Biochar: burnt offerings?

Biochar is a miraculous material, improving soils, enhancing agricultural yields and avoiding 1.4kg of net CO2 emissions per kg of waste biomass (that would otherwise have decomposed). IRRs surpass 20% without CO2 prices or policy support. Hence this 18-page note outlines the opportunity, leading companies and a disruption of biofuels?


Biochar is presented as a miracle material by its proponents, improving water and nutrient retention in soils by 20% and crop yields by at least 10%. We review technical papers in support of biochar on pages 2-3.

Bio-char pricing varies broadly today, however we argue bio-char can earn its keep at a price in the thousands of dollars per ton, based on its agricultural benefits (pages 4-5).

The production process is described in detail on pages 6-8, reviewing different reactor designs, their resultant product mixes, their benefits and their drawbacks.

Economics are laid out on pages 9-10, outlining how IRRs will most likely surpass 20%, on our numbers. Sensitivity analysis shows upside and downside risks.

Carbon credentials are debated on pages 11-12, using detailed carbon accounting principles. Converting each kg of dry biomass into biochar avoids 1.4kg of CO2 emissions.

We are de-risking over 2GTpa of CO2 sequestration, as the biochar market scales up by 2050. There is upside to 6GTpa, if fully de-risked, as discussed on pages 13-14.

Biofuels would be disrupted? We find much greater CO2 abatement is achieved converting biomass into biochar than converting biomass into biofuels. Hence pages 15-16 discuss an emerging competition for feedstocks.

Leading companies are profiled on pages 17-18, including names that stood our for our screening work.

CO2-EOR: well disposed?

CO2-EOR is the most attractive option for large-scale CO2 disposal. Unlike CCS, which costs over $70/ton, additional oil revenues can cover the costs of sequestration. And the resultant oil is 50% lower carbon than usual, on a par with many biofuels; or in the best cases, carbon-neutral. The technology is fully mature and the ultimate potential exceeds 2GTpa. This 23-page report outlines the opportunity.


The rationale for CO2-EOR is to cover the costs of CO2 disposal by producing incremental oil. Whereas CCS is pure cost. These costs are broken down and discussed on pages 2-5.

An overview of the CO2-EOR industry to-date is presented on pages 6-7, drawing on data-points from technical papers.

Our economic model for CO2-EOR is outlined on pages 8-10, including a full breakdown of capex, opex, and sensitivities to oil prices and CO2 prices. Economics are generally attractive, but will vary case-by-case.

What carbon intensity for CO2-EOR oil? We answer this question on pages 11-12, including a debate on the carbon-accounting and a contrast with 20 other fuels.

The ultimate market size for CO2-EOR exceeds 2GTpa, of which half is in the United States. These numbers are outlined on pages 13-15.

Technical risks are low, as c170 past CO2-EOR projects have already taken place around the industry, but it is still important to track CO2 migration through mature reservoirs and guard against CO2 leakages, as discussed on pages 16-17.

How to source CO2? We find large scale and concentrated exhaust streams are important for economics, as quantified on pages 18-21.

Which companies are exposed to CO2-EOR? We profile two industry leaders on page 22.

What implications for reaching net zero? We have doubled our assessment of CO2-EOR’s potential in this report, helping to reduce the costs in our models of global decarbonization.

Carbon negative construction: the case for mass timber?

The construction industry accounts for 10% of global CO2, mainly due to cement and steel. But mass timber could become a dominant new material for the 21st century, lowering emissions 15-80% at no incremental costs. Debatably mass timber is carbon negative if combined with sustainable forestry. This could disrupt global construction. This 17-page note outlines the opportunity and who benefits.


CO2 emissions of the construction industry are disaggregated on pages 2-3. Some options have been proposed to lower CO2 intensity, but most are costly.

Sustainable forestry also needs an outlet, as argued on pages 4-7. Younger forests grow more quickly, whereas mature forests re-release more CO2 back into the atmosphere.

The case for cross-laminated timber (CLT) is outlined on pages 9-11, describing the material, how it is made, its benefits, its drawbacks, and its CO2 credentials.

CLT removes CO2 at no incremental cost, illustrated with specific case studies and cost-breakdowns on pages 12-13.

CLT economics are attractive. We estimate 20% IRRs are achievable for new CLT production facilities on page 14.

Leading companies are described on pages 15-16, including large listed companies, through to private-equity backed firms and growth stage firms.

Our conclusion is that CLT could disrupt concrete and steel in construction, helping to eliminate 1-5GTpa of CO2 emissions by mid-century.

Paulownia tomentosa: the miracle tree?

The ‘Empress Tree’ has been highlighted as a miracle solution to climate change, with potential to absorb 10x more CO2 than other tree species; while its strong, light-weight timber is prized as the “aluminium of woods”. This note investigates the potential. There is clear room to optimise nature based solutions. But there may be risks for the Empress.


Nature based solutions to climate change represent the largest and lowest cost opportunity in the energy transition. Those who follow our research will know we see potential to offset 15-30bn tons of CO2 emissions per year via this route (summary below).

The costs are incredibly low, at $3-10/ton, when reforestation efforts are well structured through reputable tree-planting charities (note below). Hence we argue that restoring nature will push higher-cost energy technologies off the cost curve.

Broadly, our reforestation numbers assume 3bn acres could be re-planted, absorbing 5T of CO2 per acre per year, which is the average across dozens of technical papers for typical deciduous forests in the Northern hemisphere (data-file below).

There are further optimisation opportunities to capture around 10T of CO2 per acre per year using faster-growing tree species, such as poplar, eucalyptus and mangrove. However, some commentators claim that another tree genus, known as Paulownia, can achieve an incredible 103T of CO2 offsets per acre per year.

If 100T/acre/year were possible, it would be a game-changer for the potential of reforestation. It would, in principle, only require 0.2 acres of Paulownia to offset the 20Tpa CO2 emissions of the average American. For comparison, population density in the Lower 48 is around 6 acres per American.

Paulownia: the miracle tree?

What is Paulownia? Paulownia is a tree genus, named after Princess Anna Pavlovna, daughter of Tsar Paul I of Russia (1754-1801). It has at least 6 species, of which Paulownia tomentosa is the fastest-growing “miracle” variety. This species also goes by the names: Empress Tree, Princess Tree and Kiri (Japanese).

Paulownia tomentosa can grow by a remarkable 6 meters in one year and reach 27m in height. It then adds 3-4cm of diameter to its trunk each year. It is shown below towering over the other plants in a garden (here, at about 1.5 years old).

Reasons for remarkable growth rates include that Paulownia is a C4 plant. This photosynthetic pathway produces more leaf sugar, especially in warm conditions. By contrast, most other trees are C3 plants and fix CO2 using the Rubisco enzyme, which is not saturated (creating inefficiency) and not specific (so it also wastes energy fixing oxygen). Paulownia’s leaves are also very large, helping it to absorb more light. It also simply appears to have a faster metabolism than other species. And finally, its wood is 30-40% less dense than other species, allowing it to accumulate a large size quickly.

Other Advantages?

Paulownia’s timber is highly prized and sometimes termed the “aluminium of woods”. It is light, at 300kg/m3 (oak is 540kg/m3) and 30% stronger than pine. It does not warp, crack or twist. It is naturally water and fire resistant. When used in flooring, it is also less slippery and softer than other woods (which is noted as advantageous for those prone to falling over). The wood is also suited to making furniture and musical instruments.

Pollutants are well absorbed by Paulownia’s large leaves, which can be 40-60cm long. Hence one study that crossed are screens examined planting Paulownia in a Northern Italian city, to reduce particulate concentrations toward recommended limits.

Other advantages are ornamental qualities with shade, “wonderful purple scented flowers” (below), which support honey bees, and the ability to restore degraded soils.

A final remarkable feature of Paulownia is that you can cut it down and it will re-grow, up to seven times, rapidly springing back from its stump.

Source: Wikimedia Commons

Costs of CO2 offsets using Paulownia?

Our usual model for reforestation economics is shown below, assuming a typical planting cost of $360/acre. Paulownia may be modestly more expensive to grow. Our reading suggests a broad range of $2-7/tree multiplied by c250 trees per acre in commercial plantations. The largest costs are cuttings and cultivation of saplings. Thereafter, paulownia requires “minimal management and little investment”. Hence if growth rates are 10x faster than traditional trees, all else equal, we would expect CO2 offset costs to be c10x lower, at $2-5/ton (including land acquisition costs at developed world prices).

Examples of Paulownia?

Over 2M hectares of Empress trees are cultivated in China, often being inter-cropped with wheat. But Paulownia cultivation in the Western world is more niche. As some examples: Jimmy Carter famously grows 15 acres of Paulownia trees on his farm in Georgia. As a commercial investment, WorldTree is an Arizona-based company that manages 2,600 acres of Empress Trees and plans to plant 30,000 acres more. It claims to be the largest grower of non-invasive Paulownia in the world. Furthermore, ECO2 is a privately owned Australian company, headquartered in Queensland. It claims to have cultivated a variety of Paulownia tree, which can reach 20m after 3-5 years and sequester 5-10x more CO2 than other trees, or around 2.5T of CO2 per tree. Finally, oil companies are exploring reforestation initiatives. For example, YPF noted in its 2018 sustainability report plans to test-plant 40 species of Empress Trees in 2019.

Problems with Paulownia?

Invasiveness? One of the largest pushbacks on reforestation is that large-scale planting of single forest varieties may impair biodiversity (a chart of all the pushbacks is below, with some irony that environmentalists call for drastic action to avert the perils of climate change, then often say, no, “not that drastic action”). In the US, Paulownia is categorized as an invasive plant. A single plant can produce 20M seeds in a year. In some States, such as Connecticut, sales of the plant are even banned. Paulownia did in fact exist in North America prior the last Ice Age. It was re-introduced from China in 1834, when seeds were accidentally released from dinnerware packaging materials. Whatever intuitions one might have, some factions are going to protest against Western cultivation of Paulownia.

But the greatest question mark over Paulownia’s CO2 offset credentials is in the numbers. Different studies are tabulated below.

103T of CO2 uptake per acre is the most widely cited number online. But this figure derives from a single study, conducted in 2005. Whose methodology is woefully rough. The study simply assumes a 12’x12′ planting of Paulownia (750/ha, 99.5% survival) and then uses a formula to estimate the CO2 uptake from the trees’ target height and width.

A follow-up study was published in 2019, estimating 38-90T of CO2 uptake per acre per year. But upon review, the upper bound is extrapolating the “maximum growth rate”, which is known to be 2-3x faster than the average growth rate (charts below). The study is also vague on its modelling assumptions. It was funded by a company that commercializes Paulownia plantations. Finally, the study itself notes “additional research is needed in order to quantify the carbon sequestration rates of Paulownia trees under the specific management regime employed by World Tree’s Eco-Tree Program, by continuing to collect DBH values over the 10 to 12 year harvest cycle.”

Achieving monster growth rates will vary with growing conditions. Ideal conditions are warmer climates (the tolerable range is -24 to 45C), flattish, well-drained soil with pH 5-9, <25% clay, <1% salinity, <2,000m altitude, >800mm rainfall and <28kmph wind. But past studies planting the Empress Tree in Eurasia have ranged from 3-15 tons of CO2 per acre per year, which is not so remarkable versus other tree varieties.

Diseases. Finally, dense clusters of trees may fall short of growth targets due to disease. Paulownia, in particular, is susceptible to an affliction known as ‘Witches Broom’, which causes the tips of infected branches to die, leading to a cluster of dead branches. The wood is of poor quality and the growth rate of the plant diminished.

We conclude that there is great potential for nature based solutions, especially for their optimisation to boost CO2 uptake rates. Paulownia may be among the options. However, more data may be needed in the West before it can be heralded as a miracle plant.

Greenhouse gas: use CO2 in agriculture?

Enhancing the concentration of CO2 in greenhouses can improve agricultural yields by c30%. It costs $4-60/ton to supply this CO2, while $100-500/ton of value is unlocked. Shell and ABF have already under-taken projects, while industrial gas and monitoring companies can also benefit. But the challenge is scale. Around 50Tpa of CO2 is supplied to each acre of greenhouses. Only c10% is sequestered. So the total CO2 sequestration opportunity may be limited to around 50MTpa globally.

This 8-page note explains the opportunity, progress to date and our conclusions.

Carbon offsets: ocean iron fertilization?

Nature based solutions to climate change could extend beyond the world’s land (37bn acres) and into the world’s oceans (85 bn acres). This short article explores one option, ocean iron fertilization, based on technical papers. While the best studies indicate a vast opportunity, uncertainty remains high: on CO2 absorption, sequestration, scale, cost and side-effects. Unhelpfully, research has stalled due to legal opposition.


Nature based solutions to climate change are among the largest and lowest cost opportunities to achieve “net zero” and limit atmospheric CO2 to 450ppm, as summarized here. But so far, all of our research has been limited to land based approaches.

The ocean is much larger, covering 85bn acres, compared with 37bn acres of land. Furthermore, compared to the c900bn tons of carbon in the atmosphere, there is c38,000 bn tons of carbon stored in the oceans (chart below). Of this, c1,000bn tons is near the surface and 37,000 bn tons is in deeper waters. The surface and the deep waters exchange c100 bn tons of carbon per year (in both directions), through the “ocean biological pump”, which is c8x higher than total manmade CO2 emissions of c12bn tons of carbon per annum. These numbers are largely derived from the IPCC and our own models.

A vast opportunity to mitigate atmospheric CO2 in oceans is suggested by the figures above. The mechanism would need to increase the primary productivity of oceans (i.e., the amount of CO2 taken up by photosynthetic organisms) and the sinking of that fixed organic material into deep oceans, where it would be remain for around c1,000 years.

Below we will describe the process of ocean iron fertilization, which has been explored to sequester CO2 in the intermediate and deep ocean. First, we will introduce some terms and definitions.

An Ocean In Between the Waves

The mixed layer (ML) captures the surface of the ocean. It is named because this surface layer of water is effectively mixed together by turbulence (e.g., waves) so that its composition is relatively homogenous. The depth of the mixed layer ranges from around 20-80 meters. It tends to be larger in the winter than the summer. This is also the layer of the ocean penetrated by light and capable of supporting photosynthesis.

Phytoplankton in the mixed layer are responsible for 40% of the world’s photosynthesis and oxygen production. They are single celled microorganisms that drift through the water. They comprise micro-algae and cyanobacteria. They make up 1-2% of global biomass. Under optimal conditions, algae can fix an enormous 50T of CO2 per acre per year, which is 10x higher than typical forests (data file here).

However, typical conditions are not optimal conditions. Total primary productivity of marine organisms is around 100 bn tons per year. This implies CO2 is fixed at around 4T/acre/year, on a gross basis, not including the CO2 that is respired back again by other organisms.

Iron is an essential limiting factor for the uptake of macronutrients in phytoplankton. Typically, with iron concentrations below 0.2nM, phytoplankton cannot absorb macronutrients (especially nitrates) for photosynthesis.

The major source for ocean iron is dust inputs to the ocean from land. Indeed, one theory on the cause of the last Ice Age is a vast uptick in desert dusts or volcanic ash blowing into the ocean, enhancing the productivity of phytoplankton, raising the CO2 dissolved in the oceans, and lowering CO2 in the atmosphere (which was measured at 180ppm at the last glacial maximum, 20,000 years ago, compared to 280ppm in pre-industrial times).

The Martin hypothesis suggests, therefore, that Ocean Iron Fertilization (OIF) could increase oceanic carbon, sequestering CO2 in intermediate- and deep-ocean layers for storage over c1,000-years. As Martin famously (hyperbolically) stated it, “give me half a tanker of iron and I will give you another Ice Age”.

High nutrient low-chlorophyll concentrations (HNLC) indicate the areas where OIF is most likely to be effective. HNLC suggests primary productivity is below potential levels, due to a shortage of iron. HNLC regions include the North Pacific, Equatorial Pacific and Southern Ocean.

Ocean Iron Fertilization: Productivity Increases

6 natural and 13 artificial OIF experiments have been performed since 1990 into ocean iron fertilization, denoted as nOIF and aOIF respectively.

All the aOIF experiments were conducted by releasing commercial iron sulphate dissolved in acidified seawater into the propeller wash of a moving ship, over initial areas from 25-300 sq km. By the end of the experiments fertilized areas have spread as far as 2,400 sq km (as evidenced by sulfur hexafluoride tracers). The iron is rapidly dispersed and taken up, dropping from 3.6nM to 0.25nM in 4-days, and often refertilized.

Primary production is significantly enhanced, with potential 100,000:1 ratios of carbon fixation to iron additions. Maximum phytoplankton growth occurs in response to 1.0-2.0nM. For example, in one experiment, denoted as IronEx-2, surface chlorophyll increased 27-fold, peaking at 4 mg/m3 after 7-days, increasing primary productivity by 1.8gC/m2/day. On an annualized basis, this is equivalent to around 10 tons of CO2e per acre per year.

Other studies are shown below. CO2 absorption has been highly variable and does not correlate with the amount of iron that is added. This indicates a complex biophysical system, which requires a deeper understanding.

It’s only a Carbon Sink if the Carbon Sinks.

The largest controversy around the effectiveness of aOIF is whether the carbon will sink into the intermediate and deep oceans. High carbon export has been observed in natural OIF in the Southern Ocean near the Kerguelen Plateau and Crozet Islands, so we know that the process can sequester CO2.

But of the 13 artificial OIF experiments, only one (EIFEX) has conclusively shown additional carbon fixation sinking into the deep ocean. The study saw carbon export down to 3,000m, as phytoplankton blooms aggregated and sank. But others have been less clear cut.

The skeptics argue that across the broader ocean, only 15-20% of CO2 fixed by photosynthesis sinks into the intermediate ocean and just c1-2% sinks into the deep ocean. The remainder is grazed by zooplankton or bacteria, so the fixed carbon is metabolized and respired back into the atmosphere. While CO2 sinking can be higher in nOIF, this is a continuous and slow process, based on the upwelling of iron-rich subsurface waters. Conversely, aOIF will inherently be episodic, with massive short-term iron additions, and thus perhaps struggle to be as effective.

The proponents argue back that past studies have failed to measure carbon sinkage due to limitations in their experimental design. The one clear success, at EIFEX, was a a 39-day study, while others may not have been sufficiently lengthy. In other studies, there were simply no measurements in the deep ocean or outside the fertilized patch for comparison (e.g., IronEx-2). In other studies, the measurement methods over a decade ago may not have been sufficiently — based on tracers (Thorium-234) or physical traps that are meant to collect organic matter, which are known to be disrupted by currents.

Diatom blooms could also enhance future sinkage. Diatoms are a group of unicellular micro-algae that make up nearly half of the organic material in the ocean, forming in colonies that tend to aggregate and sink more readily than other phytoplankton types. Primary productivity has doubled in past aOIF studies where diatoms dominated. The prevalence of diatoms in phytoplankton blooms can be enhanced in areas rich in silicates.

Future experiments can also test the process more effectively, identifying the right conditions for diatoms to dominate the blooms, aggregate and sink; which in tun hinges on abundant silicates and low grazing pressure from mesozooplankton. It is suggested to conduct studies in ocean eddies, which naturally isolate 25-250km diameter areas for 10-100 days. More precise measurement is also possible using satellite data; and unmanned aquatic vehicles equipped with transmissometers, which measure the impedance of light by materials such as sinking organic matter (our screen below finds a rich improvement in autonomy and precision of concepts for the oil and gas industry).

Unintended climate consequences and feedback loops?

The other criticism of OIF is that interfering with nature ecosystems can have unintended consequences, both for biodiversity and for climate.

N2O is a complication. It is a 250x more potent greenhouse gas than CO2. The ocean is already a significant source of N2O, from bacterial mineralization. N2O increased by 8% at 30-50m during on aOIF trial, named SERIES. Models suggest excess N2O after 6-weeks could offset 6-12% of the CO2 fixation benefit. Conversely, other studies suggest OIF acts as a sink for N2O, as it also sinks alongside aggregates.

Dimethyl Sulfide (DMS) is another by-product of aOIF, from the enzymatic cleavage of materials in planktons. DMSs may be a precursor of sulfate aerosols that cause cloud formation. This would counteract global warming. Fertilizing 2% of the Southern Ocean could increase DMS c20% and produce a 2C decrease in air temperatures over the area, one study has estimated. Others disagree and do not find increases in DMS from aOIF.

A commercial hurdle: commercial aOIF is currently illegal

The current legal framework actually prohibits OIF in international waters because of a perceived threat of environment damage by profit-motivated enterprises. Specifically, regulations from 2008 and 2013 categorize OIF as marine geo-engineering and thus it is not allowed at large scale (>300 sq km) or commercially.

This seems unhelpful for unlocking a potentially material solution to climate change. Companies such as GreenSea Venture and Climos, which were set up to harness the opportunity appear to have dissolved. As one recent technical paper stated, “no other marine scientific institutions are willing to take up the challenge of carrying out new experiments due to the fear of negative publicity”.

Others have illegally explored OIF, flouting regulations. For instance, in 2012, Haida Salmon Restoration dumped 100 tons of iron sulphate into international waters off Haida Gwai, British Columbia, in an attempt to raise salmon populations.

Conclusion: large potential, large uncertainty and likely stalled

The costs of OIF are highly uncertain and estimates have ranged from $8/ton of CO2 to $400/ton of CO2. It is currently not clear how a commercial aOIF project would need to be designed in order to calculate precise costs.

Total CO2 uptake potential from ocean iron fertilization is also vastly uncertain and has been estimated between 100M and 5bn tons of CO2 per year globally. The upper end of the range could be conceived as c0.5T of CO2-equivalents sinking per acre per year across a vast c10bn acres of ocean. But again, this is not possible on today’s understanding.

The technique is likely limited to oceans that are deficient in iron but rich enouch in other nutrients (e.g., the North Pacific, Equatorial Pacific and Southern Ocean). Moreover, blooms are limited to c2-months over summer, where nutrients are welling up from subsurface waters, light is available but grazing pressure from zooplankton remains light.

Uncertainty is very high and for now the technique is stalled due to stifling regulation and low research activity. Hence for now, we reflect OIF on our CO2 cost curve, but we have taken the more conservative ranges above as inputs.

Sources:

Yoon, J-E., Yoo, K-C., MacDonald, A., et al (2018). Reviews and syntheses: Ocean iron fertilization experiments – past, present, and future looking to a future Korean Iron Fertilization Experiment in the Southern Ocean (KIFES) project. Biogeosciences, 15.

Ciais, P., C. Sabine, G. Bala, L. Bopp, V. Brovkin, J. Canadell, A. Chhabra, R. DeFries, J. Galloway, M. Heimann, C. Jones, C. Le Quéré, R.B. Myneni, S. Piao & P. Thornton, (2013). Carbon and Other Biogeochemical Cycles. In: Climate Change 2013: The Physical Science Basis. Contribution of Working Group I to the Fifth Assessment Report of the Intergovernmental Panel on Climate Change. Cambridge University Press, Cambridge, United Kingdom and New York, NY, USA.

Report to Congress (2010). The Potential of Ocean Fertilization for Climate Change Mitigation.

Can carbon-neutral fuels re-shape the oil industry?

Fuel retailers have a game-changing opportunity seeding new forests, ourlined in our 26-page note. They could offset c15bn tons of CO2 per annum, enough to accommodate 85Mbpd of oil and 400TCF of annual gas use in a fully decarbonized energy system. The cost is competitive, well below c$50/ton. It is natural to sell carbon credits alongside fuels and earn a margin on both. Hence, we calculate 15-25% uplifts in the value of fuel retail stations, allaying fears over CO2, and benefitting as road fuel demand surges after COVID.


The advatages of forestry projects are articulated on pages 2-7, explaining why fuel-retailers may be best placed to commercialise genuine carbon credits.

Current costs of carbon credits are assessed on pages 8-10, adjusting for the drawback that some of these carbon credits are not “real” CO2-offsets.

The economics of future forest projects to capture CO2 are laid out on 11-14, including opportunities to deflate costs using new business models and digital technologies. We find c10% unlevered IRRs well below $50/ton CO2 costs.

What model should fuel-retailers use, to collect CO2 credits at the point of fuel-sale? We lay out three options on pages 15-18. Two uplift NPVs 15-25%. One could double or treble valuations, but requires more risk, and trust.

The ultimate scalability of forest projects is assessed on pages 19-25, calculating the total acreage, total CO2 absorption and total fossil fuels that can thus be preserved in the mix. Next-generation bioscience technologies provide upside.

A summary of different companies forest/retail initiatives so far is outlined on page 26.

What oil price is best for energy transition?

It is possible to decarbonize all of global energy by 2050. But $30/bbl oil prices would stall this energy transition, killing the relative economics of electric vehicles, renewables, industrial efficiency, flaring reductions, CO2 sequestration and new energy R&D. This 15-page note looks line by line through our models of oil industry decarbonization. We find stable, $60/bbl oil is ‘best’ for the transition.


Our roadmap for the energy transition is outlined on pages 2-4, obviating 45Mbpd of long-term oil demand by 2050, looking across each component of the oil market.

Vehicle fuel economy stalls when oil prices are below $30/bbl, amplifying purchases of inefficient trucks and making EV purchases deeply uneconomical (pages 5-6).

Industrial efficiency stalls when oil prices are below $30/bbl, as oil outcompetes renewables and more efficient heating technologies (page 7).

Cleaning up oil and gas is harder at low oil prices, cutting funding for flaring reduction, methane mitigation, digitization initiatives and power from shore (pages 8-9).

New energy technologies are developed more slowly when fossil fuel prices are depressed, based on R&D budgets, patent filings and venturing data (pages 10-11).

CO2 sequestration is one of the largest challenges in our energy transition models. CO2-EOR is promising, but the economics do not work below $40/bbl oil prices (pages 12-14).

Our conclusion is that policymakers should exclude high-carbon barrels from the oil market to avoid persistent, depressed oil prices (as outlined on page 15).

Qnergy: reliable remote power to mitigate methane?

This short note profiles Qnergy, the leading manufacturer of Stirling-design engines, which generate 1-10 kW of power, for remote areas, where a grid connection is not available. The units are particularly economical for mitigating methane emissions, with a potential abatement cost of $20/ton of CO2-equivalents avoided.


750,000 bleeding pneumatic devices around the oil and gas industry are the largest single source of methane leaks, with each medium-bleed device leaking an average of 1.5T of methane per year, comprising 35% of the oil and gas industry’s total emissions (chart below, data here).

We have screened the US onshore space, operator-by-operator, acreage position by position, to see who most urgently needs to replace bleeding pneumatics (chart below, data here, note here). But how will they be replaced?

The challenge is power. An 8-well pad will typically require 2kW of electricity, which is low because the pneumatic pressure of natural gas is used in control and actuation of valves. The power demands rise to 4kW if compressed air is used in lieu of methane. Compressed air is reliable, easy to retrofit and does not cause warming when it bleeds into the atmosphere. But a compressor is needed, and the compressor needs to be powered (below).

Qnergy’s Powergen product uses a Stirling engine to generate electricity from heat. It is fuel agnostic and can run on waste heat or in-basin gas.

The PowerGen product was launched in 2017 and its adoption has been growing at a 300% CAGR. The company now also manufactures and sells compressed air pneumatic devices, which will be powered by its Stirling engines. The 5,650 series generates 5.7kW of power from 1.4mcfd of gas inputs (implying c30% thermal efficiency).

NASA has accredited the design as the most reliable ever invented for a heat engine. One of the first units has now run for 24,000 hours without requiring maintenance (equivalent to driving a car to the moon and back 2x). Design life is estimated at over 60,000 hours (7-years). The engine runs between -40C in Alaska and 60C desert installations. Each unit is also remotely monitored, with live support, for preventative maintenance and to detect issues.

Total cost of ownership for Stirling’s Powergen is cited as the lowest cost power solution to replace bleeding pneumatic devices: costing $100k for Qnergy unit, $150k for a microturbine, $320k for a combination of renewable power and fuel cells, and c$380k for a thermo-electric alternative.

Emissions reductions from each Qnergy Powergen unit saves 325T of CO2e-emissions per annum, while powering each unit will emit 25T of CO2e, for a net saving of 300T/CO2e. At a total cost of $100k, this implies a CO2 abatement cost of $20/ton over a c15-year life of a Qnergy Powergen unit.

For our published screen of companies in methane mitigation, please see our data-file here.

For Qnergy’s latest presentation, see the video below, and please let us know if we can helpfully introduce you to the team at Qnergy.

Ten Themes for Energy in the 2020s

We presented our ‘Top Ten Themes for Energy in the 2020s’ to an audience at Yale SOM, in February-2020. The audio recording is available below. The slides are available to TSE clients, in order to follow along with the presentation.


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Our content shall not be construed as investment advice on the merits of buying, selling, subscribing to, or underwriting any shares, securities of other financial investments. You do any of the above entirely at your own risk: Thunder Said Energy shall have no liability whatsoever for any adverse consequences thereof.

We strive for, but do not guarantee, the accuracy of our content. We do not represent that it is error-free, will be corrected or that your use will provide specific results. If you believe anything is inaccurate, please let us know via email, so we may update it as appropriate.

The future is uncertain. There can be no assurance that our opinions, forecasts or estimates will be realized.

You hereby acknowledge that the risk to the accuracy and completeness of our content, and any reliance upon it, is with you.

4. Limitation of Liability

Thunder Said Energy will not be liable for any loss of profits, business, contracts, revenue, goodwill or anticipated savings or other indirect losses

Nothing in these terms seeks to exclude or limit any liability that cannot be excluded or limited by US, UK or European law.

5. Intellectual Property Rights

Our content, including any information, imagery or materials created by us are owned by and are confidential to Thunder Said Energy and are protected by copyright.

Any citation of our content, including short passages of text is to be attributed to Thunder Said Energy, plus a link to our website www.thundersaidenergy.com. We would appreciate it if you sought our prior approval for citing our content.

Distributing, reproducing, transmitting or re-selling our content in any medium, whole or in part, is prohibited without prior permission of Thunder Said Energy. We reserve the right to prosecute against illegal copying or sharing of our content.

You may not alter, obscure or remove any trade marks from our content.

6. Links

Other websites and resources are linked on our site with the aim of helping our users

All are independent from Thunder Said Energy, with the exception of Redburn, which is a collaborating partner of Thunder Said Energy.

Thunder Said Energy does not accept any responsibility for the content or the use of linked websites and resources; or of the content of other sites that link to ours.

Use of any links is made at your own risk. You must take your own precautions to ensure any selected link or download is free from any viruses or other unpleasantness.

You must not link to our website from any site that is indecent, inappropriate or unlawful.

7. Accessing Our Content

You may be provided with a username and password to access our content. You are responsible for keeping them confidential

You may not share the username and password with, or transfer them to any third party.

You must notify Thunder Said Energy immediately if you become aware of any unauthorised use of your user name and password, or any other breach of security.

If your access to our content occurs through a corporate account, your rights to access our content may cease if your employment terminates at that company, which will be at the discretion of Thunder Said Energy.

You and your company are responsible for notifying Thunder Said Energy of any termination of employment, and any unauthorised use of our content after your employment ceases.

8. Viruses

Thunder Said Energy does not guarantee that its site will be secure or free from bugs or viruses. You are responsible for configuring your own virus protection software.

You must not misuse the site by knowingly seeking to introduce viruses, trojans, worms, logic bombs or other material which is malicious or technologically harmful.

You must not attempt to gain unauthorised access to the Site, its server, or any computer or database connected to the Site.

In the event of breaching these conditions, Thunder Said Energy will cooperate with relevant law enforcement authorities, may disclose your identity to them, and your right to use the site will cease.

9. Privacy and Cookies

Thunder Said Energy’s policy on data protection, privacy and cookies is set out in our privacy notice and cookie policy. You are encouraged to read both of these.

10. Governing Law and Jurisdiction

These terms of use and their formation are governed by US, UK and European law.

Thunder Said Energy may pursue injunctive relief or similar to enforce the provisions of these terms of use in any appropriate forum.

11. General

Any formal legal notices to Thunder Said Energy must be sent to [email protected]

Failure by Thunder Said Energy to enforce a right does not result in a waiver of such right.

If any provision in these terms of use is deemed invalid or unenforceable, the rest of these terms will remain in full force and effect.

These terms of use, privacy notice and cookie policy, constitute the entire agreement between you and Thunder Said Energy relating to your use of the Site, and supersede all other or previous agreements.

Thunder Said Energy may amend these terms at any time by posting such changes on this page of the site.

12. Further Information

Further information on these terms or any queries may be made by contacting Thunder Said Energy via the postal address, email address or phone numbers below.

Privacy Policy

Thunder Said Energy (“we”, “us”) respects your preferences on the collection and use of your personal information. The following statements explain our policies.

We are committed to protecting your privacy, while using our websites, products and services (our “platform”).

You should review this Privacy Policy periodically to keep up to date on our most current policies; as we reserve the right, at any time, to modify this Privacy Policy.

Any changes will be posted in this Privacy Policy. Any material changes may also be notified, e.g., via email.

1. Scope

This Policy applies to our platform. It provides you with guidance on your rights and obligations pertaining to your personal information.

2. Collection of Personal Information

Our general philosophy and ambition is to safeguard your personal data by minimising what we collect, and storing what we do collect in a secure manner.

Thunder Said Energy is the data controller for personal data we collect through our platform.

Thunder Said Energy will collect personal information that is necessary for our business: to improve the usability of our platform and help us tailor content for you.

Specifically, when you register with Thunder Said Energy, we will collect your name, email address, location, subscription preferences and preferred method of contact. We may collect additional information.

Collecting personal information will be self-apparent or will be disclosed to you at the time of collection: most often, when you enter it into an online submission form, when you request a trial or when you subscribe to our platform.

Thunder Said Energy will use this information for the purposes for which it was collected.

Thunder Said Energy does not share any personal data with any third parties, potentially with the exception of Redburn (see below).

Rob West, the principal research analyst at Thunder Said Energy, is bound by a non-compete agreement with Redburn, until December-2019, originating from Rob’s employment at Redburn, which ended in March-2019. As part of Redburn’s collaboration with Thunder Said Energy, it was agreed to release Rob from certain provisions of the non-compete. Specifically, pre-existing clients of Redburn will not be blocked from accessing Thunder Said Energy’s content. However, Redburn reserves the right to ask Thunder Said Energy for the names of firms who have accessed specific content and research products, in order to ensure compliance with this non-compete agreement.

Our platform uses several ‘plug ins’ and ‘cookies’ which are described in more detail below, including Google Analytics.

3. Purpose of Personal Information

We may use your personal information for operational, legal, administrative, and other legitimate purposes permitted by applicable laws. This may include:

Providing you with requested emails, products and services.
Providing you with information regarding our company.
Monitoring your use of our platform.
Providing customized information to you.
Confirming or invoicing purchases of our products.
For information verification purposes.
4. Access Rights and Ensuring Accuracy

We endeavour to ensure personal information is reliable, accurate, and up-to-date.

You may access your personal information, to update, and correct inaccuracies by email request (as long as your account is active).

You may limit the use and disclosure of your information by unsubscribing from marketing communications or contacting us at [email protected]

Some information may remain in our records even after you request deletion of your information, for example, if required by relevant legal authorities.

There may be limits to the amount of information we can practically provide about personal information that we store, due to cost, or others’ privacy rights.

5. Sharing Personal Information

We do not expect to work with any service providers that will handle our clients’ personal data. If we did work with any such service providers in the future, we would require them to treat personal information as confidential, and not for their own marketing purposes.

There could be instances when we disclose your personal information without providing you with a choice, in order to comply with the law or in response to a court order, government request, or other legal process; to protect the interests, rights or safety of Thunder Said Energy or others; or respond to adverse third parties in the context of litigation. But we consider this unlikely.

Should Thunder Said Energy establish future subsidiaries or affiliate companies in the future, controlled by the management of Thunder Said Energy, then we may disclose personal information “internally” to these subsidiaries or affiliate companies.

Generally, we will not transfer personal data to third parties of affiliates where Thunder Said Energy’s management team does not control it.

If Thunder Said Energy sells all or part of its business, or is involved in a merger, you agree that we may transfer your personal information as part of that transaction.

If you provide comments on Thunder Said Energy on a social media or other public platform, you should be aware that the information provided there will be broadly available to others to see, and could be used to contact you. We are not responsible for any information you choose to submit on these forums or their consequences.

6. Security of Personal Information

We take reasonable and appropriate steps to ensure the security of your personal information. Physical, administrative, and technical safeguards are in place to help protect personal information.

7. Retention of Personal Information

We will retain your personal information as needed to fulfill the purposes for which it was collected, and to comply with our business requirements.

Typically, we will retain your name and contact details for the duration of our relationship with you, as a client or prospective client of Thunder Said Energy. Any data collected for analytics purposes is retained for a shorter time, while we are carrying out the relevant analytics.

8. Cookies

A cookie is a text file, created when your browser visits a particular website. Every time you visit our website, your browser queries for and retrieves any cookies that have previously been set. Cookies should enhance the user’s website experience, including authentication, storing your preference and personalizing the website’s appearance.

The cookies Thunder Said Energy collects may include the following: a unique identifier, user preferences, and profile information used to personalize the content shown.

As far as Thunder Said Energy is aware, all cookies used on its website are industry-standard, such as those used by Google Analytics; and we have not knowingly added any specific cookies of our own.

We may collect the physical location of your device, with your consent, for purposes consistent with this Privacy Policy.

Some web browsers permit you to broadcast a preference that you not be “tracked” online. We do not actively modify your experience based upon such a signal.

We do not participate in interest based advertising.

9. Cross Border Transfer of Personal Information

Thunder Said Energy aims to minimise the the cross-border transfer of personal information. However, our company is based in the United States of America (USA). Thus, if you are not based in the USA, and you enter personal information into our website, then you agree for the information to be transferred into the USA.

By using our website, or providing any personal information to us, you consent to the transfer, processing, and storage or such information outside of your country of residence.

10. Prospective Employees and Employee Information

If you submit an application for employment to Thunder Said Energy, we may collect and store any relevant information you disclose to us in your application.

Information on employees or prospective employees (“Employee Information”) will be used for legitimate business purposes, to evaluate applications, manage the employee-employer relationship and comply with applicable laws and regulations.

We may disclose your Employee Information if required or permitted to do so by law (such as when part of a governmental agency action or litigation), governmental or quasi-governmental requests, or a regulatory organization, or to relevant third parties such as site technicians, auditors, lawyers, or professional advisors.

We will not intentionally communicate or make available to the general public in any manner, employees’ sensitive details, such as social security numbers.

We may share Employee Information with third parties who provide outsourced human resource functions. Those third parties will be required to protect Employee Information.

11. EU General Data Protection Regulation

The Thunder Said Energy Policy for the Processing of Data Governed by GDPR addresses our commitment to the processing of personal data under the EU General Data Protection Regulation 2016/679.

If you are located in the European Economic Area (“EEA”) or Switzerland, you have the rights to request the following:

To request confirmation of whether we process personal data relating to you
To request confirmation of what personal data we process relating to you
To request that we rectify or update any personal data relating to you that is inaccurate, incomplete or outdated.
To request that we erase your personal data ,or that we no longer have your consent to process your personal data
To request that we restrict the use of your personal data
You may contact us at [email protected] to exercise any of these rights described above. You also have the right to lodge a complaint with your country’s data protection supervisory authority.

12. Other Contractual Relationships

If you enter into a separate contractual relationship us, which requires collecting, using, or sharing information about you in a different manner than described in this Privacy Policy, the terms of that agreement will apply.

13. Other Websites

This Privacy Policy does not apply to sites or services offered by other companies or third parties, that may be displayed as content or linked on our website.

14. Contact Information

If you have any questions or concerns related to this Privacy Policy, please contact the us at [email protected]

Updated 2nd April, 2019.

Thunder Said Energy Policy for the Processing of Data Governed by GDPR

Thunder Said Energy may collect, process or handle Personal Data relating to its customers or prospective customers (“customers”) in the European Economic Area (“Personal Data”).

Thunder Said Energy’s relationship with its customers is governed by our terms of use (above), privacy policy (above), and potentially other commercial agreements. It is also legally bound under the EU General Data Protection Regulation 2016/679 (“GDPR”) in its collection, uses, and processes around Personal Data.

This Policy describes Thunder Said Energy’s commitment to the processing of Personal Data under the GDPR.

Please contact [email protected] if you would like an executed version of this Policy, or for answers to any GDPR queries arising from thie policy.

1. Appropriate Technical and Organizational Measures. When Thunder Said Energy processes Personal Data on behalf of a customer, appropriate technical and organizational measures satisfy the requirements of GDPR, to ensure the security of Personal Data is appropriate to the level of risk, and to help ensure protection of the rights of the data subject.

2. Subprocessing. Thunder Said Energy does not currently work with any subprocessors. If we were to do so in the future, subprocessors would be required to provide at least the same level of protection as is described in this Policy. Thunder Said Energy would remain liable to its customers for any actions by its subprocessors that impact any rights guaranteed under the GDPR.

3. Written Instructions. Thunder Said Energy only processes Personal Data in accordance with the terms set out in this Policy, its Privacy Policy (above) and other written terms agreed with its subscribing customer. These documents set out the subject-matter, duration, nature, purpose, types of Personal Data, categories, obligations and rights relating to such Personal Data.

4. Transfers to non-EEA Countries. Most of the Personal Data collected by Thunder Said Energy will be collected via its US-website. Where Personal Data are disclosd Thunder Said employees in the EEA, they may be transferred to Thunder Said Energy’s office in Connecticut, United States. Every effort will be made to ensure the transfer is fully secure. Personal data is not expected to be transmitted to other destinations, beyond the United States and EEA.

5. Confidentiality. Thunder Said Energy requires that its employees process Personal Data under appropriate obligations of confidentiality.

6. Cooperation Concerning Data Subjects. Thunder Said Energy cooperates with reasonable requests of its customers (at the customer’s reasonable expense) to help them fulfill their obligations under GDPR to respond to requests by data subjects to access, modify, rectify, or remove their Personal Data.

7. Cooperation Concerning Customer Documentation. Thunder Said Energy cooperates with the reasonable requests of its customers to provide information necessary to demonstrate compliance with this Policy and the GDPR, or to conduct audits of the Personal Data it holds that was received from the customer. Audits may only occur once per calendar year, and during normal business hours. Audits will only occur after reasonable notice (not less than 30 business days). Audits will be conducted by customer or an appropriate independent auditor appointed (not by a competitor). Audits may not have any adverse impact on Thunder Said Energy’s normal business operations. Auditors shall not have access to any proprietary or third party information or data. Any records, data or information accessed by the Company and/or its representatives in the performance of any such audit will be deemed to be the confidential information of Thunder Said Energy, as applicable, and may be used for no other reason than to assess compliance with the terms of this Policy. Thunder Said Energy shall be entitled to charge the Customer USD500 per hour for any hours of its employees’ time that is taken up in the audit.

8. Personal Data Breach. In the event of a Personal Data breach under GDPR, Thunder Said Energy will notify its applicable customers without undue delay after becoming aware of the breach. Such notification(s) may be delivered to an email address provided by Customer or by direct communication (for example, by phone call or in-person). The customer is responsible for ensuring any email address provided by them is current and valid. Thunder Said Energy will take reasonable steps to provide information reasonably required.

9. Deletion of Data. Thunder Said Energy will delete or return all Personal Data to a customer, following the termination of the customer’s relationship, unless it is required to retain it by applicable laws and compliance policies. Thunder Said Energy reserves the right to charge a reasonable fee to comply with any customer’s request to return Personal Data.

10. Governing Law. This Policy shall be governed by the governing law (and subject to the jurisdiction(s)) of the relevant Agreement and otherwise subject to the limitations and remedies expressly set out in the Agreement.
If you have any queries about this Policy please contact [email protected]