Committee of Chief Risk Officers 8000 Research Forest Dr. info@ccro.org STE 115 #278 http://ccro.org The Woodlands, TX 77380 5 Advancing Our Energy Industry’s Risk &Compliance Best Practices Chris Dann: Yes, there are problems with hydrogen, yet it's going to get an enormous amount of federal money. Hydrogen is not a source of energy, it's a means of storage, right? And as a means of storage, hydrogen is extremely inefficient. So, if the objective is to waste a lot of excess power, you could do that. It might sound silly but, there's some incentive in the act to power an electrolyzer with solar, create hydrogen, and simply release it back to the atmosphere. But without the Federal money, the fundamental economics are just not really there. And as a means of storage, hydrogen is extremely inefficient. CCRO Member: You could change the hydrogen to ammonia, right? Andy Roehr: Although there are people working on ammonia engines especially for Marine, I've seen a couple of those initiatives going on. We know how to tank and transport ammonia, but as those of us who've been around long enough to remember industrial disasters like Bhopal, ammonia is not your friend. It has a lot of health and other issues. Frankly, a lot of it exists in historically underserved communities. So, you will have a real energy justice conversation going on with DOE if that's a strategy. Chris Dann: I think one of the reasons why the bill is so complex and has so many consequences, some unintended and others maybe intended, is that it's not so much energy policy as it is labor policy and industrial policy. A lot of the constituents that were behind the inflation reduction Act were upset to find that most wind and solar projects are built with non-union labor. So put a prevailing wage requirement around it, and you will move all those dollars into labor. Of course, in doing so you're also increasing the cost of wind and solar while pursuing a completely different policy aim. And there’s the domestic content requirement, which is really trying to achieve an industrial policy aim. Neither of these aims have much to do with the fundamentals of energy and how the energy markets work right now. Nobody was really thinking about that apparently. The bill is not so much energy policy as it is labor policy and industrial policy. Andy Roehr: The bill nationally could have some very negative impacts on energy security. If the industrial policy aim doesn't succeed, the vast majority of your wind and solar and other renewables will actually be created by a country that is probably your number one geopolitical opponent. You can go beyond that and ask if you really want to have your renewables sourced from child labor and concentration camps? There are certain issues that people may or may not want to address. We're backing into some much bigger issues while trying to use this as a hammer. I think that's going to create a lot of dysfunction.