Does the United States have the technology to meet national clean energy goals? During today's OnPoint, Hunt Ramsbottom, CEO of Rentech, explains how the United States can meet an 80 percent clean energy standard. He discusses his company's work in the fuels sector and explains why he believes government incentives are critical to the advancement of clean energy in the United States.
Monica Trauzzi: Hello and welcome to OnPoint. I'm Monica Trauzzi. With me today is Hunt Ramsbottom, CEO of Rentech. Hunt, thanks for coming on the show.
Hunt Ramsbottom: Thanks for having me.
Monica Trauzzi: Hunt, in his State of the Union address the president called for an 80 percent clean energy standard by 2035. Rentech is directly involved in the development of clean energy technologies. It is an 80 percent target feasible based on where you see the technology today?
Hunt Ramsbottom: I believe it is. You know, from our perspective at least, our technology is ready to go today and I think these bold statements are important. You know, much like, you know, getting to the moon years ago. And I think that -- I think an 80 percent is real if you look at wind, solar, and what we can do in biomass to power, now this is power only he's talking about, which I think is important. Because you look at the United States, you've got these pockets of incentives in states like California where you have renewable power rates to incentivize companies like ourselves, which is why we're building a project out there. But you can't grow a company consistently across the country if you've got, you know, half the states that have a situation that incentivize you and the other half of the states don't incentivize you. A great example would be the Southeast United States for what we do. The Southeast has a tremendous amount of wood available because the paper industry and pulp industry is decimated because we're all using different electronic things for reading these days and housing is down. So that industry needs to put their wood baskets to use. Well, we can utilize those wood baskets for power, but if you don't have renewable power rates in those states, we can't invest in those states. So, in the short term, to have a national standard on renewable power rates would allow companies like ours to do a national rollout. The same with wind and solar. So it's very difficult to have states I think that don't allow this and states that do. So having a national policy and move forward like that would be, in my view, would really get things moving.
Monica Trauzzi: It seems the definition of clean energy can vary. How would you define it? What technologies do you think fall under the clean energy umbrella?
Hunt Ramsbottom: From our perspective, again, certainly wind, solar, our biomass to power allows us to -- I actually believe natural gas, you know, is a clean -- everybody's talking about natural gas today. We've, as everybody knows, we've found an abundance of natural gas in this country. What's discouraging about that is I was reading yesterday in the plane that they're talking about exporting our natural gas. We have existing technologies here today, like ours. We can turn that natural gas into jet fuel and diesel fuel. So keep it here and turn that to ____. So I would say natural gas is a great transition fuel to the future. Actually, you know, when they've talked about clean coal, you can do coal cleanly if you sequester the CO2 and add a biomass component and make fuels from it. So, it depends on your definition of clean technologies. If you want a zero carbon footprint, that's a very difficult thing to do and you can do that. But if you want to create fuels that are cleaner than the barrel that you replace, there's a lot of technologies that can do that. So, it's a broad portfolio today. And I think there's a tremendous amount of technologies that exist today that allow us to move forward. My worry, quite honestly, is we keep chasing the next new thing as a country. We talked about this yesterday on a panel I was on here in Washington. Even with a lot of the Ford Motor Company, BMW, they're all there on the panel with me and everybody said we're all in agreement that lets work on clean technologies that exist today, that can go in existing infrastructure, we can put in our tanks, our pipelines and get moving. What I worry about is we're investing for something that may be 15 or 20 years down the road. The technologies exist today for a clean energy future in America.
Monica Trauzzi: Do you believe that Congress can put partisanship aside and come to an agreement on clean energy?
Hunt Ramsbottom: I do and we're seeing that. I mean, I think it's so important for this country and I think they all realize that. The investment dollars that need to go into clean energy, whether you call it clean energy or just a new energy future for our country, CO2 emissions have to be a part of it. But the important part of this factor is that, you know, we're losing about 5 to 6 percent of crude production annually worldwide. So it's not a choice.
Monica Trauzzi: So, let's talk more about Rentech, what Rentech is doing, the different technologies that you're working on specifically in the fuel sector.
Hunt Ramsbottom: Right.
Monica Trauzzi: You work on converting various feedstocks into fuels. Talk a bit about that.
Hunt Ramsbottom: Yeah, so our technology allows us to take any carbon bearing resource and turn it into our products, our biomass to power, jet fuel and clean diesel. We just recently drove a clean diesel Audi car across the country with our fuels. Only five stops across the country. It's here now at the auto show. We have a project in California, very unique, first of a kind in the world where we are taking woody green waste, which is your yard clippings and tree clippings, about 1000 dry tons a day, and we're converting that to low-carbon to zero-carbon plant diesel fuel for California and renewable power to the grid, 35 megawatts export. So our two components coming out of that plant because we're incentivized in California with a low-carbon fuel standard and renewable power. So we have both diesel fuel and power going off that project. So, we can build projects like that around the globe if we're incented to do so. So, our fuels last year were approved for commercial aviation on a 50-50 blend. We flew on an Airbus 319 successfully, which was really a fun day for us. So, those products we can deploy today, now. Our first project is in California.
Monica Trauzzi: So, incentives, that's an overall theme that I'm hearing from you.
Hunt Ramsbottom: Today, yeah.
Monica Trauzzi: How much of what you do is dependent on funding that you get from DOE for example?
Hunt Ramsbottom: Today -- and I think right now we're competitive with crude prices. I know we are competitive with crude price today. The issue that we face is volatility. Remember, two or three years ago we were $140 plus a barrel. Recession hit for two years and it came back down to 60-ish or even 50. At the tail end of the recession it's 70 or 80 and now close to 90, so stability in energy prices, and crude prices are what we need for commercial deployment of capital. So, until we get there is where you need the DOE. We've applied for a DOE loan guarantee on the 1705 program for the California project. So it's important just to get the first projects or two off the ground. Everybody wants to build a second project in Wall Street, but the first project with new technologies, getting them out and deployed, does require a private and public partnership. And, if we can do that successfully, it's been done in Brazil, it's been done in South Africa, it's been done around the globe. If we stick to it here it only has to be in the first one or two projects and then we're off to the races.
Monica Trauzzi: OK, we'll end up there.
Hunt Ramsbottom: OK, thank you.
Monica Trauzzi: Thank you for coming on the show.
Hunt Ramsbottom: Thank you.
Monica Trauzzi: And thanks for watching. We'll see you back here tomorrow.
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