What's happening with hydrogen?

Josh Averitt: Welcome to Coming Down the Pipe, ARS Global's monthly podcast where we talk about pipelines, pipeline construction, assets, investments, and the market in general. I'm Josh Averitt, president of ARS Global, and today we have Mike Istre with INGAA Foundation. Mike, why don't you go ahead and introduce yourself and kind of give us a history of where you've been, how you got started, where you're at today. Mike Istre: Great. Thanks, Josh. It’s a pleasure to be here. I'm the Director of Projects and Research for the INGAA Foundation. I also provide technical support for the INGAA Foundation. The two organizations, they’re sister organizations, just to give a little clarity. So INGAA is the Interstate Natural Gas Association of America. That is the trade association or lobby group for the pipeline operators for the interstate natural gas system. So those are your big pipeline operators, the Kinder Morgans, the Willams, you know those folks. They have their 26 members. I primarily work for the INGAA Foundation. The INGAA Foundation is also a trade association. We do not do the lobbying or advocacy efforts, but we also include the service providers for the natural gas and now complementary clean energy systems in our mission. So that brings in folks like you, all of the contractors, the engineering consultants, etc., as well as those pipeline operators. So we have 176 members in our association, just to give a little broader representation and our mission is really to convene and get all of those groups talking together. We like to say when you're in the room, take your company hat off, we're here for the industry. And we want to do that. Really look at projects and studies to improve the industry. Myself, you know, I started in this business by accident. You know, my original degree is in manufacturing, computer aided design and manufacturing and did not enjoy that first job and answered an ad for an offshore pipeline engineer in New Orleans. And the only reason the guy hired me, I believe, is because we went to the same college. So the only thing you know about offshore pipelines is you tied your fishing boat up to one. And that was 1996. And it's been a ride from there. So, I was Chief Engineer at the end of that career, after 20 plus years. And then I came over to the INGAA Foundation just to get a little different perspective than when you're in Washington, D.C. Josh Averitt: Man. Well, that's great. Great story. Thanks for joining us today. One of the main things that we want to talk about today is hydrogen and where we see that going. It seems to be a fairly new topic for me personally and for the industry on one of the previous podcasts that you did on the Pipeliners Podcast, you had mentioned, you know, this has always been something that we want to keep out of pipelines and now we're trying to find a way to put it back in the pipelines. So can you give our listeners and viewers kind of just a 100,000 foot view of why the shifting perspective on something that we wanted to keep out, but now, you know, we're trying to make this an energy source. Mike Istre: Right, so, you know, there's been this push and we go back to conversations on climate change, on environmental impacts and carbon intensity, and getting greenhouse gases out of our atmosphere or reducing them. And hydrogen is one of those items that is seen as a means to do that. It can be a thermal fuel, like burning methane, natural gas and producing heat like we do to generate power. And so, but it has no carbon emission whenever you do that. The only product that comes out of your stack is water, you know, and so it's felt to be a clean burning fuel. And so the big push has been how can we decarbonize and get the carbon out of those traditionally fossil fuel industries. And this element is seen to be the reason or the push of how to do it. It's the most abundant element in the atmosphere and in the universe. So it's it seems to be an easy answer, is how we got into the conversation. Josh Averitt: Got it. And when we talk about hydrogen, there's a few different subsets. Within hydrogen, you have red hydrogen and others. Can you give us a layman's term differential between the types of hydrogen that seem to be more prevalent and I guess desirable for different industries and applications? Mike Istre: Right. So you have this whole rainbow of colors of hydrogen. And from the policy perspective, everyone talks about green hydrogen and all the colors really do is identify how the hydrogen was created. So, you know, you're going to break apart something. So right now it's water. And how do you break apart water? If you use renewable energy, which has no emission, that's green hydrogen. You know, to get your H2O. Mostly what we have today as far as the United States is either called blue or gray hydrogen. And that's using methane, which is, you know, CH4 compounds. So you have those four atoms of hydrogen that you can break apart. And how you break that apart is then the color that you get for that hydrogen. Josh Averitt: Got it. What do you feel like is coming down the pipe in terms of fuel diversification with hydrogen and other renewable sources? Mike Istre: So, you know, I've told this story a couple of times in other presentations. And, you know, the U.S. energy mix is pretty much governed or regulated by the Federal Energy Regulatory Commission or FERC or as as people call them. And I like to say FERC is a family, you know, and they have the mom and the dad and the little kid that they're raising, and that little kid is energy. That's all of the energy that the United States needs to use. And so they're trying to really keep her entertained and keep it going and give her the tools and resources that they want. And so I would say this family has pets and the dad is a dog guy. And so dad has an old dog called coal. He's reliable, he's there, but he's off in the corner. You know, he's done his job, he's past his prime, but he's still around. And then they have the the playful, you know, in the prime Labrador retriever, you know, or are the golden retriever. And he's playing and energy loves playing with that dog. It's high energy and he comes when he's called, but you know what's happened is, you know, he's kind of wandering around the neighborhood now a little bit. You know, his name's Natural Gas. And, you know, he's going around and he's playing with some other neighbors now. So energy is kind of looking at, you know, what's happening here. And but my mom's a cat person. Mom has two cats and that's solar and wind. Okay? And energy loves the cats. It loves playing with cats. But the problem is that whenever the energy wants to play with the cats, they're not there. So say that, you know, when the wind's not blowing or the sun is not shining, but that's when she wants to play with the cats is whenever they're not there. So it's this whole little, you know, family of diverse energy topics. And now this family has an Uncle Sam. And Uncle Sam called one day and said, I got you a new pet and it's puppy and his name's Hydrogen. And you get to play with hydrogen now. And where we’re at is okay, what is this little puppy? You know, is it going to be, you know, some little terrier that's just going to bark bark bark and not do anything? Is it going to be a great dane that's just going to end up taking over the entire thing? So that's where we are right now in our hydrogen conversation is trying to figure out how do we get this new dog into the family? Because if you’ve ever had a pet and tried to introduce a new pet into an existing household, you know, it's, there's three things that can happen. They can ignore each other. That’s fine. They can get along great, you know, love each other and play and all that, or they're just going to fight and fight and fight. And we really don't want that last scenario. So, you know, as far as the natural gas industry, we're trying to figure out how can we best play with this new product and and really keep energy and the energy needs of the United States really going forward and growing and support everything that needs to happen. Josh Averitt: Got you. Well, as we introduce the new pet into the family, there's obviously two main components of getting a product to market, and that's how do we transport it and how do we store it. Obvious answer would be pipelines and storage facilities. How are those changing in the United States right now with the with the properties of hydrogen and the technical specification it takes to build out that infrastructure? Mike Istre: Right. So part of the the study that the foundation did was to look at some of those issues because that's exactly what we needed to figure out from a transmission side. There's been plenty of study on the distribution side, low pressure side of getting the product into people's homes or in industries, etc. But what we wanted to know is what are the impacts on the high pressure side and storage side? What do we need to know? Because exactly as you said, that's a key component of of a new energy. You have to be able to store it and you have to be able to move it. And so what we've found and originally what we've, what was thought is that blending hydrogen into the natural gas system could be a means to transition us from a pure natural gas system into a pure hydrogen system. That's the thought process that DOE was promoting, that we're looking forward, that we're going to phase out fossil fuels and this could be a methodology to do that. So that's part of what our study was looking at was really what is the impact of, as you said before, well, this is a product we've tried to keep out since the beginning of the natural gas pipeline industry, and now we're asking folks to put it back in. And what are those consequences as we go forward? Josh Averitt: Sure. What, right now, as far as existing infrastructure goes, how is hydrogen stored? And do you see that as sustainable or do you see there having to be changes in the future as to how the product is stored? Mike Istre: So right now, the existing, it’s underground storage, similar to what we would use for natural gas or oil. And there is a lot of underground storage. There’s not a lot of guidance on the current geology yet as to how to store hydrogen. You know, we think old aquifers are not ideal. We’re looking at salt caverns primarily because they’re the lIstre permeable, and hydrogen is the smallest molecule your can have so we need something that’s not very permeable for good storage. So it’s identifying just what are the best geological conditions for undergroud storage. But it’s nothing new, you know it’s been around for a long time and we’re just scaling is kind of the best thing I can describe at the moment. We’re going from minor industrial uses to now, is it going to be the primary fuel for power generation in the United States? Josh Averitt: Got it. Yeah. So, you know, one of the things that I'd like to hint on, and this is of a shameless plug, we have a related company called Midstream Holdings that's essentially like the Zillow.com or if you're a Houstonian, the HAR.com for active pipelines and facilities. And listening to some of your previous presentations, I was really intrigued as far as the convertibility of service for existing infrastructure. One thing I wanted to hear from you is based on your study that you guys did in some of the previous presentations that you have. What are some outcomes that you guys are seeing as far as the integrity studies and things like that on existing pipelines that will either allow or not allow an operator to convert that into hydrogen service? Mike Istre: So the most critical integrity issue when dealing with hydrogen is cracking, you know, hydrogen induced cracking. And so the key item that's going to have to be done for any asset that you're looking to convert is going to be running some type of in-line inspection tool. And really qualify what is the cracking condition of the pipe. Something that is a latent defect maybe from manufacturing or even construction, which is perfectly acceptable for natural gas service, that the pressures that they've been running may no longer be acceptable with even small percentage concentrations of a blended hydrogen mix in that just because that's what it is prone to do with steel. That's why we've been trying to keep it out of the pipe. One question that I have is when you run the ILI tools and you talk about hydrogen induced cracking and things like that, does that typically happen in harder steel, like an X70 pipe versus an X52 pipe? Is there any sort of more suitability for conversion into hydrogen across the API grades of steel pipe? Mike Istre: So the the higher grades are more susceptible to hydrogen induced cracking sometimes just because of the wall thickness. You know, there's, when when you're designing it and you've gone to a higher grade, the reason is you're looking to save steel. So you're saving tonnage with lower wall, you know, thinner walls as opposed to those those lower grades. So you have more steel in the lower grades in order to absorb the fraction mechanics and all of the other technical issues associated with a cracking that you won't have in those higher grades of steel. So it's not necessarily just the grade, it could just be the geometry of the pipe that is more susceptible, which tends to be those lower grades of steel. Josh Averitt: Got it. Well, as we talk about developing new infrastructure, utilizing existing infrastructure and the combination of all that being a new pet, what do you see as some realistic expectations in 2024 and going forward with the introduction of hydrogen? Mike Istre: You know, right now we're you know, it was a the new shiny toy, you know, a couple of years ago. And everybody, there was a lot of research that was started, and there’s a lot of research that has been wrapping up. Key right now is the Department of Energy and the government, because realistically, there is not a market. And so if you're looking at private companies to invest and take financial risk in doing a big hydrogen project like the hydrogen hubs that were announced, there needs to be some type of delivery. You know, would you have to sell it? There has to be some commercial side of this and that I see as the biggest push in the next not just 24, probably 25, as well as the hubs start getting their contracts with the government in place and start their work and determining, okay, we're going to produce all of this hydrogen, where do we burn it? And if you don't have a market to bring it to, then why are you doing it? So that's kind of what I see the next phase of real focus is going to be getting that market in place. Josh Averitt: Got it. And, you know, based on kind of what I'm hearing is that we have a fair, fairly good amount of certainty, but still a lot of uncertainty in this hydrogen market. And out of that, I guess, what are the what are the projects slated for, you know, 2024 and beyond? Or is it more research based? Is it building out physical assets? Are there any major projects out there that are that are underway? Mike Istre: You know, we we gave a presentation to FERC to try to educate them on hydrogen as well. And they asked almost a similar question of when are we going to see the first, you know, permanent application for a hydrogen pipeline? And we don't know yet from an infrastructure standpoint, especially or even a blending, you will likely see a 100% hydrogen pipeline application before you see a blending application, you know, some change of service to have blending because of the the background and all of the qualification from an integrity standpoint that you're going to have to do on that asset. Plus figure out if it's the correct asset. Are you bringing the product to the right spot? Yeah, that's going to be a key issue there. The hubs have that advantage. Is that okay, we know where where we need to bring it to. Josh Averitt: Mike, One thing I think that our listeners and viewers might be interested in is hearing about some of the regulations in design code changes or implementations that might be on the horizon. Can you kind of give them an insight into what that looks like? Mike Istre: Sure. So, you know, from a pipeline standpoint, an operator standpoint, you have a variety of regulators that we deal with from an economic standpoint of FERC to safety from PHMSA and then your design codes from ASME. The issue that we're running into now with people running, getting into the hydrogen space is that there isn't anything explicit in any of those areas for a pipeline. So we have FIMSA saying that while it'll be covered under part 192, but we know that there may be some issues there that from a safety standpoint, there may need to be some tweaks that will happen. PHMSA has not yet indicated that they've begun working on any modifications for Part 192 to deal with, say, a 100% hydrogen pipeline. So that's upcoming. It's on kind of their thought process, but there isn't anything that's come out publicly to say that we're going to do a modification. From a design standpoint, the current document would be ASME B31 12, that is hydrogen pipeline design and the ASME has now initiated a task group to revise that document, to be, to look at long distance pipeline. So transmission style pipelines, because it's really written for piping, you know, in-service and in-facility piping. And so they're taking a look right now. Hopefully we'll get a revision out in the near future that has a better understanding of long distance transmission pipelines and what we need to do for design there. Josh Averitt: And when you say in the near future, is that 2024? Mike Istre: Yeah, they have an aggressive schedule. So we're looking at 2024. The last I understood that they're looking at having either an addendum or a revision to that document. Josh Averitt: Great. Well, Mike, thank you for joining us today. And it's been very informative for not only me, but our viewers and listeners as well. Be sure to like, subscribe. You can subscribe on any major platforms that you get your podcasts on. We'll see you next month on our episode of Coming Down the Pipe. And Mike, thanks again, man. I really appreciate you joining us. Mike Istre: Thanks for the invitation. It was a pleasure to be here.