Jordan Blum, editorial director, Hart Energy: We are here at Hart Energy's America's Natural Gas Conference in Houston and I'm joined by Robert Birdsey, the managing director for GreenFront Energy Partners. Thank you for joining us for this Hart Energy LIVE Exclusive Interview. Y'all obviously invest, do business a lot with the renewable energy space, but you're also involved a good bit with gas. Can I get you to talk about the potential of both renewable natural gas, responsibly sourced gas and how you see things going forward?

Robert Birdsey, managing director, GreenFront Energy Partners: Yeah, sure. So GreenFront Energy Partners, we're actually not investors. We are investment banking advisors. So someday we'll have money to invest, but not right now. And we focus exclusively on energy transition. And so some people will hear that and they're like, well why are you at a natural gas conference, which is traditional oil and gas? Well, we actually think that there's a pretty good connection that should be talked about. First of all, natural gas by itself is a very clean burning gas and has displaced a lot of coal, which for people who care about carbon intensity and decarbonization, that's a really good thing. But for us particularly, we focus on traditional renewables such as solar, wind and battery storage. But I personally spend most of my time in renewable fuels. For me, that means renewable natural gas, carbon captured and sequestration (CCS) and also clean hydrogen. So we spend a lot of time with RNG or renewable natural gas producers, both landfill RNG producers, dairy RNG producers and swine RNG producers. And from a volumetric point of view, within the overall natural gas system in the U.S., it's actually pretty small, but from a dollars and cents and just an overall dynamic feel within the industry, it's got a lot of tailwinds.

JB: Yeah. So like you said, RNG is relatively niche right now, but growing pretty quickly. How do you see things evolving from a cost efficiency standpoint increasingly growing, becoming more competitive?

RB: Yeah, the technologies are not new, but the industry trying to develop projects at scale is relatively new. And so there's a lot of technology that goes into taking cow manure or landfill waste gas, digesting it, upgrading it and getting it up to pipeline spec and quality. And it's been kind of a learning curve for the industry. Five years ago, you saw a lot more projects that were coming in a little bit delayed, a little bit over budget, not producing as much as they thought. We're still dealing with some of those issues today, but they are getting better. So you're seeing the technology curve and people starting to go up that curve and getting more efficient.

JB: How pivotal is the relatively new IRA law and just what you see benefiting the most from it?

RB: It's a massive game changer. So just to give you an example, in renewable natural gas, there's an investment tax credit that can now be monetized, which means that up to 30%, maybe even 40% or 50% of your project can generate a tax credit that can be used in tax equity financing or the credit can actually be sold. That just made the capex burden a significantly smaller amount. And then also there's a production tax credit. So for the years 2025, 2026 and 2027, there are PTCs that can be earned for every MMBtu of low carbon intensity gas that's produced. So a lot of these projects were already papering before the IRA was even passed and now there's a lot more juice to them.

JB: Very good. You mentioned carbon capture and storage, carbon capture and sequestration. What's your take on the path forward there? Obviously there's a lot of IRA funding supporting that. There's a lot of mixed views on whether that's a good or bad thing for the industry, for the environment.

RB: I think it's a great thing, and a lot of the most sophisticated energy companies in the world would agree. Exxon has announced a deal where they are signing up commitments from emitters like CF Industries, Nucor, Linde, NextEra and they're going to be sequestering the emissions from some of those facilities in Louisiana. And it's interesting to see Exxon take the lead because they're signing up those sorts of deals, but at the same time it's really hard. Every single capture facility where the emissions are being generated requires its own engineering to do so in an efficient way. It sometimes still doesn't make economic sense if the CO2 stream is low purity and then you have to transport that CO2. And we all know that transporting molecules and building pipelines is not the easiest thing to do in this country. And by the way, there needs to be the right type of geology for sequestration nearby and you need the landowners who own the land on top of that geology to be wanting to play ball. So there's a lot of variables that need to be managed that needs to come together, but when you can get those things in alignment, it all does make a lot of sense.

JB: Very good. Can I pivot to get you to talk a little bit about hydrogen and the future there and blue, green, brown and all the other colors of the rainbow and what you see is your favorite? What's growing with the most potential?

RB: So GreenFront just closed on its second transaction for clean hydrogen earlier this month. I'm happy to say. That was for pure play green electrolytic hydrogen producer. We did a turquoise hydrogen deal earlier in the year. So it's a space that we know well. It's still early stages. A lot of different technologies can work and will work, but they have to be in the right circumstances. The biggest hurdles I would say are end user adoption from the folks who are going to be buying the hydrogen and seeing whether or not they're willing to sign long-term fixed price contracts that make the clean hydrogen production projects bankable. And it's kind of amazing to see how much energy is being put into this by the DOE. I mean, there's a whole team of folks within the DOE who are working with those users of hydrogen to help them de-risk and get over that hump to go ahead and sign those long-term hydrogen purchase agreements. So I think clean hydrogen is here to stay, but it's still in the early stages.

JB: Great. It'd be fascinating to see how it plays out.

RB: Yeah, no kidding.

JB: Thank you so much for joining us today at the America's Natural Gas Conference. For more information, please read and watch online at hartenergy.com.

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