Sustainability, Clean Energy, Recycling & ESG

The Malaysian import of US waste plastic headline needs to be put into context, in part because it is only one container, but more importantly because of what is in the container. The container is only being allowed in Malaysia because it does not contain contaminated plastic. What is slightly crazy about this, is that non-contaminated plastic is precisely what should be being recycled in the US! There has to be a higher use today in the US for uncontaminated plastic than sending it offshore. This is another anecdotal data point that suggests that all of the recycling initiatives we keep reading about are small and inconsequential. If there was not a higher bid for that container of plastic within the US, we have a long way to go.

In our ESG piece published today, we talk a lot about hydrogen and contrast the API push for blue hydrogen, with the flood of announcements of green hydrogen projects that make no sense to us given the pressing need for renewable energy to solve other more pressing needs than hydrogen,   Renewable biased power grids can only become viable if a major surplus of generation capacity is built alongside storage mechanisms to counter the variability of power supply because of weather effects. The storage can be battery, hydrogen, or hydraulic, but to move the proportion of power generation to renewables meaningfully higher, some sort of reliability-focused “strategic reserve” is needed to prevent grid failures during extreme weather. This is a much more pressing problem than the current desire to make green hydrogen and there are greater needs and higher values for the power associated with almost all green hydrogen projects today, to solve more urgent problems. Green hydrogen must either wait in line, behind the more pressing needs, or the hydrogen fans should accept the value that blue hydrogen can play over the next 25-30 years to create the infrastructure needed while not pulling valuable renewable power investments away from more pressing social needs. A blue hydrogen program could start and grow quickly as long as those investing are confident that they can achieve adequate returns on investment.   Hydrogen may be the fuel of today, but not green hydrogen.

Every week as I write these sections I have a picture in my head of a family freezing on the doorstep of their home, being greeted by an emergency worker who says “I am sorry that the power grid has failed so badly and that you have to evacuate, but please come and ride to the shelter in our brand new green hydrogen-powered bus!”