 Good morning. Good afternoon. Good evening to all of the people around the world. I'm your co-host with Sally for today's Stanford Global Energy Dialogue. Today we have two leading experts to join us from the energy industry, Ashok Balani and Bruce Niemeyer. Ashok Balani is the executive vice president of Shlomba J. Neal Energy, a position he assumed in February 2020. Ashok is responsible for the deployment of differentiated technologies and practices to decarbonize exploration and production operations and the development of new avenues of growth and emerging markets with carbon neutral technologies and Shlomba J. Ashok Balani started electrical engineering in India, holds a graduate degree in particular engineering from Stanford University. Bruce Niemeyer is corporate vice president of strategy and sustainability for Chevron corporation, a role he assumed in 2018. Bruce Niemeyer is responsible for guiding development of Chevron's key strategies, including capital allocation, sustainability efforts, well-focused efforts include investments and low carbon technology to enable commercial solutions and larger scale carbon capture and storage operation. He earned bachelor's degree in particular engineering from Colorado School of Mines, is a registered particular engineer in the state of California. With this introduction to Ashok and Bruce, let me transition this to Sally. Okay, thank you very much Yi and the whole team here. Like usual, we'll start out with a quiz. So the question is how many commercial scale carbon capture and storage projects exist today? None? Six, 26 or 121. Okay, so let's see how you did. Okay, wow. Okay, so it's pretty evenly split between zero, six, 26 and 121. The single largest number was six. So actually that's not true. Today, according to the Global Carbon Capture and Storage Institute, there are 26 projects that are in commercial operation today that have the capacity to capture and store 40 million tons of CO2 per year. Now let's move on to the next question, the next quiz. So what is the estimated need for CO2 capture and storage utilization in order to be able to limit warming to 1.5 to 2 degrees C by 2050? Do we need 100 million metric tons per year, a billion metric tons per year, 5 billion metric tons per year, or 50 gigatons? And just to be clear, a gigaton is a billion tons. Okay, so go ahead and put in your answers. Well, that's pretty good actually that the single largest answer was 5 billion metric tons per year. So these numbers come from the IPCC bit, the assessment report began to make the case that we were actually going to be able to extract carbon dioxide from the atmosphere. And more recently with the IPCC report, I'm limiting warming to 1.5 degrees C, also concluded and actually quantified the need. And it's somewhere between 5 to 10 billion tons per year by the timeframe of 2050. So you can see right away that given we're 40 million tons per year today and we need to scale up to 5 to 10 billion tons per year, we're talking about 100 fold scale up. So quite a challenge. Okay, so let's go ahead and start our conversation. So welcome Ashok and Bruce. And thank you so much for joining us. In March of this year, it came to our attention that you'd announced an exciting new carbon capture and storage project in California. And we'd like to begin today's discussion by learning more about this. So Bruce, why don't we start with you. So specifically, Chevron, Schlumberger and Microsoft together with a company called Clean Energy Systems announced that you would be investing in a first of a kind of carbon capture and storage project in California in a small town called Mandoda. And the project will actually take carbon dioxide out of the atmosphere, produce electricity at the same time, creating so-called negative emissions. So could you explain this project to us? You're sure, Sally. And it's a pleasure to be with everybody today. So what the project does, Mandoda is in the Central Valley of California. That's an important agricultural area for the country and the state. There are almond trees and other material that's grown as part of the agricultural process. Typically at the end of their useful life, those trees are disposed of through burning and the carbon that they capture across their life is released back into the atmosphere. What's novel about this project is it will take those trees that need to be disposed of in some way and it will become the feedstock for a facility in Mandoda that by utilizing new technology will take that feedstock, generate electricity for sale back to the grid in California and the carbon will be captured and that carbon initially captured by those almond trees will be permanently sequestered underground in an associated sequestration aspect. So all in it provides electricity that's needed by the state and it's a negative carbon at the same time and that makes it a very exciting project and we think it takes the complementary capabilities of the four companies coming together to do something like that. Okay great, then well thank you. So Ashok, you know why was this project attractive to Schlumberger and how do you see this fitting into your long-term plans? Okay good morning Sally and Yi. Thank you for inviting us to this talk. Always good to be with Stanford even if it's virtual. Hopefully we'll do this face-to-face in a short period of time. So this project we actually started from Schlumberger working with clean energy systems about two years ago and at the same time as the world was kind of reviving a lot of interest in carbon capture and sequestration after let's say a height or so a few years. There was a lot of interest in say the 2004-2012 time frame when lots of projects were done, experimental projects but I think from a business or economic standpoint at that time the world could not get their arms around getting carbon sequestration going. So with the new impetus of net zero climate change issues and all the countries passing laws to go to net zero and understanding that net zero by 2050 or 2060 would not be possible even with all the advent of renewables and hydrogen lithium economies it was clearly understood that one way or another carbon capture and sequestration would have to come into a business configuration that can scale. And so we started also trying to see how we could have business configurations where this could be economically feasible and it so happens that California with its LCFS field standards and with 45Q from the federal government there is a good chance of making something like this economically feasible. So while we worked with governments or companies to do projects purely as on contract we wanted to have an innovative business configuration where we could make something quite adventurous as a hugely negative carbon project to be economically viable given the regulations that already exist. So the fact that these three very large companies and a small company which is technically quite innovative come together in this configuration is an attempt at making these kind of business models of business configurations pursue these interests which will make projects like this scalable in the future. So we are very interested because it is let's say a game changing approach to making something from a business standpoint viable for the future. Okay well terrific thank you thank you Ashok. Yeah Schlumberger has been very involved in a lot of the technical aspects of carbon capture and storage really from the very beginning. So Bruce so what was it about this project and I guess about this time that made you decide to invest in this? Why is this important to Chevron? Well we think carbon capture is important to the future. We think the future of energy is lower carbon as one of your poll questions alluded to the IPCC also sees the importance of carbon capture. We think it plays an essential role but we have to make progress as society and we thought that this represented a confluence of events that this particular project was quite innovative and we wanted to be a part of it and you know we have you know some constructive policy in California we have the right you know circumstances around this project and we see a role for Chevron to invest in low carbon technologies that can commercialize and if we're going to scale CCUS to five to 10 gigaton range it's going to have to be commercial in order to attract the level of attention around the world to deploy it at that sort of scale and we think when we see those kinds of opportunities that's a place and a role we can play and be involved in and this will be the first of for California and so we think it can be a gateway project for other opportunities in the state. Okay, terrific. Well thank you so E, back over to you. Well thank you Sally. So it's really good to learn about Chevron, Schlumberger and Microsoft team up to do this project in California. I want to ask a question, a shock to you. Schlumberger is known as a company to bring the most advanced technologies to very challenging problems. So what are some of the technological challenges for CO2 capture and storage and how can Schlumberger's technology help? So it's a technically interesting question from a technology standpoint and you know when all that all those series of experimental projects were done 15 or so years ago something that did come out of all of that effort was a lot of advance in technologies related to the subsurface and so where we use things and person and to Stanford in particular where we use reservoir simulation for understanding how oil and gas and water move in porous media. We came up with the simulators for instance that would analyze how CO2 could be would move in a saline aquifer. The understanding of CO2 in an oil reservoir was there before but CO2 in a saline aquifer all came about because of all those projects that were done and today we have the right kind of simulators or models by which you can understand if you do pump CO2 in a saline aquifer where does it go and how does it behave and so on which gives you an idea of the assurance that it will stay in the right place for a very very long period of time. Similarly the well-engineering technologies the technologies for assuring that you have the right kind of integrity for the system to be able to do this kind of storage. It all came say 15, 10 years ago and it went into the classification schemes that the DOE and EPA worked on and today the idea of Class 6 permit exists which is all part of the technical regulatory framework that can make these technologies feasible in a practical world if you want. So from a sequestration standpoint I think the world's knowledge of what happens when you put CO2 in the subsurface is fairly advanced I would say. Of course as we do more practice commercially we will learn a whole lot more. Now on the capture side which is a bigger challenge there I would divide the issue in three sort of categories. There is the category of concentrated emissions where the emissions are easy to catch or relatively low cost to capture and then there are dilute streams which are harder to capture like in a cementing or steel process or the direct air capture from the atmosphere. And today we are really trying to to kick start if you like from the 40 megatons that you said towards that you know almost at infant looks like at the horizon the vision of 5 to 10 gigatons. At least we want to look at the concentrated streams and come up with the right commercial models the right business models to actually make that happen so that we kick start the whole business of carbon capture and sequestration. And for that I think by and large the technologies exist to be able to capture these concentrated streams and put them in the ground. So the the let's say the urgency of the moment is to get the business going if you want. And that's what Chevron and Chamege are trying to do here coupled with the power of a company like Microsoft and with the technical innovative capability of clean energy system. So I think all of these put together are going to make currently already available technologies use those technologies to make business with carbon capture and sequestration happens. Meanwhile there is a bunch of companies looking at capture in diluted streams to bring the cost down to the $30-40 per ton range. And there's also a series of companies which are looking at direct air capture and there the costs are much higher but over time as these technologies get proven in the lab and at smaller scale then they will scale to practical implementations. So there is let's say a roadmap of currently available technologies they need to go into new business systems or business practices that make carbon dioxide a business sequestration of business and then they will follow on from there on the roadmap towards the ambition of five to 10 gigatons. Yeah well it's very exciting to think about how do we do this scale up by this California approach of 40 million ton by 200 of those to become eight gigatons scale. So I'll show you now in Stanford and pre-co-institut put my director head out and actually Sally is doing this planning together with Arloon and a few others on this carbon removal workshop. I think there's a lot of technology innovation we will be needing. So now let me turn to blues. Sharon has been involved with other carbon capture and storage projects around the world. Certainly most notably is the Gorgon project in Australia. What have you learned from this and other carbon capture and storage project that would help make the new project a success? What are the key lessons learned? Well it's a good question. Yeah we're a company that solves hard problems and we typically partner with others to do that. Well I think one thing we've learned is that while there's a lot of attention on what's new or novel about a project in this case you know the how the carbon is captured there are a lot of other things that are necessary in order to make it work. You have to contemplate how you move fluids how you provide power logistics questions of how you move things in and out. Things that are more mundane but are necessary in order to get projects done in the real world. I think the other thing is to be understanding about the facts that serial number one always has certain kinds of new challenges with it and that's what we're engaged with and it's why you know companies like Slumberger and Microsoft and Chevron you know working together are really positioned to tackle the particular challenges but serial number one you will have surprises. You will have things that you didn't expect and you will have to you know work to work around those things and as an industry I've been in the industry now for 37 years things we do today on a routine basis were unthinkable when I started and it took pioneers individuals that proceeded me to work those problems out to figure out how you take concepts that you might first develop in a academic setting and convert it into the considerations that are necessary to get it to work in the real world and so you know in a place like Gorgon we've learned how to apply things in the real world not only the capture of carbon but the movement of the CO2 then to injection wells to sequester it in the subsurface and to do the monitoring you know of what happens in the subsurface so you know the moving from the conceptual to the real world I think is probably you know where our learnings in particular will be helpful in this project. Okay so actually you know the framing for this conversation is scaling new technologies and you know over the past you know several decades you know we've seen solar and wind and now batteries and EVs you know starting to scale but if we think about carbon capture and storage you know what do you see as the critical challenges to you know achieve this 100 fold scale up over the next three decades or so and just to create a little more context you know it involves like what kind of policies do you need you know what is the investor appetite for these projects what's public opinion you know how challenging is it to invest in infrastructure to build infrastructure because you know anything that you're doing with sort of on the ground presence you know there's all kinds of regulations and permitting and yeah so you know looking at this roadmap that you laid out you know what do you see as the critical challenges and how might you know how might governments or organizations help? So in a sort of a multi-choice question with lots of answers there's always this one thing at the bottom which says all of the above and the answer in this case is all of the above probably. I think as Bruce and I have both been saying I think we we found this project to be a good starter project that we where we could create a very innovative group of companies which by the way are let's face it Chevron, let me work together that happens every single day and you know it's happening all over the world every minute if you like but the fact that Microsoft is involved the fact that there's an innovative company which is a partner in the whole scheme this is new you know and what we are working on here is to try and put together stakeholders who all have something to bring to this very important exercise to kick start something you know it's not the whole business is not just this project by itself this is only the beginning if you want right so we've spent almost a year now working in 10 different streams where we have talked to the regulators where we have talked to the the farmers in Central Valley and understood whether the biomass what kind of a problem it is and is it advantageous for them. We've talked to the existing mothball plant which was producing power 20 years ago but now is mothball then it's going to be reutilized by doing something like this and create jobs in the Central Valley we've talked to the technical people and done the experimentation to understand can we actually can we actually gasify and capture 100 percent of the carbon dioxide that will be produced to have a perfectly clean waste biomass disposal scheme we've talked to the California Air Resource Board to understand whether it will qualify for the LCFS incentives and so on so all of that work has been done to just to understand that this kind of a project can be feasible and then we're going to go into a front-end engineering process now design process which will risk mitigate this process in the next year or so as well now all is to say that it is the process that companies such as this follow to risk mitigate these process and make them as Bruce said commercially viable you know we do that for a living in oil and gas we're going to do that here as well in this case with the use of a lot of innovative pieces of technology and practice you know now this being said still this is only the first and we separately and with other people are working in the the steel industry right now and the cementing industry right now in the biofuels industry and forming similar configurations to see whether we can bring the practice of carbon capture and sequestration to all those industries where there are hard to abate problems down the road but there is low hanging fruit in that concentrated streams of carbon dioxide now this is going to need help from everybody is going to need help from the regulators it's going to need help from the public for public acceptance for something like this it's going to need the help from academia for research to move things forward it's going to need help from a lot of different and I'm only talking right now about the United States you know so Europe has a slightly different way of approaching the issue so you have hubs being formed in the North Sea by a consortium of companies working together the Norwegian government or with the UK government or with the Netherlands government and these hubs will then spawn off capture activity from various industries by various players and there will be some kind of business practices established to be able to capture carbon and put it in the ground now all of this effort requires a lot of people to come together and new kind of partnerships to form and to to you know leverage new business models for the future an interesting aspect of carbon capture and sequestration is that there is no product that is being produced that you can sell to someone and make commercial money out of it you are actually taking let's say a waste gas and putting it into the ground so no one actually buying a product if you like right so it is a business that is difficult to establish from a business model standpoint and that's where a lot of the the near term challenge lies now when there are a hundred projects like this working all over the world and the constituent companies shareholding companies or the stakeholders are realizing that this is feasible commercially then yes it will have a life of its owners kill very quickly after that I think technology will follow from for capture and for sequestration okay terrific thank you thank you for that really thoughtful answer so so Bruce you know looking you know beyond California I mean in some ways California you know has created a very unique opportunity in that the low carbon fuel standard you know the value of those credits is what on the order of $200 a ton of co2 and and the 45 Q-tex credit is about $50 a ton so you know that it's kind of easy to see how that might be attractive also there's biomass in the Central Valley you know as we heard about waste biomass and and then it also turns out that the mandoda overlies a very good salient aquifer for for storage and so forth so there were lots of things that you know make it you know very encouraging for it to be a success so if we think though you know beyond California you know in the United States and more broadly around the world you know we need carbon capture and storage not only here but you know we need to think about China we need to think about India of course Europe and so so what do you see is the the challenges and how do you sort of see that that sort of rolling out over the next couple of decades to get to scale everywhere well Sally you're right to observe there's a lot of things that are are in our favor in mandoda which is you know why we would start there first but to scale you know I would just point to two things and they're recurring themes and Ashok touched on them a bit one is cost and the other is policy and we really need the advancement and advancement on both of those technology and you know getting beyond serial number one can help us with cost in the case of mandoda we have a particular set of conditions which the technology I think is well suited for but as we think about scaling more broadly we have to consider going to more dilute streams and how we capture those effectively and you know we have technology investments in a variety of places to deal with that all the way from in a very concentrated streams to the most dilute stream which is direct air capture and so you need you need progress in that space with technology not to prove that it can work because we can see that it works but in order to commercialize it needs to be cost effective and so that's the sort of progress we need on the one hand on the other hand we need you know supportive policies and where you see carbon capture projects evolving today you can also see a supportive policy overlay with where those things are occurring and it's a new area you know for society and policies have to evolve to align with society's interest in this regard so we're fortunate in california that we have supportive policies in the lcfs the low carbon fuel standard and in 45q nationally in the us and to expand in addition to the progress in technology that evolution of policy is going to be essential those are the two those are the two particular you know supporting activities that are essential for our ability as a society to scale carbon capture okay thank you e back over to you yeah thank you sally um so the discussion clearly show uh technology innovations these are very important i show i want to ask you the shlomba jay is involving the developing other technologies beyond just co2 capture and and storage and so on um particularly recently um you know you are involved in uh into lithium ion batteries such as lithium extractions so what are the challenges right there for scale up um how much does the industry needs to grow and what role does shlomba play growing this industry you know just looking at the scale right because i work on the lithium ion batteries areas if i i will look at i say well this year the uh let's say 2020 the production of lithium ion batteries is probably around a 400 gigawatt hour what we really need uh we need yearly production probably go up by 10 to 100 folks you know in the next couple decades so i want to pick your fault on on those questions yeah i think you are right we we are working on um different avenues of growth towards uh decarbonization or say low carbon or no carbon technologies and uh in each one of those sectors let's say there needs to be a very large increase so in the tens or hundred fold increase in the coming decade if we are going to go towards the good goals or the sustainable scenarios in the future so in i i think uh we are we're working in the the domain of hydrogen and and also in the domain of lithium and particularly in lithium over the coming decade there needs to be a massive increase because now i think it is pretty well understood that electric vehicles will become the order of the day on the road and hence with this huge increase that will happen in electric vehicle deployment there is going to be a surge of requirement for lithium and without going into too much detail let's say a number which is like 50 kilotons for something like lithium hydroxide monohydrate which is an important compound for the batteries that are going to be used in cars with the right kind of energy density the increase has to be from 50 to like a million tons of lithium hydroxide in the next seven eight ten years you know so that's a large investment and is a is a pretty big challenge so we we've been working on how to extract lithium from brine brine which is found in the subsurface so we obviously understand how to extract let's say lithium loaded brine from the subsurface and then to extract the lithium in a very efficient process and then end up with a very clean brine without the lithium which we can pump back into the ground so that environmentally the whole process is sustainable today some of the processes that are used or in fact all of the processes that are used are not sustainable from this standpoint because they utilize a lot of the water and don't return the water into the ground so our the new innovation that hopefully will come and scale in the near future will be a sustainable process that will manage the water in the correct manner now these knowledge these these kind of competencies not particularly in the the sector of lithium but in in general framework we understand from our businesses in the future in the past so we can apply some of that knowledge to have a continuous chemical process which can return very safe water back into the ground and yet extract enough lithium for to make it commercially viable and today the world knows how to extract lithium from brines which have something like a thousand ppm and we will be able to move to the brines which are like hundred ppm so we'll expand the target addressable market for lithium brines that can yield good lithium for battery the battery making industry which will allow all these gigafactory which are being planned in the united states and in asia and in europe to scale better otherwise there'll be a surge of lithium demand which the world would find it difficult to meet in the next few years so i'll just take that as a sector one sector is very interesting and i think everybody relates to the fact that evis are coming but behind the fact that evis are coming a lot has to happen to enable the the the ramp up of electric vehicles in the world and this is just one of those issues where we are trying to create a new business yeah so i'm sure this is very exciting um you know the whole world has about now a 1.4 billion cars running on the road uh about one billion is a passenger car 400 million close to that is car trucks big big buses right so if i look at this one billion passenger car all become electrical uh require assuming 50 kilowatt hour of a battery pack this require 50 kilowatt hour of lithium ion batteries so with a 400 gigawatt hour production right now it takes a hundred years to produce this much of lithium ion batteries so that also means you know we need to shorten that to 20 30 years time frame to get there and lithium extraction production will likely increase by about five volts in the i think next decade also very exciting now let me look at that about 400 million you know trucks and buses this is really heavy you know uh heavy stuff uh lithium ion battery might not be able to supply the power then there's a lot of discussion about hydrogen right a lot of you you touch upon early on a little bit uh you know shlomba jay new energy and cea and and the partners announced the uh this project uh formation of jambia is for the clean hydrogen production uh this kind of joint venture well tell us about this joint venture and its importance yeah so you before i go to hydrogen i i had just coming back to the batteries yeah whatever 400 for low whatever i think there are two very important aspects and i think it's important for for the this audience to understand that while there is the aspect of growing lithium batteries very quickly there is the aspect of making it more efficient so i think i'm i'm going to sort of return the the question to you people like yourself institute of energy efficiency i think the work that you do in coming up with new materials and the work that you are going to do coming up with new materials which are going to make batteries more efficient in terms of energy density it's very very important if those batteries don't go up that roadmap then the the scaling cannot happen so there is the aspect that you cover and the aspect that extraction covers that have to go both together to make some of these things happen while by the way it is a challenge it's also a very exciting area because it is very very interesting innovation for the future so it's it's good that we work together on on these subjects so similar to that we did something on hydrogen we created a company called genvia in france that company is is a public private partnership actually in that case in all of these the configurations are quite important and the public private partnership is between the atomic energy agency in france called the coa which has a technology arm called coa tech and they have some technology that they have been working on for the last 20 years on solid oxide high temperature electric electrolyzers and we in that case are the industrialization or commercialization arm along with a few other stakeholders and there are three that are actually shareholders in genvia these three are a very innovative cement company which is a hard to obey sector for emissions there is a very innovative construction company which runs all the auto routes in france and owns all the stops and then there is a region of france as well which wants to completely decarbonize and move to a hydrogen economy so while between the coa and slumberge we bring the expertise of trying to industrialize this technology of solid oxide high temperature electrolysis which is the most efficient way of turning renewable energy to hydrogen there are parallel projects that are going to be launched by all these companies working together with us to create the systems the hydrogen systems that are going to be utilized in the cementing process or in charging stations or in in local buses and so on and so forth to actually create a movement on the whole value chain to create a new hydrogen economy for the future so the company again has been put together by all of these stakeholders of course it will work with many other people all over the world as well but at least it starts off with the right stakeholders that are going to come together and emphasize the whole value chain build up for green hydrogen in the future that is our effort on hydrogen the company called genvia which we just launched in january yeah so hydrogen is so important actually in prequel institute here we are planning to launch a major initiative on clean hydrogen so i'll keep you updated bruce now let's turn to you um we touched upon a little bit on direct air capture of course this is very important but very very challenging problem uh require technology innovation earlier we have seen we hosted the bill gates event right here in the global energy dialogue and he mentioned direct air capture and you have seen in the news uh teslas uh co-founder ilam mask um giving a hundred million dollars price for direct air capture chevlon um your company has also invested in these da c technology can you explain this technology to us and why chevlon is interested in this well direct air capture is you know the most it's the shortest path to reducing co2 in the atmosphere the challenge is one of physics though it's it's takes a lot of energy to take a dilute stream or dilute co2 as it exists in the atmosphere and concentrating it to the point that you can do something with it whether you sequester it underground or you put it into a process to put it into some other beneficial reuse we have another investment in a company that would take co2 and turn it into a alternative aggregate for cement so anywhere where you have cement that could be a permanent storage of carbon but you got to capture it first and so that's the great that's the great challenge we invested in a company called carbon engineering it is a direct air technology based company in the processes you bring air in over very large fans and you use something to take the co2 um out of that air concentrate it and then give you the opportunity to do it and we know you know the physics work or you know the chemistry works it's a question of how much energy do you have to put into it what sort of cost is that and if you know at high cost it's a barrier to being able to scale it broadly but with many things the first iteration the first example is a high cost and you know you get on a trajectory of learning much as we've seen happen with wind and solar so we have great interest in it but if you look across the spectrum of where you would go to abate carbon you would start at a place like mandoda because you have a confluence of supportive factors both technical policy and other and you would work then towards less dilute streams or less dilute streams ultimately getting to direct air capture but you can't do this all sequentially every time you look at the scale of the energy system and you mentioned earlier either car park 1.4 billion cars and what that consumes that's a very large number and that's a very significant thing to consider in terms of how do you evolve that and make that lower carbon it doesn't happen overnight so what we observe is you have to do all of the above as you try to look at the math of relying on any one approach any one technology the scale gets so big that the likelihood you can implement and accomplish society's objectives aligned with the paris agreement you know seem more remote but by an all of the above approach we think it's much more likely and so we have investments in a number of aspects of lower carbon future technologies including direct air capture and we started those today because we believe making progress today will be important for it to play a role in the future but there's much that has to occur from day to make that economic and give it the potential to scale but but we see great promise and that's why we're invested thank you blues back to you sally okay thank you e um so so let's get back to the to the principal topic of today's conversation that is like scaling co2 capture and storage uh and just to provide a little context you know this is a technology that actually got it started in 1970s uh where we began pumping carbon dioxide back underground to enhance oil recovery so the basic technology of drilling and co2 injection you know really it was established then um and then in the 1990s uh stat oil uh as a consequence of responding to government policy uh that re that penalized atmospheric emissions of co2 they began to do co2 capture and storage with the specific purpose of of mitigating climate change and if we look since then the technology has grown at a rate of about nine percent a year and if we have any hope of getting to five to ten billion uh metric tens per year we need to you know double at least double that rate of rate of growth and so you know I think we're at a very special moment where uh policymakers and the public and and you know leading thought organizations um you know are making the case that this is an important technology and and I'll just point to the IEA on on you know Monday came out with its report on you know how we could hope to achieve a net zero by 2050 and they really highlighted the critical role that the carbon capture and storage place so uh so now imagine in our audience we've got uh you know we've got influential policymakers and you you know make the case for what are the three most critical things that we need to be able to sustain the momentum that that that you and others have begun today and and bruce why don't we start with you well so um you know thinking about policymakers I think having uh supportive policies are important in the LCFS program as an example you have to qualify pathways you know what activity are you doing and how does that contribute to the ultimate goals of the program um and and for other you know policies maybe that don't exist today you know thinking about what the opportunity is um you know the what we've observed in in policies in general if they can operate at the highest possible level if they can be technology agnostic and if they're aligned with what you know we're trying to accomplish to society those those from a policy standpoint are you know the very best there's a tremendous amount of innovation in our in our companies in the economy overall in places like stanford and you need policies to unlock that innovation and take you places that you might not have expected so you know you may to put it in more direct terms it's helpful for policy to help us establish the goal or the objective but not tell companies and organizations that might be engaged in this how to do it because the how to do it is often where the real innovation occurs and and we get surprised in in in so many ways in that regard so you know you could probably fill one two and three in policy but there are some technology you know things that have to happen as well they're you know the learning curve that has to exist and it gets to you know a hundred you know detailed things in terms of well which chemistry you're using are you using something that's solid do you have electricity and how you're trying to you know separate co2 from the atmosphere or whatever the stream is there's there's a number of of of things in that regard but but most broadly having aligned policy very important to be supportive and not you know stymie innovation and I think that's probably the place that I would start um well I mean I think Bruce covered the the subject quite well and it's very difficult to sort of say that at this high level these are the three most important things but there is devil in the detail a little bit you know so for instance I'll pick up just one or two detailed points related to that certain thing needs to happen need to happen but then there is you know for for instance one issue on just carbon capture and sequestration is that I think the process for classics permitting which allows you to pump carbon dioxide into the ground it exists but that process takes a long time and it takes for me thinking about it from a technical regulatory point of view it is way too long to be able to enable all this scale up to happen you know so somewhere there has to be a dialogue with the policy makers as Bruce was saying where we are able to go back and say hey these things need to change or else we will go we won't be able to progress on that on a fast in a fast in a fashion and we're not talking about trying to circumvent or to go past certain things or ignore certain you're talking about just the process need to be sped up it's it's technically and from an assurance standpoint quite robust and it can happen much faster similarly on the other side for instance we're going to work very hard on let's say decarbonizing a cement plant or something well the cement that is going to come out of that plant is going to be quote unquote a low carbon footprint cement you know well there is not a market mechanism or regulatory mechanism today to make that cement different from all the other high carbon footprint cement if you like you know now there may be it's sort of advanced companies like Chevron or Microsoft or someone who will say that the cement I acquire will be from certain places but you don't want to leave it to some kind of a good will from a company to be able to do something like that there has to be some kind of a system by which this thing gets formalized to give it a lot more impetus you know so again you know you need to then raise it to the level that Bruce was talking about where the policy has to be has to be able to follow some of these practices such that it takes away the roadblocks or the difficulties of making these things commercially viable you know if these things are not business and commercial commercially viable then it's just not going to scale up if you and technology which is what most people come to as soon as you talk about it like direct capture or something that's not the issue today today the issue is scale up from where we are and for the scale up there is low hanging fruit if that doesn't happen well direct capture will never going to happen so let's do the stuff that we can today with our means today and take the roadblocks out of the way for that such that carbon capture and sequestration becomes a viable business for the future I think that's that for me I think that if I could pass that message saying the policy makers need to be tuned in along with agents organizations such as yourself from the precourt institute or other other parts of stanford and there are so many people who are lending to the thought leadership in this space if you want and you guys do an amazing job to move this thing forward we have to pass this message through a ruin or through whoever it might be but this needs to reach the right people so that we all work together to make this thing move forward okay thanks very much e back to you yeah the conversation so far has been very exciting now let's come to the fun part of that it let's get some questions from the audience well let's start by having our students questions joining us today are two stanford students uh gurgle one and koream a break uh gurgle is a stanford pierce student and energy resources engineering she is currently working with uh actually with sally on the topic of simulations for co2 geological storage with machine learning approaches koream is um stanford mba student uh and with master um and uh stanford earth uh with both of them joining us i think representing pretty the broad background let me bring uh gurgle and koream to the stage which one do you want to go first um thank you i think i will go first sounds and thank you again to bruce and ashok for joining us today so for the first question for both bruce and ashok in your opinion what's the biggest technological challenge that you expect given the mandora project will be a first of its kind operation well technically i think we we haven't spoken too much about this here but the gasifier that takes in this waste biomass from the farms uh the input waste biomass uh has to be at the the right configuration to be able to go into this gas and how this gasifier manages to uh yield the gas that goes into the turbine uh is an important challenge and these turbines have not been used in the past to do this kind of work which captures 100 of the carbon dioxide so to actually make it work at scale for 300 kilotons uh is also a technical challenge you know now from there on the carbon capture and the the sequestration itself um is i would say less challenging uh although after we have sequestered for some period of time to make sure that the sequestration is progressing correctly um so maybe using some of the work you are doing in carbon capture and sequestration uh surveillance and assurance uh with simulation in the future using machine learning maybe uh those will be interesting things to come in the future but in the immediate execution i think there are execution or project management issues but besides that technically these two the gasification and the the electrification from the gas uh are technical challenges that we have to contend with there's a lot of people working on it so i don't think it's ins and insurmountable and from a fundamental standpoint it works but we still have to engineer it to to execute what we have planned mm-hmm thank you for the answer and bruce well i don't know that i have anything really to add i think ashok put his finger on the you know the two particular technical challenge which makes this the first of i mean you pointed out that we've operated are operating a carbon capture project it's a four million ton per day carbon capture project in australia and so you know the parts of it that are common to mendota doesn't feel like serial number one for us and he put his finger on the two technology issues that i think you know are are at the core of what we've got to prove out in this project thank you bruce and ashok i am my question is around the value of death uh commercializing the first of a kind um one can say that corporations have more patient capital than venture capital or private equity i want to ask you to what extent do you think that is true and if so i'd appreciate if you can elaborate on to what extent are you willing to take a higher risk on early commercialization to achieve a longer term strategic position or sustainable returns well i think uh you know different forms of capital allocation in the economy have have different roles um you know you see a progress being made through a variety of different you know scale companies with different kinds of capabilities a lot of innovation comes um from small companies um and you know from firms that are backed through venture capital investments we have a venture capital arm as part of our company we've had for about 20 years investing in startups and you know kind of early concepts at the same time chevron and slumber j i think for that matter long dated companies we have a history of 140 years and we have because of our long standing success the ability to be patient and work things that are long dated um that carbon capture project that we referred to a couple times in australia is associated with our gorgon project and that was about three decades from the original discovery of the resource until everything aligned policy uh commercial terms customers uh partners that we're going to do it and a company like chevron has the staying power to stay with a good idea and and see it through and so i think that's that's important we in our internal capital allocation we segregate things a little bit so um you know opportunities that might you know have great promise but lower um near term financial results we we look at in one way others that are part of our mainline business we look at in another um but we ultimately think uh for our business that we have to simultaneously meet the needs of our investors which is higher returns and the needs of society which is lower carbon and those are you know one or the other there are things we have to do at the same time and so our approach of how we think about capital and and our ability to stay with things in a little longer term i think is constructive in that but there are roles for others to play and even in mendota you have companies of varying scale and a varying structure that are coming together to partner and i think it's a complementary capabilities that we bring that's going to make this project successful so i think what bruce said in the end is very important is that uh i think the way the the four companies came together they cover enough characteristic that in terms of tax equity or in terms of lcfs and there is enough knowledge and capability that we would be able to handle most of the situations i think but moving moving the question from simply mendota to carbon capture and sequestration and there are in the united states alone today there are probably i don't know like a hundred projects which are being worked on and we are involved in quite a few of those with different sectors of industry and it's not limited only to corporate capital there is plenty of private equity capital which is being considered for investment into these projects you know so places like in the midwest where there is biofuels with carbon capture possible where where the the emission streams are quite concentrated it's going to happen with private capital actually you know there are places in louisiana where there are hubs that will be created they may happen with corporate capital with a big oil companies but they could happen also with private capital so is one or the other more suitable well i think in innovative configurations like mendota you need different types of thinking process the tax equity and the lcfs monetization and so on for that you need expertise if you like so companies like this can maybe do it better sometimes private equity is quite tuned to doing these kind of things you know so i i i hope and that a lot of capital gets leveraged into the carbon capture and sequestration process private and from corporations okay we're going to move now to the first audience question and so the question is and it's for both of you really can you talk about how digital technology helped you scale from the idea phase to eventual commercialization and and maybe i'll sort of shift the the question a little bit because i think one of the things that a lot of people don't realize is that the oil and gas industry was actually a huge consumer of digital technology and continues to innovate in that area you know thinking like as a reservoir simulator creates a digital twin of you know the subsurface so anyway so yeah so over to you what what is the role of digital technology and innovation in the space for you i'm going to say one thing here which is an interesting little twist in which there is something to do with digital that is meaningful for mendota interestingly chevron chevron slumberjay and microsoft actually are today working on and started working on a digital collaboration for the oil and gas business about three years ago or 2019 i think we announced it in 2019 but we started working on it a lot earlier so the partners are have already understood how to work on something which is quite groundbreaking in the oil and gas business as well where chevron's moving all its data to cloud and slumberjay doing the same and moving all our applications that we work on together to cloud and leverage it for more efficient workflows and processes in the oil and gas business the same three constituencies actually came together because we are partners to do something quite daring and different in the problem capture and sequestration process so it's not like mendota is going digital overnight but the fact is that that digital collaboration helped this collaboration to to proceed further now i think the in the world of new energy actually and i'll spread this question to new energy it's a very interesting place for digital because the legacy is very very small if you want so for all our hydrogen work that we are doing on solid oxide electrolysis or some of the work we will do in in mendota and other projects like bex projects if i may say they are going to use digital configurations which are very modern and they will be built on azure right from the beginning maybe and so there will be future compatible if you want right from the beginning so native digital if you might if i may say like that you know we're working on a building heating and cooling system where the we start off by a digital system working on cloud so the opportunity that we do even project management in the digital way the project the execution files pass to operation files in a seamless manner because this built on cloud and with collaboration happening on cloud the fact that we can innovate on an ongoing basis all this will be natural components of working in a digital way in the future in new energy because the legacy doesn't exist that you have to transform if you want and wherever we are putting something in place we are going to make sure that it is cloud compatible and uses all the platform attributes that one uses in digital today okay bruce would you like to add anything well i agree with ashok that i think that role of digital is going to be very important in new energies you know there are some things that are different like you take the electric grid you had kind of constant supply as the main you know what it was mainly built around and variable demand and you optimize things a certain way now with renewables occupying a bigger part of it you have variable supply and variable demand and that's that's a different kind of challenge and so we as an industry have used digital digital tools for a long time some of my early days were running reservoir simulations and i think our industry where some of the early users are instigators of the development of supercomputers and we've you know generally found ourselves at the edge of what is what is possible and the challenges as i see them that we're facing in the energy transition you know just to me we're going to be using digital in all forms the things that we do around hydrogen around smart grids around carbon capture and some of those just like we have in our traditional business they'll have digital twins associated with them so we can figure out ways to optimize and you know to the point ashok made i remember my very earliest days plotting production from wells by hand with a pencil and a piece of graph paper you know and we had lots of that that we we weren't a digital native in that industry that you know we were digital immigrants the digital came and we had to move it into the things and work processes that we were doing with the energy transition we have the opportunity to build it from the get go in a digitally smart fashion and that opens up a lot of opportunities and will i think be responsible in part for the progress we make in costs and the ability with the right kind of alignment to really find opportunities to commercialize things okay terrific okay we'll go go back to you thank you so for the next question i want to dive deeper on the mandoda project so the goal is to remove 300 000 tons or 0.3 million tons of co2 per year so i'm curious at what are the factors and the reasoning of choosing this target let's start with group well you know so the project design is a function of many trade-offs at the end of the day you know the you know what equipment do you have available to select from what's going to be cost effective what feedstock do you have and how certain um and do you have around you know around that the the scale of the project you know you have to have something to get your mind wrapped around in many ways to me accomplishing this and being able to stand back once it's an operation and point at it and say that is a commercial project to me you know the gateway value of this is very important you know it has to check all of the boxes it has to deliver power it needs to be carbon negative it needs to be commercial you know we need to effectively you know meet those technical challenges that ashock described but you know we've learned in our in our mainline business if you can design once and build many times that's a good pathway to scale and so the size of this you know it's got to be something that you feel like you can you can execute around and so you could be bigger or smaller but it seemed you know reasonable confluence there i don't know let me ask ashock to to weigh in as well because i think he's probably got some thoughts in in this space well i mean i think we had when we started working on this we had uh five different plants that exist already because one of the interesting here is that these plants exist already and we're going to reshift them into bioenergy with ccs they used to be bioenergy plants if you like in the past right so we had the choice of a few and as bruce said we looked at who which ones were the most valid for the quickest most viable project if you like and this one which is used to be a 20 megawatt plant if you back calculate from that how much we could use we how much input biomass we could use and hence how much carbon dioxide would come with the air separation this this was the configuration in this plant which works the best you know so it might change by a little bit in the end but it's a function of selecting that plant and once we selected that plant then these numbers were in place you know but eventually there's a roadmap of doing many others like this in california and that will go to much higher numbers hopefully you know so this is just as we have said a starting project thank you now to karim thanks i wanted to talk to you about carbon prices uh carbon prices have been picking up with low carbon fuel standards sitting at around 200 a ton and the EU emission trade scheme almost tripling in the past year to around $70 a ton and many others that are coming online my question is how do you navigate the immense and growing transition in this in the policy space and maybe more specifically how do you deal with carbon pricing risk and volatility in your investment decisions either in new energy or in the fossil space maybe we can start with that shot well i think bruce is more of an expert on because working as an oil company an oil company always navigates these kind of issues and certainly the knowledge of lcfs in chevron is much better than what we have in slumberjay and that's why we have the complementarity but in general i think the the idea is that we've taken what is our reasonable numbers from the past history and what is possible with the current regulation and uh we are going to design the project and engineer it to be viable within the current known numbers in the in the market now the important point that we made in the beginning is that we are going to the lowest hanging fruit so we are taking a place where current regulations apply and make it commercially viable and economically feasible with the technologies that we have now i think the question you're asking is valid for when we this is going to scale to tens and then hundreds of megatons you know then how will people navigate those those uncertainties of of let's say market mechanisms or regulatory mechanisms you know lcfs being let's say a market mechanism and 45 q being a regulatory mechanism so here here is where then what we said earlier policy has to fall you know policy has to be tuned in and policy has to follow otherwise these risks are going to not going to work or maybe the banks have to come up the financial system has to come up with the right solutions or the insurance systems have to come up with the right solutions right and these are not something that i govern and i have knowledge of for chevron does i think the system needs to progress in this direction yeah i might i might add you know the carbon price or you know the future volatility is another uncertainty that we that we have to deal with you know in our business for a long time we have a lot of investments in the oil and gas sector and those are commodities commodities have volatility and uncertainties and we have reasonably sophisticated internal processes and models that we used to do that look we look at supply demand consumer preferences you know what was happening in the world economies and we are forecast you know those markets and i've done so for a long time the markets for gasoline and diesel and jet and you know as a part of that now and we've done this for some time you know carbon carbon prices uh those those forecasts which are done geography by geography because of difference in carbon prices say relative to oil prices oil is a global market that sets on a kind of common basis across the globe adjusted a bit for quality and some location differences carbon prices are not the prices in europe are different and are driven differently than they are say in the us and presumably differently as other jurisdictions adopt them as well and so there's an additional complicating factor but those prices as we forecast them then work their way into every evaluation every project evaluation that we do our financial analysis our consideration of financial impairments it becomes you know the central or integrated into every aspect where you might otherwise have any financial consideration because that's what it turns out to be looking on a project basis but we also recognize we have to have a fair amount of humility predicting the future is hard and while we have a view that we think most likely we test our views against alternative scenarios and are looking for project decisions in all aspects of our business to be robust across those scenarios and we'll do the same thing here with mendota but you know for other projects as well you know that will be important and it's we're not you know necessarily unique in contemplating that and you know the point that ashok made earlier um capital will be allocated to support the growth in this that we need when markets can reliably count on certain things occurring and you know carbon price that grows out of a certain kind of policy is important to that um and you know if it can be done at the highest level of the economy if it can be done in a fair and balanced manner it can be done transparently we think those are attributes that work really effectively and you know as as entities in the economy can begin to plan and anticipate those they'll act on that basis and you know a lot of momentum will be built as a result of it yeah blues and ashok these these conversations great um indeed in the audience there are a couple questions asking about how economically business wise for co2 capture storage characterization how does that work i think korean's question uh he asked you expand that broadly also answer the audience questions i will not repeat now let me get to um a different question from the audience uh can you be more specific about you know the technology already working so well today for carbon capture storage in this category and what's in the pipeline we have earlier earlier we have discussion on this already i think the discussion probably spread and it's a good chance to uh you know to be concise as and tell the audience so what's available today what's coming next who wants to take this blues or ashok you know the the things that probably work the best today you know are less in my mind a function about the technology than they are about the stream from which you're attempting to capture things so streams that are very concentrated typically i think are in a better position today um the technology seemed to revolve around what do you use to take a somewhat dilute stream and concentrate the co2 to a point that you can do something with and there are different chemistry and different physical uh principles that are being pursued in that regard and and what i see and you know and we're invested in a company called savante um which is making a device that you can put on a boiler or something with a somewhat dilute stream and um you can concentrate that and you know they've gone through an evolution of the kind of material they're using to make that happen and that's you know typical and you know the sort of it it parallels a bit what we've seen happen in wind and solar with more efficient turbines uh you know more aerodynamically efficient blades on windmills uh more effective solar cells that can turn solar energy into electricity that same sort of thing but right now um you know it's largely determined by the stream that you have to work with we want to move to you know increasingly more challenging streams eventually getting to direct air capture and it's that technology how do you take something dilute and efficiently from an energy standpoint concentrated i think is at the core of what we're really chasing so ashok i'll you know turn it to you yeah i i think if i if i were to kind of generally make a statement without going in i mean this is a broad subject so it's hard to sort of just narrow it down uh broadly uh as we said there are uh different streams and uh in all those streams there is work going on and technology companies that are working on innovating various aspects of it you know so today we are aware of what's happening in the biofuel industry and there there is a lot of possibilities i think tens of megatons to be captured and sequestered with known technologies if you want there is the blue hydrogen industry which is going to uh to start where in an smr process which is producing hydrogen from gas uh you are able to capture a very large portion of the carbon outside and you'll be able to sequester to make the hydrogen clean uh in a cementing process you are not able to capture a very large amount but you are able to capture enough to be able to sequester to almost half the the carbon footprint of the cement and similarly there are numbers in steel and so on so in all of these sectors which are large co2 emission sectors there is work going on to be able to capture and sequester the carbon dioxide and there's plenty of runway right now to start uh these projects and these businesses and as we work on these projects that can start already there are very innovative companies which are working of course on direct air capture which is much further down the road but on dilute streams through again the physics of either the pressure swing or the electrochemical swing or the chemical swing of adsorption distortion all the physics exists but from the physics to actually engineer a solution that you can apply to an existing stream it takes a little bit of work and there are engineering companies that are working on dilute stream carbon capture which will be in numbers that are good enough to be able to make a project economically viable you know so if I may leave a message there is plenty of road map which is viable today you know so we need to just embark on the business on the heavy streams where it is obviously viable and then keep on growing the more dilute streams as technology and innovation develops and there's lots of room for small innovative companies that will come up and do this innovation and then companies such as ourselves and Chevron will scale these technologies to make these projects viable okay um so we've talked a lot about pumping co2 back underground um and the question from the audience is well what about co2 utilization can we you know make products with it um yeah love to hear your thoughts on that well in the interest of conciseness the short answer is yes we can you know we are mentioned earlier we're invested in a company that will take carbon co2 and use it as the feed for synthetic aggregate and so everywhere you know we're in i'm in california here so i5 i10 every freeway and and um the la basin um you know all the way across the country that all is potentially um you know carbon sequestration location as well as new buildings and and so there are um utilization opportunities well we're probably going to have to avail ourselves of both once we've captured the carbon some of it is going to make sense to sequester and i agree with ashock let's start where we can and make progress and um you know the the progress here i think will open other pathways to us and at the same time identifying places where we can utilize it um to some other better benefit will will be important but yes those those opportunities exist and uh we can and should pursue those i i think bruce said it all but in a very concise message i think to if the world is going to decarbonize by using carbon carbon management in terms of carbon capture and sequestration or carbon usage then the most urgent thing to do is to get the business of carbon capture and sequestration going that is today the most urgent question hi uh bruce and asho thank you so much for the great conversation uh i'd like to thank all the audience around the world also thanking our student participants participants we started the global energy dialogue last june soon after the call we locked down this has been a great event at stanford we hope this have been serving the purpose for the whole world bring the energy experts together to really discuss about how do we decarbonize you know we started with the conversation with secretary ernie monides steve chiu and then with chat holiday uh so many great events be a gage calm and uh and last month we have our own priko advisory council member mike morgan and dal kimmerman and bruce and asho and thank you so much for sharing with us your perspective uh with these global energy dialogue now lasting for a year many of us all get vaccinated we decided in the next several months is our summer time we will take a break so we'll go to the beach and thinking hard about how do we do energy for the next step we'll resume after the stanford start a new quarter in the uh in the fall thank you so much bye