 Hey, hello, and welcome to Stand Energy Man here on Think Tech, Hawaii. Stand, Osterman, coming to you live and direct from the beautiful megalopolis of Kailua, Hawaii. And today is actually going to be one of my more challenging shows, and I'll explain that in a few seconds. But before we get into the show, I'd like to thank everybody from Renew Rebuild, Hawaii today, who helped us talk to Mayor Blangiardi about some of the county, city and county's big challenges and how they're going to use ARPA funds. Thanks to everyone for participating, and thanks to the Mayor and his staff and Councilman Sey and Mr. Formby from Mayor's Office for helping us make that a really great forum. I appreciate it. Like I said, today's going to be the best way I can describe it is I've been kind of watching some of the emails that my next guest sends out, and a lot of it resonates with my old military sense, and maybe that's because he's an old military sense kind of guy. And we're really going to end up doing probably 10 or 20 shows with him because there's really just so much to talk about that I find so interesting. But anyway, our guest today is Dan Gohan, and he is a 50-pound brain, among other things, but one of those guys who has just gotten his hands into so many different things from computer software design and development from microgrids and grids to weaponry to all kinds of stuff. And he has such a great, huge picture of the energy world, and that's his business right, or one of his businesses right now. So Dan, I just want to thank you so much for being on the show today. I really appreciate it. And I'd like you, using your own words, you can tell the audience a little bit about your background and what you do right now with your current personal business and your energy company. Sure. So I'm one of those people that I have RFC, I've written RFC. So those of you who don't know what RFC, that's requests for comment, those are Internet centers. I'm one of the people that came out of the ARP in it and brought me. I work mainly out of the Crane Naval Surface Warfare Center during the 90s, and I did mainly development was on the Network Time Pericol, GPS, JDAM, ran Tomahawk for a lot of years, did tried it too. And after I left the Department of the Navy, I ended up going into the public utility sector and a place called Indianapolis Power Line here in Indianapolis and pretty much just automating everything that was bolted down. The project after IPL was a place called Midcontinent ISO, and that's an independent systems operator. So I'm the guy that designed the computer system that controls the power gears for about 26 states and parts of Canada. And that was a three-year project for about eight-hour weeks. After that, I did work for General Electric, and that was the alternative to the fuels program that was burning hydrogen, and that was anywhere from an LM600 to the huge 9HA, which is 557 megawatt gas turbine. And one of the few people that have had the honor of melting a gas turbine down with hydrogen. So after that, spent about eight years working for Lily, designing financial system, vaccine lines, warehousing, that type of thing, probably the last seven years I've wandered off into the corporate world. So either I'm a junior partner in one or two corporations and this corporation is mainly focused on hydrogen now, as far as how electron power technology, how this thing started, it started about 10 years ago. And there were a couple directors. One is a guy by the name of Dr. Michael Rage, who chatted with the chip propulsion laboratory at Wright-Patterson, him. And there's another gentleman by the name of Dr. Jerry, by the name of John Holmes, a retired director at a redstone arsenal. And another guy by the name of Jerry McFarlane, that basically called on me to sort of crack a lot of the hydrogen energy problem. And there's been a mystery with hydrogen that's been a problem for probably close to 200 years, and it has to do with compression and storage. And that was to figure out exactly what is hydrogen brittlement, why are certain materials permeable to hydrogen? Others aren't. Figure out what materials that we can safely and effectively use with hydrogen, how to build valves that are practiced subcode and how to build valves that are molecular-tight at the bottom level. And these are devices you could scale the diameter of a semi-truck tire if necessary. And more importantly, was designing how to compress hydrogen, not using mechanical systems. And so for right now, the electron hydrodynamic compressor, we're talking about 57,000 psi, and the machine can move cubic kilometers of gas. So it's a machine designed for scale and it's designed for energy storage and for storing energy for the power and to take advantage of a lot of the excess generation we've got out of the car. That's outstanding. In fact, I've come to the conclusion after talking to you a little bit today that we're going to have one program just focused on hydrogen compression and storage. And we're just going to dedicate the whole show to that, because I agree with you that that's the one nut. If there's anything in hydrogen that I find is a negative, it's compression and the ancillary is storing it after it's compressed. So that will be a great show all by itself. But what really captures me about the work that you do and the emails that I see is that you have such a good grasp on not just hydrogen and not just nuclear power and not just any one or two aspects of energy, you kind of have the economic and global picture of the political ramifications, the national security ramifications of dealing with energy at the global scale. And I know that's a huge subject, so we're obviously not going to tap into it today, but it's one that I really wanted to start to focus on today. And so could you kind of give us your picture of the current state of oil and natural gas as our current stock and trade in energy and transporting it and the economic pieces that are tied in there? And we'll get into that discussion a little bit. But if you could just kind of get us started on that as a topic, that'd be great. Well, there's a bigger issue here. And it's something that's not effectively talked about. And unfortunately, I think you and I are talking about, and unfortunately, some of it has been trapped in some of the politics of the day. And the politics of the left and politics of the right. There's a truth that has nothing to do with either one of those ideas. And it's something I first encountered dealing with coal-fired power plants. Now, the reason why I intimately know about a lot of this stuff is I understand I'm the guy that sits down with the accountants and the lawyers. And I turn legal concepts into software. So I'm the guy that builds the spot markets to future markets. So I have to have a really good gap grasp on how a lot of these things work to put all those pieces together. So one of the things that's happened to coal-fired power plants, and the public has the impression that coal-fired power plants are being replaced with gas turbines. And the reality is very different. And it's not the wind farms you're replacing the gas turbines and it's not the gas turbines replacing coal-fired power plants. It's not wind farms replacing coal-fired power plants. Really what's happened, it has to do with the quality of the fuel, quality of the coal. So as the high carbon content coal has been depleted, understand the coal miners, they mine out the highest quality material first and they leave the other stuff later. Now, even though the United States probably has 300 years or 400 years with coal, the part they don't like to say is they don't like to say that a majority of that is the stuff called lignite, which is less than 40% carbon content. It's brown coal, right? In the business we call it burning dirt. Well, the problem with using that type of fuel is you can quickly see that you're going to expand most of your energy and mining it, transporting it, just transporting material that doesn't provide energy, right, in your coal-fired power plants. And so the quality of the coal affects that business, the coal-fired power plant, in how they can sell energy. And then when you're competing with something like wind, what happened over the number of years is the wind farms would become incredibly efficient and right. So the public has this opinion that the coal-fired power plants placed by the gas turbines, reality is that we had a building there, we removed the coal-fired power plant, we put a gas turbine in there and the reason why is because there are gaps in the power grid and one of the things I can fire up and provide, 557 megawatts of power, is a gas turbine. I can fire that up in 15 minutes and that's why it's in there. It's not because it's running on the top, it's because it's something I can produce huge amount of power and put it there. Now, the fossil fuel business has the same problem. So you talked about oil and natural gas. Well, most people don't realize about this is that natural gas is a byproduct of oil production. If those guys aren't out there drilling for oil, you don't get natural gas. And the reason why is because what they're looking for is oil. They make very little money on natural gas and the reason why is by the time you put in all the infrastructure to take advantage of natural gas to put it on the gas grid, right? There's very little profit because of all the hardware you've had to invent. The CapEx is really all the hardware you've had to put it. One of the great examples I have when you talk about, for example, if you're, because they're my customers, Vector and Centerpoint and all those different companies is when they're pumping gas from Texas all the way up to Ohio, they expand almost 30% of the quantity of that gas in the pipeline just pumping up there. So every 20 or 30 miles is a pump station. They tap into that gas and burn some of that gas to power the pumps. So you have this quality and efficiency issue and these things start compounding and it starts affecting the economics. When it comes to the Middle East, we've got, the easiest way I can describe whether it's the Middle East or whether it's here in the United States or anywhere in the world, the really great quality, the easy to get at, the easiest to refine fuel has been consumed. And what's left behind is the fuel that either is hard to get at, meaning is it's 3,000 feet down, requires billions of dollars for the equipment to know the ocean to grab at, right? Or it's oil that has problems with it, meaning it's got a lot of sulfur. There's a lot of things you have to do to it to refine it. And it's something that's usable like diesel and gas and which means that the cost of refining it goes up and up and up and up. So the entire fossil fuel business has this quality right now. When I talk to people about this, I'll tell you, I'll be honest, pretty well honest with you. There's plenty of oil. The question is, what do you want to pay for? And that's where you get into these economics because we know that whenever gasoline's five, six, seven, $8 a gallon, people just plain stock, right? And when the fuel price is that high, I'm sorry, but the reality is a lot of people start looking really warmly at that force versus their car. And that's just reality. So even though, for example, the folks in Saudi Arabia, they'd love to be selling oil at $150, $200. They know they'll never get there because nobody will pay for the fuel. That's just reality. You know, let me interrupt for just a second and bring up two points that we talked about before too. When it comes to the coal, it's not just using coal as a fuel or burning for power, but the best coal is used in other industries as well. And you mentioned steel production being one of them. So not only are you running out of the best coal that gives you the best bang for the buck on energy production, you're competing with other industries that need that specific kind of coal in their production of steel. Otherwise, they have to also look at higher cost options to make their steel. Is that correct? That is correct. That's why you've got, for example, blast furnaces rather than using coal to melt steel, either using electric arc, and a lot of them are looking really closely at hydrogen. And that could always be a story, a show in and of itself, how in a lot of respects, you're better off actually using hydrogen to make steel than using an electric arc. And as time, because of the quality of the coal, which affects what we call coaking coal or high quality pure carbon for making steel. And one of the things that's been going on, for example, in Germany, they've been firing up some of these blast furnaces using hydrogen. And the reason why everybody is watching that is because the steel, the quality of steel coming out of Germany and out of places like Sweden is some of the highest quality steel in the world. And if you want to know why, it's because when you're using hydrogen from an electrolysis or that hydrogen is 99% pure. So there just aren't any impurities in that steel. In fact, all the impurities in that metal are what they're adding to them up versus I'm fighting against how to remove the impurities out of them. So yeah. Go ahead. And another thing that struck me as we talked about the international side of like natural gas. A few months ago, I remember reading something from you that said that because the American natural gas industry had done so much capital expenditure on infrastructure, and you mentioned just now that the cost of getting natural gas was the big cost was capital expenditure upfront to build the infrastructure that when all of a sudden the world market went imploded a little bit price-wise on the cost of natural gas, we were actually outperformed price-wise by Russia and other countries. So the tune where our own companies that were producing natural gas in the US couldn't compete because their natural gas was too expensive compared to other nations. Is that, could you expound them not a little bit about that implication? That's all true. The reason is why it's very simple. If we're gonna ship natural gas to the outside of the world, we're expending some of that natural gas to liquefy and turn it into natural gas and put it on a ship. If you're competing with Russia now, one of the aspects most people don't realize about Russia is Russia has something like 1.4 quadrillion cubic meters of gas in reserves. And compared to the United States, we're like 334 trillion, but the Russians are 1.4 quadrillion. So if you took Russia and understand their customers are right there, they're a pipeline away. They don't have to liquefy it. They just have pipelines. The Russians, if you took the 2020 consumption of the world consumption of natural gas alone, the Russians by themselves could supply the planet earth with 48 years worth of natural gas. And number two on that list is Iran. And right now there's this unholy Trump between China, Russia and Iran that's going on. And between that group right in there the truth is just looking on just filling pure reserves of natural gas, oil and so forth. Between those three, they're probably going to control the controlling world for probably the next 100 years. Unfortunately that's true. And it's because the Russians have so much natural gas they can almost literally dump it on the market and their customers are right there because they're just a pipeline away versus we're having to liquefy it and ship that stuff overseas. That brings up one of the images that I wanted to put up and that's the one of the pipelines in the Middle East and you sent us a map if we could throw that up Eric. Could you talk to us a little bit about the China Belt and Road project and how that kind of ties together in this energy picture and impacts the US in terms of energy and finances. We talked a little bit about, US's currency is the strongest in the world arguably but we're getting competition now and how does all of this stuff play into that? Well, first of all, what's on that map there there's a new pipeline. There was an agreement that was negotiated over several years and there's a 25, the Chinese have a 25 year deal with Iran and primarily where the Chinese provide financing infrastructure. The Russians have been providing the oil filled services, pipelines, oil refineries and so forth. And when I talked to people about this they sort of scoffed at the capabilities of Russians. I said, wait a minute here. You realize that, who put the first, a synthetic orbital thing in orbit who put the first man in orbit around the planet wasn't us, right? So don't scoff at Russian science and in America. But that 25 year deal that the Chinese have with the Iranians, part of that was part of that whole agreement there's a SOFR that's a status of forces agreement. So that means that as of the second week of November of last year, the Chinese military set up bases in Iran and the Russians are there with them because there's a lot of legal grids between those two countries. Now, what does that mean? Well, remember that there are five permanent members on the UN Security Council. That's Russia, China, England, France and the United States. And now two of those members have military bases in Iran. So what does that mean? How you're going to deal with Iran? You're probably not going to be able to do much to them because the Chinese and the Russians are already in that country. Now as part of that deal, that pipeline you got right there that is an oil pipeline. It starts up near where the Tigris and your Frades drain into the Persian Gulf up near Kuwait. And it ends down past the Straits and it's down on the Arabian Sea, right? And it's right near the Pakistani border. Now, what most people don't understand about this is that the Belt and Roads initiative is that, for example, I think there's some really good videos out there on YouTube where you got this guy, he's from Belgium and he actually travels from Belgium or from Azerbaijan and takes the train all the way to Beijing, right? And he doesn't like 10 days. And that railroad actually grows through the northern part of Iran, right? Right into China. So most people don't realize that the Western border of China is with Pakistan from Pakistan directly into Iran. Now, as part of that, you go out on YouTube and if you type in China, Pakistan, you'll find this documentary from DW and that's a public entity there in Germany with documentaries that work sort of like our PBS here in the United States. But they have a documentary, it's a two-part documentary where they talk about that there's a two-lane highway with tunnels that go from China through the Himalayas, through Pakistan and meet up with that port down there on the Arabian Sea there, right? Not only that, but the Chinese, as of two years ago, were building a freeway through there. And understand, we're talking about, so they can drive semi-tracted cars at 70 miles an hour from China, through the Himalayas, through Pakistan, all the way down to the Indian Sea there, the Arabian Sea, I'm sorry. But the point being is, once they finish it up, it's just a hop, skip, and jump before there's a railroad line in there. And that means the Chinese are gonna start moving oil into China and more likely the odds are that they'll end up building that order finery there in the Western part of China out there in the Millette Desert where there's nothing at. They'll turn that into refined product, load that onto their bullet trains or electric trains that move at 300 miles an hour and travel the entire lake to China. And the points of being is, A, you just look at that pipeline. First of all, the straits or promutes are pretty much the United States Navy, some point is gonna be asked to leave because they're not necessary. Because the Iranians are renting space out of that pipeline to anybody who wants to pay it. So if you look closely at that map, there's direct connections up in Iraq and Kuwait. And of course, the Saudis are right next door. So they're gonna move oil and gas through there. Right now, as of June, there's one pipeline which just matter of time, there'll be multiple pipelines. And according to what I think Freistad Energy's saying, is that pipeline right now is moving about six million barrels of oil a day. But eventually, whenever the Chinese finish up with that belt rosin is going through Pakistan, that the Chinese will have access to the Middle East and they don't need the straits in Malacca. Basically, they don't need, basically Singapore. And so whenever that happens, the any kind of tactical advantage we thought we had against China all disappeared. We talk in the military about lines of communication. And for most people, that just means telephone lines and internet connections, but it actually means shipping lines of communication. And what you're just talking about is the fact that right now the entire world for commerce and especially for oil uses that region you're talking about to ship basically the blood of the world's economy and the world's industries back and forth between Asia and the Middle East will no longer be necessary. And like you say, Singapore will be impacted. A lot of the shipping in that region will disappear and therefore the reason for the United States military to protect that shipping will evaporate. So there's some huge national security implications, not to mention the fact that now that we have the northern part of the Western Asia tied in with Pakistan and China and the Middle East with Iran and Afghanistan keep on going, you have all new dynamics in the political stage, international political stage that we have to consider in all our calculus as we start dealing with energy. One of the bigger things here, there's a country that's just north of the area it's sandwiched between Russia and China is a place called Lausier by Jean. What most people don't know is something like 70 to 80% of the world's uranium comes from that country. And guess where they're sandwiched right between Russia and China. And the Chinese use a lot of Russian technology for nuclear power. And so here we've got two major powers in the world that have between the Iranians. If you looked at, for example, from the tip of the Arabian Peninsula basically an ellipse bisecting the the Arctic Circle at that area, in other words, it goes from the tip of the Arabian Peninsula all the way up into Russia, that whole area. You're talking something like 78% of the world's reserves of hydrothermal right there in that area. And those are gonna be tied up by those countries. One of the things that's been going on is China has some of the largest integrated world refineries in the world that they've been bringing online. India does also. But we're looking at a situation where they're gonna have direct access to that fuel. One of the things that's been going on in the international market is China and to some extent in India, but mainly China has been dumping diesel and gasoline on the international market. And one of the things that's caused, for example, right now, they put most of the refining capacity in Australia out of business. So come January, 2022, Australia will have one oil refiner, one. And we've lost a number of refining capacity here and Europe is down into single digit when we come to oil refineries. And all they're replacing with just import terminals because so unfortunately, we're probably looking at a situation where probably within the next five or 10 years, we're gonna be importing fuel from our enemy. And that's a scary thought. And that brings up, as we go into our last minute, the point that can the question I started off the program title with was, can the US be energy independent? And I think we're gonna have to do a second show and just talk about that. Both of us kind of agree that it's possible. But right now, the ground picture that I set today was how critically important it is for the United States to get on top of this stuff because the rest of the world is moving and we're falling behind. And I think that's probably where we're gonna have to leave the discussion today. But I'll leave the last minute up to you to just kind of close with. Well, I think you've hit the nail, hit the head on the nail, and that is exactly it. And I think this whole tragedy we've seen unfold, unfortunately, where in Afghanistan, everybody's now realizing how important Afghanistan was because it was one of the few places that was sandwiched between Iran and Pakistan. And now with that whole thing sort of crumbling, we're gonna be left with this reality. And we've known this reality has been playing itself out. But we're gonna reap, unfortunately, it has to reap for the worst of its kind. Well, Dan, I really appreciate you being on today. And I hope the audience has gotten an equal appreciation for the level that you think at and work at for your companies. And I really do. I've gotten a lot reading of the information you send out. And I really hope you can come back on a future show or two or three or four or 10. And we'll talk about some of these other issues. But I think that's gonna do it for us today. And I really wanna thank you. Appreciate it. Sounds good. All right. So until next Tuesday, this is Stan the Energy Man signing off from the beautiful Megalopolis of Kailua. And we'll see you next week, Tuesday on Think Tech Hawaii, aloha.