A proposed Environmental Protection Agency rule intended to encourage industry to adopt best practices that reduce emissions of methane and thereby avoid paying. Photo via Canva

Oil and natural gas companies for the first time would have to pay a fee for methane emissions that exceed certain levels under a rule proposed Friday by the Biden administration.

The proposed Environmental Protection Agency rule follows through on a directive from Congress included in the 2022 climate law. The new fee is intended to encourage industry to adopt best practices that reduce emissions of methane and thereby avoid paying.

Methane is a climate “super pollutant” that is more potent in the short term than carbon dioxide and is responsible for about one-third of greenhouse gas emissions. The oil and natural gas sector is the largest industrial source of methane emissions in the United States, and advocates say reduction of methane emissions is an important way to slow climate change.

Excess methane produced this year would result in a fee of $900 per ton, with fees rising to $1,500 per ton by 2026.

EPA Administrator Michael Regan said the proposed fee would work in tandem with a final rule on methane emissions EPA announced last month. The fee, formally known as the Methane Emissions Reduction Program, will encourage early deployment of available technologies to reduce methane emissions and other harmful air pollutants before the new standards take effect, he said.

The rule announced in December includes a two-year phase-in period for companies to eliminate routine flaring of natural gas from new oil wells.

“EPA is delivering on a comprehensive strategy to reduce wasteful methane emissions that endanger communities and fuel the climate crisis,” Regan said in a statement. When finalized later this year, the proposed methane fee will set technology standards that will “incentivize industry innovation'' and spur action to reduce pollution, he said.

Leading oil and gas companies already meet or exceed performance levels set by Congress under the climate law, meaning they will not have to pay the proposed fee, Regan and other officials said.

Sen. Tom Carper, chairman of the Senate Environment and Public Works Committee, said he was pleased the administration was moving forward with the methane fee as directed by Congress.

“We know methane is over 80 times more potent than carbon dioxide at trapping heat in our atmosphere in the short term,'' said Carper, D-Del. He said the program "will incentivize producers to cut wasteful and excessive methane emissions during oil and gas production.”

New Jersey Rep. Frank Pallone, the top Democrat on the House Energy and Commerce Committee, said oil and gas companies have long calculated that it's cheaper to waste methane through flaring and other techniques than to make necessary upgrades to prevent leaks.

“Wasted methane never makes its way to consumers, but they are nevertheless stuck with the bill,” Pallone said. The proposed methane fee “will ensure consumers no longer pay for wasted energy or the harm its emissions can cause.''

Republicans call the methane fee a tax that could raise the price of natural gas. “This proposal means increased costs for employers and higher energy bills for millions of Americans,” said Sen. Shelley Moore Capito, R-West Virginia.

The American Petroleum Institute, the oil and gas industry's largest lobbying group, slammed the proposal Friday and called for Congress to repeal it.

“As the world looks to U.S. energy producers to provide stability in an increasingly unstable world, this punitive tax increase is a serious misstep that undermines America’s energy advantage,'' said Dustin Meyer, API's senior vice president of policy, economics and regulatory affairs.

While the group supports “smart” federal methane regulation, the EPA proposal “creates an incoherent, confusing regulatory regime that will only stifle innovation and undermine our ability to meet rising energy demand,'' Meyer said. “We look forward to working with Congress to repeal the IRA’s misguided new tax on American energy.”

Fred Krupp, president of the Environmental Defense Fund, called the proposed fee "common sense,'' adding that oil and gas companies should be held accountable for methane pollution, a primary source of global warming.

In a related development, EPA said it is working with industry and others to improve how methane emissions are reported, citing numerous studies showing that and oil and gas companies have significantly underreported their methane emissions to the EPA under the agency's Greenhouse Gas Reporting Program.

The climate law, formally known as the Inflation Reduction Act, established a waste-emissions charge for methane from oil and gas facilities that report emissions of more than 25,000 metric tons of carbon dioxide equivalent per year to the EPA. The proposal announced Friday sets out details of how the fee will be implemented, including how exemptions will be applied.

The agency said it expects that over time, fewer oil and gas sites will be charged as they reduce their emissions in compliance with the rule.

This new Texas wind farm is now partly powering Target Corp. Photo via swiftcurrentenergy.com

Central Texas wind energy facility goes online to power Target Corp.

up and running

A Texas wind energy project has officially delivered and is actively providing power to its customer, Target Corp.

Boston-based Swift Current Energy, which has an office in Houston, announced this week that its 197 MW Castle Gap Wind project is operational. It has the capacity to create enough pollution-free energy to power more than 50,000 homes annually.

"Castle Gap Wind is a momentous project for Swift Current Energy as we grow our projects under asset management and operations," Eric Lammers, CEO and co-founder of Swift Current Energy, says in a news release. "Castle Gap Wind is one of the earliest projects supported by the Inflation Reduction Act, and we are thankful for our partners at Target, Goldman Sachs, MUFG, CaixaBank and of course the entire Swift Current Energy team who helped make the Project possible."

Goldman Sachs provided the tax equity for the project, and Target and Swift Current have established long-term virtual power purchase agreement. Additionally, Mitsubishi UFJ Financial Group, or MUFG, and CaixaBank provided project financing.

"Goldman Sachs is pleased to partner with Swift Current Energy on their Castle Gap Wind project," Ryan Newman, head of Tax Equity at Goldman Sachs, says in the release. "Goldman Sachs is committed to financing the energy transition and supporting sponsors like Swift Current that are developing sustainable infrastructure in an effort to combat climate change."

The project is located in the Mills and Lampasas Counties, which are around 90 miles northwest of Austin.

"This Castle Gap Wind contract is a part of our commitment to renewable energy and is one example of how we are leveraging our size and scale to benefit people, the planet and drive our business forward," Erin Tyler, Target's vice president of property management, says in the release.

Amazon has agreed to buy 250,000 metric tons of carbon removal credits from 1PointFive’s first DAC plant. Photo via 1pointfive.com

Oxy's cleantech arm scores Amazon DAC investment

carbon capture client

Houston-based cleantech company 1PointFive is among the recipients of e-commerce giant Amazon’s first investments in carbon-fighting direct air capture (DAC).

Amazon has agreed to buy 250,000 metric tons of carbon removal credits from Stratos, 1PointFive’s first DAC plant, over a 10-year span. That commitment is equivalent to the amount of carbon stored naturally across more than 290,000 acres of U.S. forecasts, says Amazon.

Financial terms of the deal weren’t disclosed.

1PointFive is a carbon capture, utilization, and sequestration (CCUS) subsidiary of Houston-based energy company Occidental Petroleum.

The carbon captured for Amazon will be stored deep underground in saline aquifers — large geological rock formations that are saturated in saltwater.

As Amazon explains, DAC technology filters CO2 from the atmosphere and stores it in underground geological formations. Aside from being stored, removed carbon can be used to make building materials like bricks, cement, and concrete.

1PointFive is constructing its first DAC plant in Ector County, which is anchored by Odessa. The facility is expected to be the world’s largest DAC plant, capturing up to 500,000 tons of CO2 per year. Amazon Web Services (AWS) will provide real-time performance data for the plant.

“Amazon’s purchase and long-term contract represent a significant commitment to direct air capture as a vital carbon removal solution,” Michael Avery, president and general manager of 1PointFive, says in a news release. “We are excited to collaborate with Amazon to help them achieve their sustainability goals.”

1PointFive broke ground on the Stratos plant in April. Its project partners include British Columbia-based Carbon Engineering and Australia-based Worley. The plant is expected to be fully operational by mid-2025.

1PointFive envisions establishing more than 100 DAC facilities around the world by 2035.

The Amazon deal isn’t the only major deal for 1Point5 this summer.

In August, the U.S. Department of Energy (DOE) announced a $600 million grant for a 1PointFive-operated DAC hub that will be built in South Texas. The more than 100,000-acre hub, comprising 30 individual DAC projects, eventually may remove and store up to 30 million metric tons of CO2 per year.

Also in August, Japan’s All Nippon Airways (ANA) said it reached an agreement with 1PointFive to buy 10,000 metric tons of carbon removal credits per year over a three-year period starting in 2025. The credits will be generated by 1PointFive’s Stratos plant.

In the U.S., DAC has gotten a huge boost from the federal government. The Inflation Reduction Act, passed in 2022, includes tax credits for capturing and storing carbon via DAC.

The International Energy Agency says 27 DAC plants have been commissioned around the world, with at least 130 more in the development stage. One forecast predicts the value of the global market for DAC systems will climb past $2.3 billion by 2030.

Repsol announced that it's buying ConnectGen from Quantum Capital Group, a Houston-based private equity firm that focuses on energy investments. Photo via Getty Images

Repsol to acquire Houston-based renewable energy platform

M&A Move

Spanish energy giant Repsol is breaking into the U.S. market for onshore wind power with its $768 million deal to purchase Houston-based renewable energy startup ConnectGen.

Repsol is buying ConnectGen from Quantum Capital Group, a Houston-based private equity firm that focuses on energy investments, according to a September 8 news release. Quantum’s renewable energy arm, 547 Energy, owns ConnectGen.

ConnectGen, founded in 2018, operates 278 megawatts of solar energy projects in Arizona, California, and Nevada. Its nationwide development pipeline features more than 20,000 megawatts of wind power, solar power, and energy storage projects.

“All of us at Quantum and 547 Energy are looking forward to watching Repsol convert these development projects into operating assets that will help power the American economy with clean renewable electricity over the next decade,” says Wil VanLoh, founder, chairman, and CEO of Quantum.

Quantum and its affiliates have managed more than $22 billion in equity investments since the firm was founded in 1998.

Once the deal tentatively closes by the end of 2023, current ConnectGen employees, including senior executives, are expected to join Repsol’s renewable energy team. Caton Fenz has been CEO of ConnectGen since 2019. He previously was the startup’s chief development officer.

“The addition of ConnectGen accelerates our commitment to renewable generation in one of the markets with the greatest potential for future growth. In that sense, bringing on board its valuable team of experts is key to [ensuring] our successful future growth with robust profitability in the market,” says Josu Jon Imaz, CEO of Repsol.

Repsol has targeted 20,000 megawatts of installed global capacity for renewable energy by 2030. The company owns 245 megawatts of renewable energy assets in the U.S. and 2,000 megawatts worldwide.

ConnectGen’s capabilities build on Repsol’s 2021 purchase of a 40 percent stake in Chicago-based Hecate Energy, which develops solar power generation and energy storage projects.

Repsol aims to operate 2,000 megawatts of installed renewable energy capacity in the U.S. by 2025 and more than 8,000 megawatts by 2030. Aside from the U.S., Repsol owns renewable energy assets in Chile, Italy, Portugal, and Spain.

In the U.S., Repsol, ConnectGen, and other companies are capitalizing on tax credits contained in the federal Inflation Reduction Act of 2022 that are designed to spark development of clean energy projects. The law earmarks nearly $400 billion in federal funding for clean energy initiatives.

A new study funded by the BlueGreen Alliance, a group backed by labor unions and environmental organizations, indicates the law could add more than 1.5 million jobs in the solar and wind power sectors by 2035. Tens of thousands of these jobs will undoubtedly be created in Texas.

The White House estimates the Inflation Reduction Act will spur $66.5 billion in Texas investments in large-scale clean power generation and storage projects between now and 2030.

“Strengthening our energy security advances two goals: It lowers costs for all Americans by ensuring a resilient and affordable supply of clean energy, and it fosters American innovation in difficult-to-decarbonize sectors,” Lily Batchelder, assistant secretary for tax policy at the U.S. Treasury Department, said in a recent update about the law.

Here are three things to know about how the Inflation Reduction Act is driving a clear tech industrial revolution. Photo via energy.gov

3 things to know about the IRA that impact Houston's energy sector

the view from heti

In August of 2022, President Joe Biden signed into law the Inflation Reduction Act which aims to mitigate inflation by reducing the federal government budget deficit and lowering prescription drug prices. Through federal funding and a combination of grants, loans, rebates, incentives and other investments, the IRA also will impact domestic energy production while bolstering efforts for an energy-abundant, low-carbon future.

At the bill’s one-year anniversary, Mitsubishi Heavy Industries America held a panel of leaders across multiple sectors — energy, finance, industry and academia — to discuss the IRA and what it means for the future of business and industries.

Here are three things to know about how the Inflation Reduction Act is driving a clear tech industrial revolution, according to Mitsubishi Heavy Industries:

1. IRA Encourages Private-Sector Investment

Since being passed into law by President Biden in August of 2022, the IRA’s first year yielded:

  • Companies have announced 96 gigawatts of new clean power over the previous eight months, enough to power almost 20 million homes – about one-seventh the total number of homes in the U.S.
  • Companies have announced enough new U.S. battery manufacturing projects to support production of more than 10 million EVs per year – more vehicles than were manufactured in the U.S. in 2021.
  • The IRA’s expected impact on private investment has increased between 50 percent and 200 percent from initial estimates, based on research from the Brookings Institution and Rhodium Group, with the largest jumps related to hydrogen, carbon capture, energy storage and critical minerals.

2. A strong focus on environmental justice

According to a fact sheet issued by the White House, the IRA will: reduce pollution; improve clean transit; make clean energy more affordable and accessible; and strengthen resilience to climate change. With a simple mission to accelerate the energy transition with incentives rather than penalties, the act will allocate nearly $400 billion to efforts to reach a low-carbon, energy abundant future including:

  • More than 40 percent of the $27 billion Greenhouse Gas Reduction Fund ($10.8 billion) will benefit low-income and disadvantaged communities.
  • $3 billion for states, tribes, municipalities and community-based nonprofit organizations for environmental justice and climate justice block grants. Eligible activities include mitigating climate risks from heat islands and wood heater emissions, and reducing indoor air pollution; climate resiliency; and facilitating engagement of disadvantaged communities.
  • $3 billion to reduce air pollution and emissions at ports via the installation of zero-emissions equipment and technology.
  • $37.5 million in grants to monitor and reduce air pollution and greenhouse gas emissions at schools in low-income and disadvantaged communities along with another $12.5 million to provide technical assistance to help schools address environmental issues.
  • $33 million to the Council on Environmental Quality to collect data and track disproportionate impacts of pollution and climate change on environmental justice communities in addition to $3 million in grants to deploy, integrate and operate air quality sensors in low-income and disadvantaged communities

3. Collaboration reimagined

As the race to net zero continues, tech giants and energy leaders across all sectors ––corporations, governments, nonprofits and academia –– have come together for one common goal: develop solutions to tackle the world’s toughest energy issues. When it comes to progressing the IRA, industry and Mitsubishi President and CEO Takajiro Ishikawa weighed in on collaboration for the act noting that “The energy transition can’t be done by just one party. Collaboration and communication between all parties is key.”

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This article originally ran on the Greater Houston Partnership's Houston Energy Transition Initiative blog. HETI exists to support Houston's future as an energy leader. For more information about the Houston Energy Transition Initiative, EnergyCapitalHTX's presenting sponsor, visit htxenergytransition.org.

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Houston startup taps new corporate partner for AI-backed sustainability consumer tech

out of the boxes

With the help of a new conversational artificial intelligence platform, a Houston startup is ready to let brands get up close and personal with consumers while minimizing waste.

IBM and Boxes recently partnered to integrate the IBM watsonx Assistant into Boxes devices, providing a way for consumer packaged brands to find out more than ever about what its customers like and want.

The Boxes device, about the size of a 40-inch television screen, dispenses products to consumers in a modern and sustainable spin on the old-fashioned large vending machine.

CEO Fernando Machin Gojdycz learned that business from his entrepreneur father, Carlos Daniel Machin, while growing up in Uruguay.

“That’s where my passion comes from — him,” Gojdycz says of his father. In 2016, Gojdycz founded Boxes in Uruguay with some engineer friends

Funded by a $2,000 grant from the University of Uruguay, the company's mission was “to democratize and economize affordable and sustainable shopping,” in part by eliminating wasteful single-use plastic packaging.

“I worked for one year from my bedroom,” he tells InnovationMap.

Fernando Machin Gojdycz founded Boxes in Uruguay before relocating the company to Greentown Houston. Photo courtesy of Boxes

The device, attached to a wall, offers free samples, or purchased products, in areas of high foot traffic, with a touch-screen interface. Powered by watsonx Assistant, the device asks survey questions of the customer, who can answer or not, on their mobile devices, via a QR code.

In return for completing a survey, customers can get a digital coupon, potentially generating future sales. The software and AI tech tracks sales and consumer preferences, giving valuable real-time market insight.

“This is very powerful,” he says.

Boxes partnered in Uruguay with major consumer brands like Kimberly-Clark, SC Johnson and Unilever, and during COVID, pivoted and offered PPE products. Then, with plans of an expansion into the United States, Boxes in 2021 landed its first U.S. backer, with $120,000 in funding from startup accelerator Techstars.

This led to a partnership with the Minnesota Twins, where Boxes devices at Target Field dispensed brand merchandise like keychains and bottles of field dirt.

Gojdycz says while a company in the Northeast is developing a product similar in size, Boxes is not “targeting traditional spaces.” Its software and integration with AI allows Boxes to seamlessly change the device screen and interface, remotely, as well.

Boxes aims to provide the devices in smaller spaces, like restrooms, where they have a device at the company's headquarters at climate tech incubator Greentown Labs. Boxes also recently added a device at Hewlett Packard Enterprise headquarters in Spring, as part of HPE’s diversity startup program.

Boxes hopes to launch another sustainable innovation later this year, in universities and supermarkets. The company is also developing a device that would offer refillable detergent and personal cleaning products like shampoo and conditioner with a reusable container.

Since plastic packaging accounts for 40 percent of retail price, consumers would pay far less, making a huge difference, particularly for lower-income families, he says.

“We are working to make things happen, because we have tried to pitch this idea,” he says.

Some supermarket retailers worry they may lose money or market share, and that shoppers may forget to bring the refill bottles with them to the store, for example.

“It’s about..the U.S. customer,” he says, “….but we think that sooner or later, it will come.”

Boxes has gotten funding from the accelerator startup branch of Houston-based software company Softeq, as well as Mission Driven Finance, Google for Startups Latino Founders Fund, and Right Side Capital, among others.

“Our primary challenges are scaling effectively with a small, yet compact team and maintaining control over our financial runway,” Gojdycz says.

The company has seven employees, including two on its management team.

Gojdycz says they are actively hiring, particularly in software and hardware engineering, but also in business development.

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This article originally ran on InnovationMap.

Houston software company to manage IRA compliance for solar, storage company with national presence

tapping into tech

Houston company's Inflation Reduction Act compliance management software has scored a new partner.

Empact Technologies announced a multi-year agreement with Ampliform, which originates, builds, develops, and operates utility-scale solar and solar plus storage projects. The Empact platform uses a combination of software and services to ensure projects meet IRS regulatory requirements, which focus on wage and apprenticeship, domestic content, and energy and low-income community incentives. The terms of the agreement were not disclosed

Empact will partner specifically with Ampliform’s project Engineering, Procurement, and Construction (EPC) firms, subcontractors, and key suppliers of steel and iron products. In addition, they will work through a project’s life cycle for EPC’s solar modules, trackers, and inverters to manage prevailing wage & apprenticeship, domestic content, and other tax incentive qualification and compliance.

“The team at Ampliform had the leadership and foresight to recognize the significant risks of IRA non-compliance and the need to have third party compliance management in place prior to construction kick-off," Charles Dauber, CEO and founder of Empact, says in a news release. We look forward to helping Ampliform fully leverage the IRA tax incentives to develop and build their project development pipeline.”

Ampliform has approximately 700MW of projects in short-term development. Ampliform also plans 3GW of projects in its development pipeline. Ampliform’s future expansion plans exceed more than 13GWdc in total. Empact will manage the IRA compliance for these projects. According to a Goldman Sachs report, the IRA is estimated to provide $1.2 trillion of incentives by 2032.

Guest column: Cold weather and electric vehicles — separating fact from fiction

EVs in winter

Winter range loss is fueling this season’s heated debate around the viability of electric vehicles, but some important context is needed. Gasoline cars, just like their electric counterparts, lose a significant amount of range in cold weather too.

According to the Department of Energy, the average internal combustion engine’s fuel economy is 15 percent lower at 20° Fahrenheit than it would be at 77° Fahrenheit, and can drop as much as 24 percent for short drives.

As the world grapples with the implications of climate change and shifts toward sustainable technologies, it's important to put the pros and cons of EVs and traditional gas vehicles in perspective. And while Houston isn't known as the coldest of climates, you still might want to review this information.

The Semantics of Energy Consumption Hide the Real Issue: Cost

First, let's talk about the language. When discussing gas vehicles in cold climates, the conversation often centers around "fuel efficiency." It sounds less threatening, doesn't it? But in reality, this is just a euphemism for range loss, something for which EVs are frequently criticized.

Why does that matter? Because for most drivers who travel less than 40 miles a day, what range loss really means is higher fueling costs. When a gas vehicle loses range, it costs a lot more than the same range loss in an EV. For example, at $3.50 a gallon, a car that gets 30 MPG in warm weather and costs $46.67 to go 400 miles suddenly costs $8.24 more to drive the same distance. By contrast, an EV plugging in at $0.13 per kWh usually costs $13 to go 400 miles and bumps up to a piddly $16.25 even if it loses 20 percent efficiency when the temperature drops.

Some EV models lose 40 percent in extreme cold. OK, tack on another $3. That still leaves almost $30 in the driver’s pocket. Over the course of a year, those savings pile up.

Let’s Call It What It Is: Fear Mongering

Any seismic shift in technology comes with consumer hesitancy and media skepticism. Remember when everyone was afraid to stand in front of microwaves and thought the waves would make the food unsafe to eat? Or how, just a decade or so back everyone was talking about how cell phones could spontaneously explode?

Fear of new technology is a natural psychological response and to be expected. But it takes the media machine to turn consumer hesitation into a frenzy. Any way you slice it, 2023 was one big platform for expressing fears around EVs. Headline-grabbing tales of EV woes often lacked context or understanding of the technology. In a highly partisan landscape where EVs have been dubbed liberal leftist technology, what should be seen as a miraculous pro-American, pro-clean-air, pro-energy independence, pro-cost saving advancement is getting a beating in the press. In this environment, every bit of “bad EV news” spirals out into an echo-chamber of confirmation bias.

For example, Tesla’s recent software update was hyped as a 2 million vehicle “recall” even though the software was updated over the air without a single car needing to leave the driveway. Hertz's recent decision to reduce its Tesla fleet was seen by many as a referendum on the cars’ quality but was actually a decision based on Hertz’s miscalculations around repair costs and a mismatch in their projections of consumer demand for EV rentals.

While the cost of repairs might be higher, maintenance and fuel costs are still much lower than gas vehicles. EVs are better daily-use cars than rentals because while our country’s public charging infrastructure is still lagging, home charging is a huge benefit of EV ownership. Instead, the Hertz move and the negative coverage are further spooking the public.

The Truth About EVs

Despite the challenges, it's crucial to acknowledge the environmental advantages of EVs. For instance, EVs produce zero direct emissions, which significantly reduces air pollution and greenhouse gasses. According to the U.S. Environmental Protection Agency, EVs are far more energy efficient than gas-powered cars, converting more than 77 percent of electrical energy from the grid to power, compared to 12-30 percent for gasoline vehicles.

This efficiency translates to a cleaner, more sustainable mode of transportation. And stories of EVs stranded in Chicago aside, generally they perform well in cold weather, as clearly demonstrated in Norway. In Norway, the average temperature hovers a solid 10 degrees lower than in the U.S. Yet 93 percent of new cars sold there are electric. The first-ever drive from the north to the south pole was also completed by an electric vehicle. The success story of EVs in Norway and demonstration projects in harsh winter climates serve as a powerful counterargument to the notion that EVs are ineffective in cold weather.

So where does this leave us? The discourse around EVs and gasoline vehicles in cold weather needs a more balanced and factual approach. The range loss in gasoline vehicles is a significant issue that mirrors the challenges faced by EVs. By acknowledging this and understanding the broader context, we can have a more informed and equitable discussion about the future of automotive technology and its impact on our environment.

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Kate L. Harrison is the co-founder and head of marketing at MoveEV, an AI-backed EV transition company that helps organizations convert fleet and employee-owned gas vehicles to electric, and reimburse for charging at home.