The Emission Trading Systems is the cap-and-trade carbon market that Europe has been using since 2005 to decarbonize its economy. Companies have to pay to pollute, and this week that price hit an all-time high as it traded for over 100 euros/tonne. In the first segment of today’s show Na’im Merchant and Asa Kamer discuss the significance of that milestone, what it might mean for the CDR industry, and news that Lanzatech became the first carbon capture company ever to go public.
On the other side of the planet a different government made steps towards capitalizing on the money flowing towards carbon markets. Earlier this month, Alaska’s GOP Governor proposed a package of bills that would expand the state’s ability to store carbon via both forestry projects and underground storage of CO2 if passed. Will these ambitions contribute to actually increasing carbon sequestration?
On the second segment of today’s show we explored this topic with one of the people behind Alaska’s push toward carbon management: the state Department of Natural Resource’s Deputy Commissioner John Crowther.
Radhika is out this week, this episode is hosted by CRN producer Asa Kamer.
On This Episode
Na’im Merchant
Resources
CCUS Investment Hits All-Time High
Alaska Governor’s Proposed Legislation
Subscribe to Climate Workers Anonymous
My other show, Reversing Climate Change
Books referenced in the podcasts, at Bookshop
Full Transcript
Announcer: You’re listening to Carbon Removal Newsroom, a weekly show about current events in the world of carbon removal, from technology and innovation to policymaking and job growth. Brought to you by Nori, the carbon removal marketplace.
Asa Kamer: Hello and welcome to this week’s edition of Carbon Removal Newsroom. My name is Asa Kamer. I’m normally the producer of the show, but since unfortunately we don’t have our regular host Radica with us today, I’m going to be taking over for the week. And we’re going to do two segments today. We’re going to do it a little differently. In the first segment, I’m going to be speaking with our regular panelists, Na’im Merchant, about some big doings over in Europe related to their carbon price, which went over 100 euros a tonne for the first time.
And that’s the result of some recent policy changes. And we’re going to get into that. And we’re also going to have a second segment today. And we’re actually going to be speaking with a representative of the Department of Natural Resources in Alaska, their Deputy Commissioner, John Crowther. And we’re going to be talking about a package of legislation that Alaska’s Governor Mike Dunleavy has proposed related to carbon management that includes some pretty So that I think will be hopefully quite informative and interesting discussion. But to start things off, Na'im and I are going to get into it on the price of carbon over in Europe.
So welcome, Na'im. How are you?
Na’im Merchant: I’m doing well, Lisa. Thanks for having me on.
Asa Kamer: Yeah, thank you for being here. So can you tell us a little bit about what’s going on with the compliance carbon market over in the EU?
Na’im Merchant: Yeah, I think as you kind of referenced earlier, the past several days we’ve seen the EU carbon price, which is based on the European Union’s emission allowance contract, has climbed above 100 euros or above 100 US dollars a tonne for the first time. And so this all kind of refers to allowances that are traded under the EU’s compliance market, their emissions trading system. And these emissions contracts, they launched in 2005, I believe. And so this is the highest that they’ve ever traded. So there are a lot of reasons for this increase.
I think you referenced policy changes. I know that there were some agreements made In recent years around reforming the system that I think resulted in a bit of a rush by companies to buy credits to cover last year’s emissions based on some of these kind of recent carbon market reforms. But we generally have seen The price on carbon on a per tonne basis based on these allowances trend upward in recent years, though I should point out that it was fluctuated significantly. There’s been increases and sharp decreases sooner after, but it’s directionally kind of moved higher and higher, and that’s kind of how this is supposed to work.
And so it’s kind of now surpassed an important psychological barrier of 100 euros a tonne. And so I think that’s an important kind of price point for people to anchor on that will, I think, incentivize companies in the EU block to accelerate their decarbonization efforts. But, you know, I think it’s important to recognize that this is great for kind of thinking about carbon pricing and It is an important psychological barrier that’s been kind of surpassed. But this is a price that has significantly fluctuated in the past. So it’s not clear how long the carbon price at this point will remain at this level.
But like I said before, it’s been trending upward, which I think will have an important impact on how your industry thinks about decarbonization.
Asa Kamer: Right. And I think my big takeaway reading about this is that this market is set to eventually expire or the available credits are set to expire. And based on some recent decisions, I think in the past, And so it’s actually not that long that Utilities that burn coal or companies that make steel or cement in the European Union, they don’t actually have that long to figure out how to be carbon neutral. And especially, you know, I think you think about some of these industries, their sort of investment horizon is probably in that range, you know, 5, 10, 15 years, how long what they’re planning is.
And so, you know, I can’t help but think, you know, I know there’s a lot of detractors from systems like this, and I don’t think that they’re perfect. And You know, that’s a conversation maybe we’ll get into a bit, you know, the pros and cons of a system like this, but it really starts to feel like, you know, is there sort of a light at the end of the tunnel when it comes to at least one region? I mean, this is a real price to pay $150. And so I mean, I kind of have to feel like is the rubber hitting the road here a bit like is a decarbonizing decarbonization actually getting driven by the system and are we going to start to see, you know, some real strides towards that in the next few years here.
Na’im Merchant: I think that’s the way I’m thinking about it as well. This is a net positive development. And like you said, these systems are not perfect for a number of reasons. The caps that are created are typically meant to go down over time. They can not go down quickly enough, or sometimes they can just be increased out of nowhere. Plans to retire or permanently eliminate credits by future years can be reneged upon. There’s a lot of things that could change. But like I said before, directionally, this is exactly where we want to see this going.
And I hope that this breach of the $100 per tonne Level is an important kind of psychological barrier that we need to get through for companies to really make these sorts of decarbonization changes and start doing so soon.
Asa Kamer: You know, to think about it in terms of carbon removal and some of the carbon removal, you know, companies that you work with, Naeem, I feel like the obviously the vast majority of these kind of credits aren’t being Satisfied with, you know, what we might call carbon removal or durable carbon removal or some of the stuff that we have, we spend a lot of time talking about on our show. But I guess I’m hopeful or I want to be hopeful that this kind of continuing, continuous price increase will lead to more funding for carbon removal and hopefully actual more climate impact from carbon removal projects if these, you Prices are going to continue to, well, not the prices, but if this compliance market is going to continue to have its price go up and companies are going to continue to incentivize in investing in ways to decarbonize, is it naive to be hopeful that some of that funding is going to help jumpstart carbon removal potentially in Europe?
Na’im Merchant: Well, I think it offers an important kind of Abstract market signal for carbon removal. I don’t know that it means a whole lot for carbon removal in the near term, right? I mean, while there are kind of efforts ongoing right now in Europe to develop a voluntary certification framework for carbon removal, right now, it’s not possible to use carbon removal for compliance within the EU emission trading system. So, you know, right now, I don’t think this is going to have any near-term impact other than Thank you, CDR developers in the future, you know, if that changes and if CDR is, you know, more prevalent in some of these compliance systems like ETS, that there’s a chance they might get upwards of $100 a tonne.
And so I think that’s good. I think if I’m a carbon removal company, I’m looking at that positively and that’s great. I just don’t know if it converts in a way that benefits CDR anytime in a near term.
Asa Kamer: Gotcha. And that was almost double the record, which is from the previous year, so that this one analyst basically found that the investment in CCUS is high and growing. And so I just wanted to ask you, what do you think that implies?
Na’im Merchant: Well, I know you know this, but CDR and a lot of the analysts out there bunch these things together. CDR is not a subsector of CCUS, right? That’s an important distinction. CCUS does not result in negative emissions, but I think CCUS will do quite well in an environment like this. I think one challenge that CCUS has is that the supply of the kind of baseline supply of CCUS in Europe, not even talking about CDR here, is relatively small, right? If you’re thinking about an economy the size of Europe, CCUS supply is relatively small.
And so while the carbon price that we’re seeing in Europe will benefit technologies like point source carbon capture and storage, CCS, which at scale is typically lower than $100 a tonne, there’s just a lack of kind of baseline investment in CCS to build for. So when kind of thinking about the supply or how some of this impacts supply, Yeah, it’ll get there. And I think, you know, this investment you’re talking about is good for CCUS and there’ll be an increase in supply as a result of being able to do more with that capital.
But in the context of Europe, when we think about this carbon price and the ETS and all this, you know, there’s a lot of catching up to do in Europe around CCUS in general. And so I think it’ll be, I think, sluggish at first because there’s not a lot to build from around CCS in Europe. And I don’t think it will really have that much of an impact on CDR until CDR is really considered a viable pathway within something like the EU emissions trading system. So I don’t know, not to be a wet blanket, this is all good news, but I think it’s going to take some time for it to kind of convert into new supply for CCUS.
In a meaningful capacity in Europe, which is an important economic block. It’s massive. It’s the largest economic block taken together. And I think that the impact on CDR is therefore even further growing.
Asa Kamer: Sounds like, you know, what I’m taking away from what you’re saying is, I think a theme that comes up. From time to time in our business shows, which is that the theoretical demand for carbon removal is quite high when you base it off of the size of carbon markets, the growth of carbon markets, and the related investments in this sort of general space. There’s clearly a demand both for The actual removals and a demand for companies that can be invested in that can successfully sell those removals. But we’re still at a stage where the industry is struggling to mature to the point where it can meet that demand.
And so you still see billions going into traditional forestry offsets and... Maybe even more dry powder, as they say, ready to go towards carbon removal when the techniques and the companies come about that really are worth it. And one more thing I wanted to touch on while we’re talking about the European market is... Something that comes up a lot in these articles when you’re reading about it is there’s always – they manage to get this quote from the environmental group or the politician who might say, well, this system allows people to pollute, allows them to continue to pollute.
So I mean I feel like you’re pretty – you have a pretty sophisticated knowledge of like industrial policy. What do you make of that? I mean, obviously it’d be great if everyone could just cut their emissions, but at the same time, I don’t know if Europe’s ready to just not have cement and steel being made or have the lights on in places where they haven’t built enough renewables. So, I mean, what do you make of that argument? Is there truth to that?
Na’im Merchant: Well, I think the risk with something like any kind of compliance market that exists out there is that if it’s not well-regulated, And if it is not stringent enough, there are a lot of opportunities for polluters to continue polluting in a way that doesn’t get us anywhere near our climate goals. And so, you know, I think what folks need to do who are in positions in government that oversee these projects is just, you know, we need to make sure this doesn’t happen. We need to make sure that if there are trading caps in place that they are appropriately stringent and that they are, these caps are coming down.
That’s the whole point of a compliance market. You know, we are seeing kind of continued increase in the price to continue polluting, right? If companies anticipate, well, this is $100 a tonne right now, but it’ll probably go back down to $50 or $60 a tonne next year, they might not be incentivized to kind of make some of those changes. So there’s a number of policy tools that can be used and regulatory tools that can be used to try to make sure that these markets are stringent enough that it really, really enforces kind of the industry to Or incentivize the industry to decarbonize.
And I think a lot of companies are looking at this price per tonne and they’re thinking, do we want to continue meeting our obligations by purchasing compliance credits that become scarcer and scarcer every year and appear to be trending upwards? At a certain point, it’s going to make sense to start rapidly decarbonizing. And if I’m then, I’m looking for low-hanging fruit to decarbonize my operations for well under $100 a tonne.
Asa Kamer: Mm-hmm.
Na’im Merchant: And I’m going to get serious about that. But I think what’s lacking in a market like this is the price certainty, because that’s just not built into something like this. And so that can be hard to manage. You know, the right operating principles around something like this that ensures a level of stringency that generally sends a signal to the market. This is going to get more and more expensive as time goes on. There might be fluctuations in the price here, but this is going to get more expensive as time goes on.
And we are going to continue like lowering caps and we’re going to be serious about, you know, eliminating portions of these credits over time. And we’re going to actually do what we say we’re going to do. If regulators and policymakers are serious about that, then this can work. But if they’re not, then I think the folks on the environmental side that look at this with some degree of skepticism, they have a strong argument as well. So it just depends on how these things are implemented all the time.
Asa Kamer: It’s all about implementation. It’s what I hear a lot of people in government say, and the devil’s in the details. I recall a talk from Klaus Lackner, and I think he said that eventually DAC can set the price for carbon because once you have a cost per tonne from DAC, anything below that, if it’s Cheaper than spending, say, $200 a tonne for DAC, you’ll decarbonize that way. And so that’s, I guess, the promise of a mature CDR industry, which hopefully comes around one day, is that companies, governments, whoever will have the choice to say, do I want to pay that cost to permanently sequester?
Or if it’s anything below that, I’ll just decarbonize that way. And so that would be That would be the hope that’s how it turns out. So one more business headline that I’d love to talk with you about before I let you go. Just when we thought the climate SPAC boom was over, Lanzatech, which is a company that makes products or is working to make products and fuel out of captured CO2, announced that it became the first carbon capture company to go public, which is kind of a big deal. So did you see this announcement?
And what do you make of that? And do you have any thoughts about LanzaTech and what they’re trying to do?
Na’im Merchant: Yeah, I noticed that as well. And I think it’s cool to see any climate tech company get an increase in investment. I think this transaction landed, I think it was like $240 million for the company. Yeah. And I think they’re going to deploy some of that or all of that, I guess, to expand its carbon capture and transformation technologies. And they have a number of interesting partnerships in the space that I think are interesting to look at. Yeah, and listen, I think this is great and I think it’s potentially a huge boost of confidence for companies in the carbon management field generally.
I don’t know what it pretends for carbon markets per se, but I think it’ll actually be an interesting test for how a company involved in carbon management will navigate the pressures of being a publicly traded company. Up until now, these companies are privately held. Some of them have seen significant investments in private equity deals and all of that. But this will be the first time that we see a company that’s involved tangentially in a space that we care about. And that’s a publicly traded company and is subject to the pressures of being a publicly traded company, right?
This is the case with many public companies. It can be really hard to stay focused on the long-term view. And they are often trying to meet these kind of short-term quarterly expectations of investors. And so that will, I think, impact the types of Projects and risks that the company is willing to take on. And so, you know, I don’t know a whole lot about Lanza Tech aside from some of the kind of interesting partnerships they have in the carbon utilization world. But I think a lot of companies are going to be watching the space and watching Lanza Tech and seeing what happens and learning from this experience in the coming years as we see more and more companies involved in the broader carbon management field.
You know, attract a broader array of investment, especially in public markets. And I think that’s going to be interesting to watch and see how it changes their trajectory as a company and what that means for the broader community.
Asa Kamer: Yeah, what you’re saying is really interesting and I agree. It’s going to be interesting to watch what it means for a company in this space, which is, you know, we often hear the word nascent get thrown around a lot. There’s not a lot of deployment. There’s a lot of research and R&D, but less deployment. So what does it mean for this company to, like you said, face the pressures of And on one hand, I mean, the optimist in me wants to say, you know, this is a show of confidence, they’re ready to get out there and deploy and start having revenue.
But then again, There’s been so much, you know, the whole SPAC thing seems to have generated a lot of less serious companies getting money by going publicly traded as well and not necessarily working out and fizzling quickly. Maybe not so much in the climate space so much, but so anyway, that’s more, this is where we need Susan here to kind of spell it out. But hopefully it’s a show of confidence to say like we’re ready to actually kind of deploy. And a lot of the coverage I was reading does I guess they seem to be maybe a little bit of a bigger company than some of the other startups.
Well, they’re not a startup necessarily, but then some of the startups that we talk about, and they have a lot of different segments within their business. They have a fuel, working on fuel, working on making ethanol, making tires, plastics, chemicals, all sorts of stuff. So kind of a more, maybe more sophisticated business and hopefully those all hit and work out. But yeah, something to look out for and went under the radar a little bit. But the fact that there’s a carbon capture company being publicly traded, I think is maybe We’ll talk to you next time.
Thanks so much. All right, everybody. Welcome back to Carbon Removal Newsroom here for our second segment. This is Asa Kamer again, normally the producer of the show, but I’m here to host this week. We have a special guest joining our panel, and it’s the Deputy Commissioner of Alaska’s Department of Natural Resources, John Crowther. John, welcome, and thank you so much for joining us.
John Crowther: Yeah, well, thank you. Thank you for having me. We’re working on some exciting legislation in Alaska, and so look forward to sharing a little bit about it.
Asa Kamer: Great. And so the reason you’re on is that Alaska’s Governor Mike Dunleavy has proposed a package of a couple bills to expand the state’s ability to store carbon via both forestry projects and underground storage of CO2 if this legislation is passed. So Deputy Commissioner, could you tell us a little bit about these policies and what is included in this legislation?
John Crowther: Yeah, happy to. And I think, you know, the governor’s real focus and interest on this comes from, you know, Alaska’s a natural resource state, you know, whether it’s our fisheries, you know, which go back, you know, in decades, and in fact, almost centuries in terms of active commercial management. And one of the real issues of our state and statehood and our time as a territory, obviously, the Alaska Native people, the subsistence use of those resources way goes back way beyond that. Mining is part of our history, both for gold and other natural resources, oil and gas development, a mainstay of our economy today, but also the use of our natural resources for recreation, tourism, major driver in Alaska.
And so I think, you know, the governor is a resource-minded guy. He’s grown up in it. He’s lived it, worked in it. He’s been approached by folks across the country and across the world about the carbon management, the use of natural and geologic resources to manage carbon. And so there’s a natural fit in Alaska of making our resources available for any and all development, and that includes the development of projects to manage carbon. And so that’s really the thrust, the impetus behind this. And naturally, as a resource owner, we want to make money from our resources to use as a government, as a sovereign, as a fiduciary and fiscal responsibility to the people of Alaska.
We want to use that money to fund everything from schools to roads to public safety. And so we are really excited about moving into this space more actively. And that’s the motivation behind the legislation.
Asa Kamer: Great. And I think there’s a couple bills involved in this proposal. Can you kind of break down what they are and what they’re trying to do?
John Crowther: Yeah. So I’ll start with what we’re calling our offset bill, but really it’s making the state’s lands and resources in our submerged lands, the waters that we own and manage available for carbon projects. And we see that happening in a couple of different ways, but we really see it, what we want to do is have an open, flexible framework legislation that allows project developers for typical and traditional forestry projects, but also for novel projects to come to the state of Alaska and say, we need some land, we need some forested land, we need some offshore land, we need access to this to develop a project.
And for us to be able to enter into those agreements, issue leases, issue disposals of those state resources so that project developers can stand up their own projects. And similarly, want to pursue those kind of projects potentially on our state-owned lands with state expertise, state agencies, like our Division of Forestry is very experienced in managing our state forest resources, our Division of Mining Land and Water, responsible for general land use, leasing. And so those divisions have capacity to facilitate, participate in setting up projects that are state-driven. And so that legislation, our carbon offsets bill, as we call it, We’ve seen private landowners in Alaska and around the country pursuing these kind of projects on lands.
We’ve seen in Alaska, we have Alaska Native corporations that are established by Congress, but owned by the Alaska Native people for the benefit of the Alaska Native people. And they also have large land holdings. We’ve seen them successfully do these projects in Alaska. So similarly, we want to make state lands available there. The first main piece of the package. The second piece is associated with geologic sequestration, what we’re calling our CCUS bill, Carbon Capture, Utilization and Storage. And so similarly, that bill is intended to make the state’s geologic resources available for project developers.
So if you want to lease subsurface lands for injection storage of carbon in the long term, the state lands are available to you. And, you know, just like I mentioned, for our surface lands and our waters, we see all sorts of existing uses. We see all sorts of subsurface development today in Alaska, primarily our oil and gas resources. And those same geologic characteristics that make us an oil and gas, you know, highly prospective oil and gas province also create very significant reservoirs for storage of carbon dioxide. We wanna make those state lands available as a core part of the CCUS bill.
We also wanna put in a regulatory framework. So whatever your land ownership, whether it’s on a state-owned land, private-owned land, there’s a strong regulatory framework for safety and well regulation, reservoir management, reservoir safety, that we have a regulatory framework there to enable projects. And so that legislation, similarly, we essentially wanna Throw open the doors and invite project developers and opportunity in.
Asa Kamer: All right. Thank you for breaking that down. So one thing that stood out to me reading a bit about this proposal is that on both the sort of biogenic and the geologic side, the theoretical consequences So I think that really stood out to me is that The, you know, compared to, you know, there’s a lot of states that could probably pursue something like this, and they might be able to have enough capacity to offset, let’s say their own emissions, but the scale, the potential scale in Alaska is so much higher.
I mean, I think you could end up negating far more than Alaska’s own emissions. So, I mean, what do you think it would, it will take, it sounds like you’re at sort of an early stage, but it’s also very ambitious. What do you think it will take to get to some of these bigger scale numbers on both the forestry and the sort of geologic scale for both of those?
John Crowther: Yeah, I think that’s exactly right. We’re in a, as we view it, a kind of an envious position, right? Where we have yet again a resource that the broader world wants. And so, as you mentioned on the forestry and the biologic offset side, It is our understanding that historically a significant amount of the credits in the California Air Resources Board market, the regulated market there, have been in Alaska. I think there’s some limitations on public lands being eligible for that program. So I’m not sure if we would see state participation there, but in the voluntary market for offsets and credits, we see if the market continues to grow, We have a resource that people are all around the country or all around the world are going to want to participate in.
You know, and I would just note for your listeners, you know, you may think, you know, and this is something I’m learning about, but, you know, you may think, well, Alaska is a large, heavily forested natural area. It’s already sequestering a lot of carbon. What are we going to do different that’s going to sequester more carbon? And, you know, from the perspective of somebody living here, you know, we have millions of acres that have both been killed by what we call the spruce bark beetles. So, you know, pest infestation and also millions of acres of wildfire, you know, a million sometimes in a given year or more in a year.
And so we have large areas that have been affected by wildfire, sometimes very severely that limit and slow regrowth, standing pest and beetle kill. And so an incentive and a drive to reforest, bring those areas back into productivity could really expand the forested areas in Alaska by literally millions and millions of acres. And so when you look across the entire US West or you look across Canada, there’s that similar kind of scale at a national level, but we really can bring it to bear just from a state level. As you mentioned, and from our perspective, offering those resources has the chance to bring revenue and wealth into our state for our people.
And so we really think of that as a win-win-win. And similarly on the geologic sequestration side, we have a few industrial activities in Alaska that may be interested in pursuing capture at their sources. But we certainly have reservoirs that in the event that people are trying to manage and ship Carbon around the world, we’d be a premier destination for those, for injection and long-term storage. So yeah, I think you’re right on that we are in a kind of unique position of offering our storage, not just for our own use, but for others around the country, to be sure, but really around the world.
Asa Kamer: Cool. And so for our listeners, can you... Just just given a bit of an idea. So if you have a forested area that’s been burned or degraded by the pine beetle, or, you know, there’s been some other disturbance to where some sort of restoration could lead to reforestation and potentially access to carbon credits, what kind of activities on the ground? Or what does that actually look like? Are there people out there just planting saplings? Is there more to it that to kind of enhance what nature is already doing?
John Crowther: Yeah, well, and I would never discourage any of your listeners from coming to visit Alaska because it is truly an exquisite and beautiful place. But, you know, I haven’t lived there, grown up there most of my life. You know, we have large parts, even in the readily accessible, you know, areas right by communities that have thousands and thousands of acres of dead standing trees due to beetles. And the state expends money to try and thin and prevent that wildfire risk from those non-growing, non-active, but, you know, dead in place trees.
But the cost is so high to clear them that, you know, we just, you know, from a viewshed, viewscape place that, you know, they certainly don’t look nice, but, you know, they are part of the natural cycle. But, you know, from ecological productivity, wildlife habitat, you know, those are not thriving prime areas. And with the increased forest fire risk, they’re at risk of whether you’re looking at it from a carbon emissions perspective or damage to the soil, damage to the mycology and ecology there. They pose a lot of quantitative and qualitative impacts to the state.
The activities to remedy that is, in the first instance, clearing those trees, whether it’s up where forest fire has been and there’s burned or consumed trees, or whether there’s that standing deadfall. Historically, there’s been an effort just to clear it to reduce the wildfire risk for further damage. When you go to look into reforestation, managing and cultivating a forest, that is stuff as simple as planting trees. But it is, you know, planting, thinning, managing so that those saplings can grow up. You know, when you have a totally cleared area, you want to make, you know, you can encourage the growth of certain kinds of species.
You know, in Alaska, our growing season is relatively short. And so you, you know, I’m not a ecologist or timber manager, but, you know, many of the initial succession species are very, you know, small, You know, fast growing but limited kind of ultimate growth scale. So you may in a burned out or cleared out area, you may go a hundred years before you start to see the subsequent species that are, you know, large scale Carbon sequestering and habitat promoting trees. And so being able to actively plant, cultivate those trees earlier in the cycle speeds up those ecological benefits from creating habitat, speeds up the carbon benefits from enhanced sequestration sooner.
And so having a motive to get people out in Alaska doing that is really exciting.
Asa Kamer: Cool. So sort of speeding up the natural process a bit. Yeah, that’s right. So you mentioned that in addition to, you know, sort of traditional forestry that this part of the aim of this would be to open up the use of public lands for other novel techniques. Um, is there anything specifically that you’re thinking of or, um, that’s, you know, that’s behind that, or have, have there been project developers or startups that have, that you’ve heard from that have said, you know, we want to do this, you know, beyond planting trees, some other sort of novel form of, uh, of, uh, carbon removal.
John Crowther: Yeah, so that, you know, there are, you know, and we’re, if folks have more ideas, we’re always happy to hear more and newer, but, you know, one of the- Yeah, that’s a call to our list.
Asa Kamer: Sorry, I don’t want to interrupt, but that’s a call to our listeners. Let’s get some information of these folks and, you know, we can be matchmaker here.
John Crowther: Yeah, come on up. From, I think the governor has been really interested in the offshore potential in the sense of, you know, and it’s still, there’s other parts of the country that are looking at it, but the growth of, of kelps and other aquatic species that are very carbon dense, but also potentially have other beneficial uses. We’ve seen an aquaculture growth in Alaska recently, different kinds of shellfish cultivation, kelp cultivation for both food products and other beneficial uses, but adding carbon to that list is a really exciting part of this effort too.
And that could be localized benefits, small projects in our existing communities that have that kind of ocean interface, whether it’s fishing or aquaculture today, just another part of that to boost those economies in that local industry, or really large scale. We have more coastline, more state-owned submerged land. Then the entire rest of the US, and folks who want to fact check that, just look at Alaska, see how our Aleutian chain stretches out way into the ocean. Each one of those is surrounded by state-owned waters. And so that potential is nascent, is developing, but I think is part of this, is just another exciting piece of this.
Asa Kamer: Great. And I know that you mentioned mining. I know there’s some folks working on using the mine tailings to treat them chemically to accelerate their natural sequestration of CO2. So there’s, yeah, possibilities are endless or the dead fall. I mean, there’s, A few startups here in California where I live that are trying to take the dead fall and turn it into biochar or other forms of some sort of carbon sequestration with that. So yeah, I hope folks, if you have good ideas, get up to connect with these guys in the Alaska government if this goes through.
So speaking more on the... Geologic side, I just want to, you know, if you could just give us a bit of an idea. I mean, we know that Alaska is a big oil and gas producing state. And, you know, something I hear a lot of when it comes to the underground storage of, you know, CO2 is that we’ll need the expertise of this industry that will need the workers, engineers, etc. So is that part of the Part of the impetus here? And how do you think about the criticism of this whole idea that it gives a lifeline to an oil and gas industry that’s contributing to climate change?
I mean, how do you guys sort of navigate that dynamic?
John Crowther: Yeah, well, and taking the second part of that first, you know, from our perspective, you know, we’ve worked really hard to provide a national commodity, you know, oil and oil has been valuable for, you know, For consumer reasons, for health and safety, for the expansion of industrial growth, the economy for a long time. Alaska’s contributed to that. We’ve been proud to contribute to that. And as part of our economy and part of our hope for continued development in Alaska, we hope to continue to do that. And I know personally and I know from a kind of an administration perspective, there’s people out there in Alaska and in our broader national discussion Who really disagree with that, but that’s part of our lifeblood and ethos.
So we don’t view this legislation as at all inconsistent with that. What we are really excited about it from is that there’s people all across the spectrum, but there’s a significant consensus that says the more energy we can produce with less carbon emissions, the better. Wherever you fall in the politics or the preferences, You know, that kind of managing the emissions associated with these fuels that consumers continue to demand is a good thing. And so, you know, we see if we want to keep being in the fuels business from the oil perspective, and we’re offering this carbon opportunity, both from the geologic sequestration, but also from the offsets perspective, you know, that just enhances what we bring to the table.
And so if we’re in a world where We’re producing oil in Alaska and we’re sequestering carbon both from those oil operations directly but also importing carbon from all around the world from the consumption of oil and other fuels. We’d love to provide both those services. So we see them working in tandem for the benefit of Alaskans. And for the, you know, in the sense of lowering global emissions from wherever they’re sourced from, you know, to the benefit, like we’ve seen from our development of our other resources, benefits to all of our export markets and the broader national and world community too.
So it’s, you know, we, like I keep saying, and I know it is my job and I do it because I love it to pitch Alaska, but we really see it as a win-win. And to circle back very quickly to the first part of your question, you know, that part of this, you know, it’s not why we’re doing the legislation, but it’s why the legislation I think has the potential to succeed is that, you know, we have trained highly skilled engineers, field workers, you know, everything from welders and truck drivers, which is a really hard job in Alaska to do well, to do safely, to, you know, geoscientists.
That know Alaska, that know our rocks, know our resources, know our surface. And so they’re a big asset for a program like this succeeding. And if we have people in that industry who are working hard, making money, and this gives them another opportunity to do more work, make more money, that’s great for our employees and great for our economy.
Asa Kamer: Cool. So one last question for you. You know, I don’t know how much you can speak towards, you know, the politics of this whole thing, but obviously this is just proposed legislation. You hope to see it passed, but it has to go through the legislature. Obviously there, well, there may be changes, you know, that’s often how it works. So how do you see the process from here towards, you know, between here and getting it passed? What kind of challenges might there be? What kind of education are you hoping to do?
What are you kind of foreseeing with that?
John Crowther: Yeah, we foresee doing a lot of education and a lot of meetings, briefings, formal hearings, informal meetings, just about everything to share, in a sense, the good news story that we’re hearing about these opportunities. And I think our biggest challenge, just as you said, it’s, you know, when you hear about these things, they’re very new to a lot of people. You know, there’s been a lot of discussion about, you know, emissions and carbon and those kinds of things, you know, that people have different perspectives, you know, across the political spectrum on those.
But when you start to talk about where we’re going to do a sequestration project and generate carbon offset credits, and then, you know, the state can benefit from those and we’re going to monetize them. In this way, and they’ll be traded on an exchange that’s brand new to people. And so, you know, a lot of explanation, education, talking out and understanding some of the unique dynamics of Alaska, you know, in Alaska, a tremendous number of people Actively use the natural environment for subsistence foods, to get out into the wild, hunt fish.
People do that recreationally, people tour to do that. Are these kinds of projects going to affect those uses? Those kinds of considerations that people want to investigate, know the answers to, are just going to all be part of the discussion.
Asa Kamer: Great. Well, listen, I will let you go, and hopefully you guys can pass this legislation, and once you’re doing the implementation phase, you can come back and tell us how it’s going.
John Crowther: Yes, sir. We’ll hopefully be back soon.
Asa Kamer: Awesome. All right. Well, this has been Alaska Department of Natural Resources Deputy Commissioner John Crowther, and you’ve been listening to Carbon Removal Newsroom, and we’ll talk to you guys next week. Bye-bye.
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