[Scott] Coming up on "Energy Switch," part two of Decarbonizing Industry.

This time looking at fertilizer and petrochemicals.

- Carbon is the building block of everything we see.

And if that carbon didn't come from a plant source, it came from petrochemicals.

About 14 million barrels of oil a day.

And then eight percent of the world's gas supply goes into petrochemicals.

- Right now, there's a lot of wasted fertilizer.

If we used our fertilizer more precisely, it would reduce the greenhouse gases and it would make the local environmental conditions much better.

[Scott] Next on "Energy Switch," Decarbonizing Heavy Industry Part Two.

[Narrator] Funding for "Energy Switch" was provided in part by The University of Texas at Austin, leading research in energy and the environment for a better tomorrow.

What starts here changes the world.

[upbeat music] - I'm Scott Tinker, and I'm an energy scientist.

I work in the field, lead research, speak around the world, write articles, and make films about energy.

This show brings together leading experts on vital topics in energy and climate.

They may have different perspectives, but my goal is to learn, and illuminate, and bring diverging views together towards solutions.

Welcome to the "Energy Switch."

In part one of this discussion, we heard ideas to decarbonize cement and steel, two industries that built the modern world.

We'll conclude with a look at fertilizer, which has made modern agriculture possible, and petrochemicals and plastic, which today go into nearly every product.

These two industries are vital to the success of global societies, yet produce a large portion of global greenhouse emissions.

We'll look at ideas to reduce that again with, Samantha Gross is the director of Energy Security and Climate Initiative at Brookings Institute, and formerly the director of the Office of Climate and Clean Energy at the DOE.

Rebecca Dell.

She's the senior director for industry at the ClimateWorks Foundation, formerly at the U.S. Department of Energy and the Scripps Oceanographic Institute.

Next on "Energy Switch," part two of our look at potential solutions to decarbonize industry.

Let's get started.

Fertilizers.

How much do we use today globally, and why is it important?

- The key ingredient in most fertilizers is ammonia.

That is the single largest production chemical of any chemical in the world.

We make almost 200 million tons a year of ammonia, and about 70% of that goes into fertilizer.

- Fertilizers have helped to feed the world.

- Yeah, so it's kind of an amazing fact that if you were born any time starting around the mid-1980s, then on average, at least half of the nitrogen atoms in your body were put there through the Haber-Bosch process at an ammonia factory.

- Wow.

- Our bodies are physically made out of the atoms that went into the fertilizer.

- Interesting.

So what is ammonia?

- Ammonia chemically is NH3.

It's made of nitrogen and hydrogen.

- Okay.

- And the Haber-Bosch process, which is how we've been making ammonia forever, basically takes nitrogen out of the air and combines it with hydrogen that you have gotten from somewhere.

- Okay.

- Chemically.

So we're sort of back to, how do you make hydrogen?

- Right.

- The reason why ammonia production is a large emitter of greenhouse gases is because it uses hydrogen.

Today, that hydrogen comes from splitting molecules of natural gas into their component, carbon and hydrogen, with the carbon pairing up with oxygen and going off as CO2.

- Okay.

- And then you take the hydrogen off and use it to make ammonia.

- Here in the United States, we mostly make that hydrogen from methane.

But in other countries, they use other fossil fuels.

Particularly in China, they use coal.

And so you react coal with water to get the hydrogen out of the water-- - Oh, okay.

- and emit the CO2.

That process is three or four times as much CO2 per unit of ammonia.

- As splitting methane.

- As splitting methane.

- Interesting.

- Yeah.

- And then in other countries, they use oil to make ammonia.

It's just a matter of what fuel is available, cheapest locally.

- For your hydrogen.

Right.

So decarbonizing that is a challenge.

I mean, are there changes in fertilizers that we can do to start to decarbonize the fertilizer sector?

How do we go about it?

- Sure.

I mean, as we've been talking about with some other materials, the first thing we can do is we can use fertilizer more efficiently.

Right now, there's a lot of wasted fertilizer, and that has a lot of local environmental problems that it creates.

It runs off into the water, it can contaminate ground water, it can also be converted into other greenhouse gases that will then be emitted from agricultural fields.

So if we used our fertilizer more precisely, it would reduce the greenhouse gases both coming and going, and it would make the local environmental conditions much better.

- Right.

- There are some big questions.

How much reduction is actually available without reducing our agricultural yields?

And how do we do that in countries where they don't have access to like sophisticated precision agriculture technologies, and, you know, what are there things that they can do?

- Gotcha.

- You talk about runoff.

This gets into waterways, it flows into the oceans.

And what happens is that leftover fertilizer fertilizes those waterways and the oceans as well.

And so you get an overgrowth of algae.

So it's taking up the fertilizer and it's growing more, which then soaks up all the oxygen, and so you have areas where they're full of algae but where fish can't live because there's not enough oxygen for the fish.

- Interesting.

- Another interesting area that's more about human health is you get runoff in the form of nitrates.

And nitrates are really bad for human babies.

So it's not just about greenhouse gases or even mostly about greenhouse gases.

The greenhouse gas benefits are almost a side benefit to all the other benefits that we can get from more efficient use.

- Yeah, I love that you're talking about the broader environment.

I mean, we were talking about decarbonization here today, that's our topic, - Yeah.

- but the land, the air and the water matter a lot.

- Yeah.

And different people have very different ideas about how much efficiency is available.

And so you'll find estimates of anywhere between, we could reduce fertilizer use by 20%, up to, we could reduce fertilizer use by 90%.

- That's quite a spread.

- It's quite a spread, yeah.

We know that there is a significant improvement available but how much of it is achievable?

I don't think we know.

- I mean, are there some non-ammonia options to fertilizers?

- Sure.

- Or non, that don't have the CO2-equivalent challenges?

- Yeah.

There are things like biotechnology interventions that make it possible for a wider variety of plants to use nitrogen from the atmosphere.

Also, other forms of nitrogen like nitrates instead of ammonia.

Probably the optimal pathway would be some combination of make the ammonia more cleanly and use these other types of interventions all in a balanced way.

We as humans don't have a great history of following optimal pathways.

- Yeah.

- We don't usually, - I think you just describe my life.

- Yeah.

That's not a thing that we're usually able to pull off.

- Not an optimization process here for sure.

- And so even if we achieve significant reductions in the climate impacts, it's probably gonna be a very messy process.

- Interesting.

- Yeah.

And I'll add, for small farmers or subsistence farmers, there are completely organic ways to use less fertilizer as well.

Certain kinds of plants fix nitrogen out of the air.

They have the ability to do that, so they actually make the soil better.

Legumes are good nitrogen fixers.

You can rotate crops that help to fix nitrogen and improve the soil.

You can plant cover crops that fix nitrogen.

And so there are both high and low tech solutions that make a lot of sense.

- That's a great point, Samantha.

Does hydrogen play a role in that process?

- Yeah.

- Bring us back there.

- Sure.

So if we are successful in these efficiency efforts, that will reduce the amount of ammonia that we need, it will not eliminate the need for ammonia.

Basically, all of the energy use, almost all of the energy use in that process comes from making the hydrogen.

And so from the production side, most of the problem is can we get enough clean hydrogen.

And I think ammonia is a particularly stark example of something that you see in a lot of heavy industry, which is that there are enormous economies of scale.

So almost all of the ammonia that's used by every farmer everywhere in the world is made in about 300 factories.

- Three hundred?

- Yeah.

- It's funny, you think about there only being 300 factories and how concentrated that is.

On the other hand, that's only 300 factories that we need to tackle to deal with this problem.

- That's a good point.

- And as the larger hydrogen economy develops, there will be more clean hydrogen available to those.

But those 300 ammonia factories could be kickstarters for hydrogen demand in the areas where they are located.

I think that could really be an opportunity.

- That's interesting.

The end cost to fertilizer.

Back to fertilizer a little bit, how does making hydrogen differently affect the cost?

How much is the cost of fertilizer to farmers?

- Yeah, those are great questions.

So, it can be a significant cost for a farmer, but it's not a significant portion of the cost of the food.

You're not gonna see that difference in your grocery store.

- Right.

- But farmers, like people who own factories, are often operating on very narrow margins because the price of ammonia is very, very closely tied to the price of the fossil fuel that it's made out of.

Here in the U.S., gas, those prices can be very volatile.

- Yeah.

- And so in some ways, the volatility of the price can be as much of a source of difficulty as the absolute level of the price.

And so one of the things that people are thinking about is that can we make the clean alternatives to conventional ammonia production have some additional price stability in them.

- Interesting.

- One of the most damaging consequences of these dynamics of this potential volatility since Russia invaded Ukraine.

- Yes, huge.

- Because Russia, because it has so much fossil fuels, it's one of the world's leading producers of fertilizer.

And when that fertilizer left the global market, it caused crazy price spikes all over the world.

And those were particularly damaging to farmers in low income countries that did not have domestic production of fertilizer.

Yes, absolutely.

- That were entirely dependent on international trade.

- Yeah, I really appreciate you both, the way you're sharing and explaining.

Quite often, when we hear somebody selling something, you hear about this thing, it's completely factual.

- It's great.

- But it's not factually complete, which, there's a big difference.

And you're sharing kind of what I would describe as more factually complete.

- And if you don't think about it that way, change doesn't happen.

[Scott] Yeah.

Yeah.

- Yeah.

- You have to take this complete view or you don't get the outcome you want.

- And I think also, you know, these basic materials, they are a foundation of our economy.

And governments understand that, and so governments are perfectly happy to distort the markets for these materials in all kinds of ways because they know that ensuring that the material is available serves a lot of social goals.

- Right.

- In India, the country that has the most subsistence farmers of any country in the world, they have huge subsidies on fertilizer.

The consequence of this is that they use way more fertilizer than they need and have lots of problems with fertilizer runoff.

- Yep.

- But it makes sure that the hundreds of millions of small scale farmers are actually able to feed their families.

- Right.

- And that is a more important social goal for the Indian government.

And fair enough.

And so we need to understand both.

Of course, in these markets, like in every market, people and businesses respond to incentives.

But we need to also understand that these markets don't actually work the way that the markets were used to work.

In some ways, they're almost more like utilities than consumer products.

- Right.

A lot of complex relationships in them too.

Speaking of complex plastics and petrochemicals.

So where do we use petrochemicals and plastics today?

- Where do we not use petrochemicals and plastics?

That might almost be an easier question to answer.

- Can you?

I can't.

I'm going through it in my head.

- Not really.

I mean, the modern world is completely unimaginable.

- You think of everything that carbon is sort of the building block of us and everything we see.

- Right.

- And if that carbon didn't come from a plant source, it came from petrochemicals.

- How much goes into the whole petrochemical and plastics industry?

- Well, if you look at our overall oil demand, about 14%.

- Okay.

- Or that would be about 14 million barrels of oil a day.

- Okay.

- Going in.

And then eight percent of the world's gas supply goes into petrochemicals.

And so, unlike the other products we've been talking about where they're pretty specific and there's one process, when we speak about petrochemicals, there's a whole suite of different things.

Basically, they're all things made of carbon atoms.

But after that, the similarities start to dissipate.

[Scott] Gotcha.

- Certainly, the chemicals industry is incredibly diverse and complicated, but I also think it's important that we not kind of mystify it.

If you think about you go into a pastry shop and you see a window display that's just an amazing variety of different delicious things.

- This is not the place my head was going when we're talking about plastics and petrochemicals.

Pastry shop, don't ruin it for me here.

- Stay with me.

- Okay.

- You go into a pastry shop and you see just like an amazing variety of different delicious things.

- Yeah.

- But all of them are made out of flour, sugar, butter, and a couple of other ingredients.

[Scott] Yum.

- And in the same way, there's an amazing variety of things that come out of the chemicals industry, - Okay.

- but they're all basically made out of like ammonia, ethylene, and propylene, which are kind of the backbone chemicals of most plastics.

Then benzene, toluene, xylene, which are collectively referred to as BTX, and methanol.

So that's seven chemicals.

And that's basically two-thirds of the greenhouse gas emissions from the chemical industry.

- Gotcha.

Phew!

[group laughing] I was thinking the stuff on my pastry was gonna be BTX or something.

- You did ask if there was anything in the modern world that was untouched by the petrochemicals industry, and I don't think there's any petrochemicals in your pastry.

- To get there, maybe, - Yeah, there were some definitely.

like the appliances that were used to manufacture them, but you are not eating them.

- Yeah, sure.

- As long as there's not any sort of coloring in the frosting.

- Right.

- Or dough conditioners.

[Scott] You never know.

- True.

- So these seven, the big seven, let's call them, I mean, is there a way to reduce that sector?

- Well, I think those building blocks are building blocks for good reasons.

They make sense for creating all the products that we are.

So like the other products we've talked about, we need to talk about how to do them better.

- Okay.

- And there are some common themes here.

A lot of hydrogen goes into producing these various chemicals, and so doing hydrogen better.

- Okay.

- A lot of the energy that goes into these goes into providing the heat that makes these kinds of chemical reactions go.

So finding ways through catalysis or more efficient processes to put less heat in is another way to do these things.

Also, not just running these things at lower temperatures, but how to get the temperatures you need without burning something.

- So the final products, most of the final products that come out of the chemicals industry are carbon-based products.

So that means that when you put your carbon-based fossil fuel into your chemical plant, some of that you're burning for energy and you get CO2 that ends up in the atmosphere.

But as much of it as possible, you are actually taking the atoms from the fuel and putting those atoms in the product.

And so the fuel is both the feedstock and the energy source.

On the feedstock side, you can say, okay, if we keep using fossil fuels for our feedstock, can we actually figure out a way to get basically a hundred percent yield from our feedstock so that 100% of the carbon that starts out in the fossil fuel ends up in the product.

That's a thing we don't know how to do yet.

Is that a thing we could do?

If that's not a thing we can do, then we're gonna have to capture some of that carbon.

Or we're gonna have to take the carbon from someplace that's not a fossil fuel.

- Right.

- And our options there are basically two, and they're both extremely expensive.

[Scott] Okay.

- Option one is we can take it from biomass.

[Scott] Right.

- And option two is that we can take it from carbon that we've already used.

- Right.

- Which can be either trash or climate trash, which is to say we can try and collect some carbon from the atmosphere and use that.

- Yeah.

- It certainly can be done theoretically.

Let's just say that -- [Scott] It's expensive.

- it is expensive in dollars, and it is extremely expensive in energy.

- Yeah.

Well, and the point on that is sort of to go back to there are some things that we know we can lower the costs on, we know we can do them better, we know that we can make them less expensive.

But in many of these processes, we're talking about the laws of thermodynamics.

They, by their nature, take a lot of energy and there's nothing we can do about that.

And then another challenge with using carbohydrates from crops or whatever is that we've got a lot of different uses for those.

You know, we've talked about the need for them for food and our use of fertilizer, we've talked about building materials.

We don't wanna use all our land use industrially.

And so I understand our need to get away from fossil fuels and especially using fossil fuels as fuels.

But I personally think they're gonna be with us for a very long time.

- And it's not all bad.

- As raw materials.

- Right.

Would you agree or not agree, or too simple, that these things aren't all created equal?

You know, bio, coal, oil, natural gas.

If we can get toward this end of the thing, aren't we better off than this end?

- My standard is always how much greenhouse gas ends up in the atmosphere.

From that perspective, coal is certainly worse than methane, but methane's still pretty bad, particularly 'cause methane is itself a greenhouse gas.

And you are entirely correct, that from an energy density perspective, biomass is far inferior to oil and gas, but it has the advantage that it is not carbon that we dug out of the ground and added to the climate system.

The hard line for me is that we need to get to a place pretty quickly where there's no additional greenhouse gases being added to the atmosphere.

- Right.

Okay.

- In terms of carbon, you have to think about it in terms of timing.

And when you think about biofuels, that carbon was taken up by the plant recently and it will be released within our lifetimes.

- Yeah.

- When we reach back into time for those ancient plants that were stored underground, we're getting out of today's carbon cycle and putting new carbon into the atmosphere.

So we wanna get away from that.

But with all these solutions, there's really not a free lunch.

[Scott] Right.

- And land use, I think, is one of the really important places where the rubber meets the road.

Biomass is attractive because we're working within today's carbon cycle.

- Yeah.

- But the trick is, is when you start using a lot of biomass for different things, you get to the point where we don't have the land to do it.

- Right.

- And so that's why I start thinking about things like renewable electricity, where we're staying within today's sunlight cycle to generate electricity.

Things like carbon capture and storage when we have to use fossil carbon but we can prevent it from going into the atmosphere and try to find ways to stay within our carbon budget, but also stay within the budgets for other things, especially land use.

- Interesting.

You know, this has been fantastic dialogue.

I want to give you both a chance to just, you know, final thoughts, next steps that you see?

- I would say that the industrial sector broadly considered, this is responsible for a third of greenhouse gas emissions.

It's the largest single source of greenhouse gas emissions on Earth.

But we don't talk about it that much.

Where does it come from?

How do we make it?

How can we do that better?

How can we do that in a way that not only doesn't it harm the climate, but doesn't harm the air, the land, the water, that's healthier for everybody.

I just hope that the audience of this conversation will take some time and reflect on, where does all of the stuff around me come from and are there better places, are there better ways that we can do that?

- And can we use less stuff, especially in the U.S., we're so used to using stuff.

That would have such a positive effect on everything we've talked about today.

- Absolutely.

It's a good news, bad news situation.

It's always bad news to be clueless, but the good news is that it means that there's a lot of really easy ways to improve because we haven't even been trying.

[group laughing] - Samantha, final thoughts from you?

- Sure, I think I'd like to come out with something that's somewhat optimistic.

And so we've a lot about the challenges of these industries, the fact that they're low margin, the fact that they're very competitive, but we also keep bringing out the fact that making changes wouldn't add that much to the cost of a final product.

That's a really good argument for policy to move in the right direction.

What I hear from all this is that we can afford to do this, we just have to want to.

- Yeah, that's a neat thought.

I think we do, in my opinion, I think we do young people a disservice almost in that we have to realize the complexities and then we will solve them.

Young people are smart.

- Yeah.

- They've gotta understand the relationships that go across all these.

So I really appreciate that from you.

Well, thank you both.

- Thank you very much.

- I've learned a tremendous amount.

[Samantha] Oh, my pleasure.

- I just ran outta ink scribbling here.

But this has been a wonderful discussion on how to decarbonize industry.

Scott Tinker for "Energy Switch."

Fertilizer is made from ammonia, which is made from natural gas, coal, or oil.

We use those fuels for their hydrogen, but that releases their carbon as CO2.

The first solution is to use fertilizer more efficiently.

Over-fertilizing has many negative local environmental impacts.

So carefully fertilizing has many benefits.

As with cement, we could use hydrogen to produce the ammonia for fertilizer, with the same caveat that all affordable hydrogen production today emits CO2.

As does petrochemical production.

When we burn fuels for heat and process their carbon into products like plastic.

Alternative sources of heat and or carbon like biomass or atmospheric CO2 might be feasible but are prohibitively expensive.

Overall, the entire industrial sector creates one-third of global greenhouse gas emissions.

Efficiency, fuel switching, and innovation can make a real difference here.

♪ ♪ ♪ [Narrator] Funding for "Energy Switch" was provided in part by The University of Texas at Austin, leading research in energy and the environment for a better tomorrow.

What starts here changes the world.