largest producer of biofuels and a leader in the development and production of renewable bioproducts, made the largest acquisition in biofuels history by purchasing the biofuel assets of Flint Hills Resources, which included six bioprocessing facilities and two terminals. The acquisition increased POET’s bioethanol production capacity from 2.2 billion gallons to three billion gallons overnight. The acquisition also significantly increased POET’s capacity for high-protein animal feeds, bioCO2, purified alcohol, corn oil and other critical plant-based products.

POET’s origins started on the Broin family farm back in the 1980s, when the federal government was paying farmers to set aside 20 percent of their land because of an oversupply of grain in the United States.

Instead of putting their land in a federal program, the Broins built a small bioethanol to soak up their surplus grain. They used the bioethanol to fuel their machinery and

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fed the distillers grain to their livestock. It was an innovative solution to the troubling agriculture situation at the time.

Then in 1987, Jeff Broin, Founder and CEO of POET, along with his family acquired a defunct one-million-gallon bioethanol plant in Scotland, SD. As they worked from the humble confines of the plant, word quickly spread that the Broins had successfully commercialized the facility and calls came for the family to build plants in many areas of the country that were experiencing the same oversupply and underpriced grains situation that was bankrupting farmers at an alarming pace.

Within a few years, Broin expanded the company’s ability to provide renewable fuels and plant-based bioproducts. As the number of plants grew, so did POET’s team.

The company grew from 13 original team members in 1987 to over 2,200 today. In the first twenty years of existence, POET grew its capacity of bioethanol to one billion gallons annually. Twelve years later, that capacity doubled to two billion gallons,

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Downstream

and only two short years down the road, the capacity grew to an unprecedented three billion gallons.

It is an unwavering belief in the power of agriculture and biofuels that drive the growth of this company and industry.

Society will need low-carbon liquid fuel sources and bio-based products to power aspects of the clean energy economy today and for decades to come. That’s why POET most recently doubled down on plant-based biofuels and bioproducts to help meet the challenges of today — most notably climate change with the acquisition of Flint Hills.

In a recent study from Environmental Health and Engineering, researchers found that greenhouse gas emissions from bioethanol are 46% lower than gasoline.

More importantly, the study demonstrated how the production of bioethanol and the 40

advancement of agriculture are constantly improving to further reduce emissions, leading to a carbon neutral renewable fuel in the near future.

With the climate crisis becoming even more of a threat, the world needs viable options to reduce greenhouse gas emissions immediately. Bioethanol provides a readily available, affordable and clean solution for the transportation sector right

now and for the foreseeable future. We don’t have to wait for developing technologies to solve the climate problem. Bioethanol is doing it today, and higher blends will only further reduce emissions from the transportation sector. POET has been on the leading edge of the Renewable Revolution for over thirty years. The POET team believes that to solve the planet’s most pressing issues, including climate change, poverty, hunger and disease, we need to get our resources from the surface of the land, not the center of the Earth.

POET’s acquisition and growth in June cemented its place in biofuel’s and

biotechnology’s history. The move displayed POET’s confidence in the future of biofuels, and its continued impact on the fight against climate change. POET believes that everything you can get from a barrel of oil, you can get from a bushel of corn, and we are on a mission to do just that.

POET is creating sustainable alternatives to fossil-fuel based products using the sun, the soil and the seed, and we’re just getting started. To learn more about POET, visit poet.com.

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Power

Are you ready to electrify your commercial fleet?

With electric vehicles on track to be the majority of passenger cars and buses by 2040, there are several ways to plan for and deploy your electric fleet.

By Brent Johnson Principal, Sage Energy Consulting, an NV5 Company

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emand for electric vehicles (EVs) is skyrocketing with the convergence of several trends sweeping the industry.

A combination of policy, improvements in battery technology and cost, improving availability of charging infrastructure, and deployment of new compelling models from automakers, has many commercial operations looking at fleet electrification.

Having a plan in place from the beginning that factors in a company’s goals, fleet needs and constraints will facilitate a smooth and cost-effective transition.

A multitude of reasons to pursue an EV fleet will impact the process, including fulfilling corporate mandates, meeting statutory or regulatory requirements, taking advantage of incentives, and proactively planning for an all-electric future.

A company’s unique motivations will dictate the framework and timeline to plan for and deploy this new fleet.

Location is a major consideration. Geography and markets are critical as to how quickly and how much funding support is available for electrifying your fleet.

For example, with California leading the EV market, a business operating there can tap into the Clean Vehicle Rebate Project (CVRP), which offers up to $4,500 to lease or purchase a new plug-in hybrid electric, battery electric, or fuel cell electric vehicle. Even more lucrative is the Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project (HVIP), offering up to $315,000 to purchase or lease a new zeroemission or hybrid truck or bus.

Other programs include utility programs to fund and construct charging infrastructure, local air board funds, and state level grants to incentivize clean air vehicles. Low Carbon 44

Fuel Standard (LCFS) credits are another substantial incentive in California that should be factored into Total Cost of Ownership (TCO) calculations.

Operating in a state or locality without statutory incentives for drivers of EVs requires additional planning to make a project pencil. In general, though, fuel and maintenance savings with EVs offset the higher initial cost of ownership. One Indiana police chief expected to save $20,000 over the lifetime of each Tesla Model 3 he bought to replace his department’s Dodge Charger squad cars. He reported that the EVs are paying for themselves even faster than expected, within about 19 months.

Motivation and location will inform the foundation of a business’s EV strategy, but next it’s important to consider the type of EVs you need based on the job requirements.

Reviewing data from existing fleet vehicle usage helps make this decision. Climate, terrain, speed, traffic, etc. all should be considered when considering EV replacement.

Telematics data, which typically include these details, is particularly useful in determining which vehicles can easily be replaced with EVs currently available in the marketplace.

EV technology is rapidly evolving, with new models announced and coming to market across the different vehicle classes. Replacing every vehicle with a zeroemissions counterpart may not be feasible with today’s offerings. But even though medium and heavy-duty electric vehicles may take several years to achieve widespread adoption, it’s possible to begin testing them on a small scale in specific applications, such as last-mile deliveries.

One critical aspect to consider, of course, is how and when these new electric vehicles will be charged.

This typically means building new charging infrastructure and creating new loads on the local grid. Charging a dozen or so Class 1 or 2 EVs is substantially different from daily charging of 50 or 100 vehicles, and if these are in the heavier classes, this could mean significant new loads for a facility.

It’s significantly easier to charge a fleet that returns to base or another central location each night (or day), versus vehicles that are 45

Power

stored in multiple locations (such as employees’ homes or on overnight travel). Coordinating with your utility early in the process and planning for electricity as your new fuel is critical to the success of larger fleet deployments. As EV fleets scale, software that helps manage charging (Charge Management Systems, or CMS) and power resiliency (in the event of an outage) are also important considerations.

Many companies are evaluating the viability of on-site solar, stationary battery storage and 46

other forms of electricity generation to mitigate cost, support resiliency and meet broader sustainability initiatives.

But depending on location, existing incentives and utility constraints, this isn’t feasible or cost-effective everywhere for every fleet.

The bottom line is that it’s important to remember that fleet electrification is still in its early days and is rapidly evolving, so it’s okay to start small.

There are many good incentives out there that can make pilots affordable, sometimes at even lower costs than your current internal combustion vehicles require. Starting small, careful planning and a flexible fleet strategy are key for a successful fleet transition over time.

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