Jordan Blum, editorial director, Hart Energy: We are here at the massive Gastech conference in Houston. I'm joined by the founder of RBAC, Robert Brooks. Thank you so much for being here. Really appreciate it. So just to quickly introduce you, you're focused on market simulation systems for natural gas and LNG. I just really wanted to get your take on more of a macro level, kind of what you're most excited about in the industry and maybe on the other side of the coin most concerned about.

Robert Brooks: Well, thanks, Jordan. Yeah, we've been working for quite some time in this industry. What we try to do is we try to provide models and systems for companies to be able to simulate alternative futures and to see do their planning and investments and so forth, based on looking at this in, I think a very detailed and accurate kind of way. We spent a lot of time getting data and making sure that the data is correct and so forth. So what's interesting is, number one is the industry is always changing. Okay? So it's always interesting and we love that about it. It's like we've been around long enough to where we remember when the United States was going to need to import all this LNG and built all these LNG import terminals, and then all of a sudden it wasn't, and then we had to, basically everything got switched around.

So that's a very interesting thing. I guess the thing that is perhaps most intriguing is that we actually are developing, at this point, we have evolved the beginnings of a truly global gas network, which didn't really exist previously. It was islands in the past of gas networks, of which North America was one of those islands and a very important one. So very interesting. It's also interesting that we've gone through all of these cycles of we're out of natural gas resource, and then we find that actually technological developments mean that's not the case. In fact, the engineers, the geologists and all of these people very, very smart, and they just keep figuring out ways of extracting resources that they couldn't before. So I think all of that is very interesting. I think that, of course, we're always concerned about conflicts. So the Russia-Ukraine conflict is very sad in so many different ways, and as far as the natural gas industry it certainly has been a moment where you had to look at, well, could Europe really survive this?

And I think we have to give a lot of credit to the Europeans that they did in fact pull together and figure out how to do this: a little bit of demand conservation programs, but also redirecting some pipeline flows, getting some support from Norway, even from Algeria, more gas. And then of course from the U.S., lots of LNG. But they got through many of these LNG import terminals got built in record time. So they've done a lot of good in order to keep Europe going, if you will, friend. So certainly that is a testament to the ability to survive even something that is really a very catastrophic thing or could have been very catastrophic and is a very catastrophic thing for Ukraine and for Russia both. So in terms of, I think the opposite side, things that are concerning, I think in my estimation, one of the things that is very concerning is that environmental goals and pressures to meet these environmental goals have taken the front seat and affordable energy access in places like Africa and various other places seems to have taken the backseat again. And so these people, these huge volume number of people who don't have enough energy and could, I mean theoretically there's enough natural gas and other [energy sources] to provide these people with a better standard of living. And especially I would say if the various investment organizations would invest in developing the resources, the fossil fuel resources that are available in Africa for the benefit of the African people themselves.

And even today, I was looking, I went to one of the sessions that had to do with methane emissions, and it's like the Environmental Defense Fund and various other funds, World Bank and so forth, they were all there and it's like they, they're pushing really hard on getting rid of methane emissions, flaring and various other kinds of things. And I asked one of the speakers at the end, well, how much of this could be actually handled by better engineering and operating and maintenance procedures and so forth? He said, 75 or 80%. So the technology is there, but during that entire time, there was not one mention of Africa. There was not one mention of affordable energy access. So this is where I think some of the objectives have gotten skewed, and in my estimation, it should be the other way.

JB: Yep. Yeah. I mean, on one side of the coin in this country, you seem to have both political parties supporting fracking maybe now, but on the other side of the coin, like you said, there's a lot of talk here, gas, hydrogen, direct air capture, carbon capture projects. Obviously a lot of that's good, but I mean, do you think we need more just direct focus on financing natural gas, LNG projects, easing, permitting, et cetera?

RB: Well, I think the industry in the United States and Canada is a well established industry. And I think this is the other thing that when I heard the leaders of these major companies in the United States speak, I think they've got their heads screwed on right. I think they understand what needs to be done and what the right sequences are and so forth. And to be honest with you, much less so when I was hearing government speakers. So the government speakers, they seem to be more out of touch, sort of more aligned with these, again, the environmental goals without looking at the practicalities that are involved. And as well as, again, nobody, I mean, there's a little bit of lip service on affordable energy access for places, but where you hear it most, interestingly enough is from the super majors, the CEOs of these companies, they are talking about this.

But I think, like I was saying, the governments largely are sort of, they bought into the environmental goals, I think a little bit to the detriment of these other important global goals. So to answer your question a little bit more, I think everybody is talking a little bit about hydrogen, and of course the United States government is making money available. And so lots of companies are saying, 'OK, well, if you're going to give us money, we'll take it and we'll do these projects.' And I think that the scientists and engineers who are working on these projects, I think they're going to do a great job, and I think they're going to discover a lot of interesting things. I think they're going to work hard to try to develop good methods and good techniques and maybe some new things that we don't know right now. I mean, it's likely that that will happen.

There's a lot of smart people out there. There's smart people at MIT and Rice and UT, and all these schools. I mean, they're going to figure out some better ways of doing things. But I think in the end, they also run up against basic laws of thermodynamics and so forth that make it very tough, honestly, to make hydrogen really cost effective when you compare like green hydrogen when you compare against other methods that are actually based on natural gas. So I think so much of this actually comes back to natural gas and the capabilities that are inherent in the methane molecule, really. It'll be an interesting thing to see how things play out. I think there's a potential upside benefits all around the world. There are, I mean, let's take another example. I know you didn't ask, but India, India is starting to do actually pretty well, and it wasn't that long ago when India was just in total destitute, if you will. I mean, such poverty and so forth.

But now, I mean, they've got programs for launching space probes to the moon and various other things. They've got plans for manned space flight, and I mean, they're an advanced technology country— that still has a lot of poverty—but they're moving in the right direction. They're moving their people up to where you would hope that other countries will be able to follow in a similar kind of a way. And interestingly enough, natural gas is an important energy source that they have recognized that they need to have more of in order to further develop their economy.

JB: I mean, obviously mentioning India, economic growth happening more quickly; China's obviously still growing, but it's maybe slowing a bit. I mean, how do you see the gas, LNG flows evolving all around the world going forward?

RB: Well, certainly over the duration of my career with RBAC and the modeling that we've been doing, I think we keep seeing a greater potential for LNG around the world. I mean, the nice thing about LNG is you can move it to different places. So it's kind of flexibility that doesn't exist for moving natural gas by pipeline. Moving natural gas by pipeline, no doubt it is cheaper to do it that way, but you have a fixed origin and destination and maybe some points in between. But with LNG, if some company, there's not enough demand, some country or whatever, you can look around to see, okay, well, where does this cargo, where should it go?

So that flexibility, even though it comes at a price, it's in a couple of ways. I mean, you have to make it, and then you have to unmake it, right? You have to make it from gas, and then you have to make it back into gas. And so that costs you, as far as energy is concerned, it costs also as far as carbon dioxide emissions. So there's costs associated with it. But that additional flexibility is something that has made this global market, and I think it's going to become even more important over time. So very bullish on LNG, not just because United States is producing a lot of it, but we know Qatar is going to be producing more and more of it. We have Canada, Mexico is going to be exporting, of course, it's U.S. gas, but  still Mexico will be exporting. And so lots of good things happening in that area.

JB: Great. Yeah, almost looking like a North America Qatar duopoly.

RB: It is a little bit like that. And again, it's one of these things where Russia has kind of shot themselves on the foot in, that's almost too silly a statement in a way because it's such a horrible thing that's going on. But Russia was in such a good position energy wise, for both LNG and for pipeline gas in Europe and so forth. But now it's really, really hard, and I think Europe is making moves towards reducing or limiting Russian LNG into Europe and using it to transport, ship it from Europe. The pipeline flows across. Ukraine may end in Dec. 31st at midnight of this year. So there's all of that that is going on. And the trouble is that those that Arctic LNG can only move to China and Japan and so forth only four months out of the year, because the rest of the time it's icy along the Arctic and they can't get it through. So yeah, very, very interesting geopolitical switch that has happened. If you're just thinking of it from an intellectual point of view, it's very, very interesting from a human point of view, it's very tragic, obviously.

JB: Well, important to watch regardless. But thank you so much again for joining us here at Gastech. Really appreciate it. To read and watch more, please visit online at hartenergy.com.

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