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If we look at a TEA and we assume there's 50 kilowatt hours per kilogram of hydrogen that goes into that electrolyzer, and we assume even two cents a kilowatt hour for electricity, you're looking somewhere at the energy cost of about 26 kilo of ammonia. And so that's already a pretty large allocation to your final budget. And so that really highlights why capital costs then would be incredibly important.
This week, we dive deep into the techno-economic analysis that underpins how to produce green ammonia and synthetic methane.
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I'm Shail Khan. I invest in revolutionary climate technologies and energy impact partners. Welcome. Okay, so a while back, we did an episode which we actually recently replayed, so you might have heard it recently, where I brought on two of my colleagues from EIP, Dr. Greg Teal and Dr. Melissa Ball. And we were talking about techno-economic analysis. And in that one, it was sort of a broad, here's how to do
T.E.A. right and wrong for new climate technologies. It was a big hit. We've heard from many of you about it and continue to. So we thought we would do a follow on it. In this case, doing a deep dive, techno-economic breakdown,
of a couple of technologies or technology pathways, I should say, that we've been hearing about a lot. In this case, talking about how to produce ammonia without emissions, and particularly the pathway of what people call green ammonia, and then how to produce methane without emissions, or in this case, synthetic methane, e-methane, people call it different things. Both of these have lots of different shots on goal right now. There are startups and incumbents who are working on different ways to do
each of these things, but they're both challenging from a economic perspective. We at AP have not made an investment yet in either of these categories directly. You'll hear a little bit more about why it's challenging from a techno-economic standpoint.
Never say never. Something revolutionary could come along. And so part of what we wanted to do here is talk about what drives the technoeconomics in both cases and then what would have to be true for something to truly revolutionize the cost of production of either green ammonia or e-methane. What would a revolutionary technology have to look like?
So this is an area where we and Greg and Mel in particular have gone quite deep. So we thought we would share it with you. So with no further ado, back on the pod, Dr. Greg Teal, Dr. Melissa Ball. Greg, Mel, welcome back. Thank you, Shell. Good to be back. Glad to be here.
All right, excited to do a deep dive techno-economic breakdown of a couple of technologies that we hear about a fair bit these days. One being green ammonia or e-ammonia, depending on what you want to call it, and the other being emethane. We flipped a coin ahead of time and picked ammonia to start, so we're going to start there.
I think there's this podcast probably understand what ammonia is, but just to recap, we use it for fertilizer production and explosives actually today. It's a huge source of global greenhouse gas emissions already. And so decarbonizing it in and of itself has its own value, but also then people are excited to use it for a bunch of other things. Probably most notably is a potential shipping fuel in battle between ammonia and methanol there, but also in some parts of Asia, people are talking about
firing power plants with ammonia using it as an energy carrier so there's been lots of activity in ammonia world. I also think probably listeners here at least familiar with the term haber Bosch and the fact that you know it's a Nobel prize winning century old technology to produce ammonia.
But let's start by describing in a little bit more detail what the Haber-Boch process actually is, and then we can talk about what would change if you're going to make green ammonia. So Mel, I'll hand it to you to kick us off here. Just like walk us through the process, the incumbent process today to produce ammonia.
Yeah, sure. You know, as you said, it's a century-old process. It really is fundamentally needs two inputs. So it needs a hydrogen source and a nitrogen source that are then fed into the, we would call the ammonia synthesis reactor. This reactor operates at pretty high temperature today, 400 to 500 C, and at high pressure, around 100 to 200 bar.
And so where we get that nitrogen and hydrogen is really important. So nitrogen, we get that from the air. So an air separation unit essentially can separate out the nitrogen from mainly oxygen. And then crucially, the hydrogen is, I would say, where this is an important part is that today, about 75% of the hydrogen that feeds the ammonia loop comes from a process called steam methane reforming.
And so this takes methane and steam, reacts at high temperature and moderate pressure to produce carbon monoxide and hydrogen, which then can be followed by a water gas shift reaction that can take that carbon monoxide and then essentially convert it to more hydrogen and also produce some CO2.
And so that's really the motivation for these other pathways is that the steam that they're reforming and the hydrogen production is responsible for around like 80% of the GHG emissions that come from ammonia because of this process.
Right, okay, so the way you produce ammonia today is, first of all, you get the nitrogen from the air using an air separation unit. Then you get the hydrogen, generally from natural gas, today using steam methane reforming. You combine those two an ammonia synthesis reactor that gets you your ammonia at the end of the day. Okay, so maybe Greg will hand it to you in a world where we want to decarbonize ammonia production, but not fundamentally change the process. What does, quote, green ammonia look like?
Well, I think Mel alluded to it pretty clearly in the last few minutes here. The basic thing you have to do is replace that hydrogen input that goes into your ammonia synthesis from something that is carbon-intensive to something that really doesn't use or create any carbon emissions. Green ammonia is
typically refers to ammonia where the hydrogen comes from green hydrogen or electrolysis. You can imagine other ways of getting hydrogen without CO2 emissions as well, including if you sequestered the CO2 from the sea methane reforming process, in which case sometimes that's called blue ammonia. I guess the first point in the ammonia world is there's this simple theoretical solution which is just replace the hydrogen with clean hydrogen.
Is there anything else that you would need to do to change the ammonia production process if you are in the hydrogen is hydrogen so you're not changing anything there, but it does potentially introduce some other changes particularly using green hydrogen hydrogen produce via electrolysis and you don't want to be operating that thing 24 seven because.
As it stands right now, Hebrew Bosch systems are operating 24-7. And so that means steam methane reformers are operating 24-7, which means you don't have to buffer the hydrogen very much, right? So I guess one question is in the world where you just wanted to replace the hydrogen source and say you were gonna be operating an electrolyzer at something less than 100% capacity. And so you did need to buffer that hydrogen
From a techno-economic standpoint, how big a deal is that? How expensive would that be? Is it enough of a problem that it necessitates introducing entirely new technologies to replace Haber-Bosh?
Yeah, that's a good question, Jill. High level, I think it would be pretty impactful to the levelized cost of ammonia if we need to account for hydrogen storage on site in order to feed the ammonia synthesis loop continuously. So if we take data from a couple of sources, the levelized cost of hydrogen storage ranges from somewhere between 30 cents a kilo hydrogen to about about 20 a kilo hydrogen for compressed gas.
So we put this in an ammonia basis. This is about $0.05 to $0.20 a kilo ammonia in hydrogen storage cost alone that accrues to the LCOA. And this is a pretty big chunk of your cost stock. And if we keep that same high-level target, the long-term average selling price of ammonia in the US between $5 to $600 a ton, you can see that this quickly can make a big impact.
I'm sure we're going to talk about this later, but one of the key drivers of decentralized ammonia production is to eliminate or reduce the transportation cost between where you produce ammonia and where you use ammonia. But if we need to buffer hydrogen, the value in reducing this transportation cost is perhaps eclipsed somewhat by hydrogen storage cost.
and really points to either trying to develop ammonia synthesis reactors that can ramp with renewables or looking at other technologies like batteries, but those will also have their own cost drivers. Well, that's a good segue to the other key point here, which is let's break down the
cost stack of ammonia production, because I think the question here ultimately is, can you produce ammonia without emissions cost competitively? So as it stands today, and then if you were to just swap out the hydrogen source, like how much of the total levelized cost of ammonia comes from the CapEx and within the CapEx, like what are the big drivers there and how much of it comes from the OpEx,
which is predominantly energy cost, I presume.
Right. Let's actually start on the OpEx part because I think that essentially gives a floor to the cost. And I think keeping in mind that $500 to $600 a ton target, if that's we're trying to produce at the same, well, we want to produce much lower in order to be able to sell at that cost target. And so if we think about the hydrogen piece and think about the OpEx and you're right, it is predominantly from the energy cost.
then we have to think about what it would take in order to achieve a electricity consumption and cost that would feed into the ammonia price that would make it relatively cost competitive. And really, that comes down to electricity cost. And so we see this a lot in TEAs, and there's good reason. The thermodynamics of water electrolysis are what they are. We can't do better than the thermodynamics. And so in order to achieve an op-ex cost from energy,
that doesn't consume too much of your budget. So we think, again, of that budget being much less than the $500 to $600 a ton, if you want to be cost competitive, we really need to be operating our electrolyzers with energy consumption that is nearing the thermodynamic potential or thermodynamic limit for hydrogen.
And so if we do that and we just have an assumption of where those costs are today. So if we look at a TEA and we assume there's 50 kilowatt hours per kilogram of hydrogen that goes into that electrolyzer, and we assume something of even two cents,
a kilowatt hour for electricity, you're already from the hydrogen piece alone. You're looking somewhere at the energy cost of about 26 kilo of ammonia. And so that's already a pretty large allocation to your final budget. And so that really highlights why capital costs then would be incredibly important.
That doesn't sound that high to me. All things equal, $26 per kilo, where you're going to have a total selling cost of ammonia of $4 to $500. Oh, per ton. There it is. It's actually $25, $2,600 per ton of hydrogen energy costs alone.
So in the example I just gave, if you were saying two cents for energy cost, and we were saying it's 50 kilowatt hours per kilogram of hydrogen input, that's about 20 cents a kilo of ammonia or $210 per ton. So almost half your budget, if we're just saying that budget is the selling cost of ammonia. Right. So under those conditions, which is cheap electricity, now 50
kilowatt hours per kilogram of hydrogen, they're electrolyzers that can beat that, but not by a ton. But with cheap electricity, so fairly aggressive assumptions there. You're spending half of your total budget, including all capex that's amortized and all the rest of the op-ex on just the electricity going into producing the hydrogen, which speaks to why it's such a challenge to get cost-competitive green hydrogen with.
with a traditional paper Bosch system. I guess the other question then is there are a bunch of companies we've talked to and many others out there, I'm sure, that are introducing novel ammonia synthesis processes to replace paper Bosch. And generally they're doing so saying, okay, this is a better solution for green ammonia production for one reason or another.
I guess the first question is why? What's the premise on which you could imagine doing better than this century old technology that seems to work very well? Is it just generally that we can do better or is it that we can do better specifically if we want to pair with electrolysis to produce the hydrogen?
Yeah, that's a good question. I think on the new technical pathways that we're seeing, the one that we were talking a lot about is like if you think about air or nitrogen and your hydrogen as the input into these new reactors, we've seen a lot of different reactor types, so electrochemical, photochemical, thermochemical. And while they're all early, probably the most advanced we've seen is the thermochemical approach of this decentralized thermochemical processes to produce ammonia.
some are actually just scaling down typical Haber Bosch, i.e. just still having high temperature, high pressure. And then others on the new novel reactor design, what they're working on is having lower temperature, lower pressure Haber Bosch or ammonia synthesis loop reactors. And so there's a couple of reasons why. And one is really the pairing with renewables. So we mentioned earlier that you need to be able
If you want to have a green ammonia, you need to have green electrons. In order to pair with renewables, if you're a lower temperature pressure reactor, when the sun is shining or the wind is blowing, you could potentially ramp down your reactor and so you could follow the renewable cycle.
And then the other more TEA reason why people are working on this type of technology, this lower temperature pressure reactors, really from a just first principles perspective, you potentially can have capital and operating costs advantages by not operating at such high pressures and temperatures.
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Okay, so you mentioned decentralization, which is the other thread we should pull here a little bit. Greg, you're our scaling guru. I mean, so the reason why it's interesting, in principle, to scale down, hyperbosh reactors are huge, I should say, today, right? Like there's like 300 some of them in the world, which is crazy because they produce all the ammonia for all the fertilizer in the entire universe. They're massive, massive plants.
they clearly, you know, the trend has not been to scale down. The result of that, of course, is that then we ship ammonia all over the world and there's a pretty big supply chain and it's not cheap. And so the difference between the produced factory gate cost of ammonia and the delivered price to the farmer is large because of all this supply chain in between all the transportation costs and the fact that ammonia is not easy to transport, right? It's corrosive and
dangerous and so it requires special handling. So a lot, I think of what we've seen is people who are saying, okay, well, if you could decentralize it, if you could economically produce it at small scale, then you can cut out a lot of that supply chain. And importantly, the concept of economically producing at small scale, you know, the argument that these companies make is that you, you don't need to compete with the levelized cost of ammonia coming off of a traditional Haber-Bash reactor. You need to compete a little bit closer to the delivered price.
that a farmer is seeing. Now we can debate whether that's real or not, but it relaxes the cost constraint a little bit. So the idea is make these things small. But the question is, can you make them small in any reasonable economic fashion? So Greg, as we talk about the different components of the ammonia synthesis process,
What do you think has the potential to scale down and what is really challenging to scale down? So the classic chemical engineering way to think about this is something called the six-tenths rule. And the six-tenths rule is essentially a rule that reflects economies of scale that are inherent to many different types of chemical processes and related.
And basically what it says is the bigger you make your plant, the bigger the capacity of the plant or piece of equipment is, the cheaper it becomes on a unit basis. Mathematically, the rule has stated something like this. The ratio of the cost of some equipment or process at two different scales or two different capacities is equal to the ratio of those capacities, some measure of capacity, raised to the 0.6 power.
the size of your equipment, the capacity of your equipment, doubles or 10Xs, the cost doesn't double or 10X, it goes up by 2 to the 0.6 or 10 to the 0.6, right? And sometimes that value is in 0.6, sometimes it's a little bit less, sometimes it's a little bit
more, but this is an effect that is seen across many, many types of processes and pieces of equipment for various reasons, and there's really just an enormous amount of historical data and examples showing this type of relationship again, again, and again.
And so, if you're trying to scale down, you're working against this six-tenth rule, right? You're getting this six-tenth rule in reverse. Half the capacity isn't half the cost, and tenth of the capacity isn't a tenth of the cost, it's worse than that, right?
But a lot of people will point to something like a electrolysis that's a little bit more modular, at least the core cells and stacks and so forth, as something that maybe shouldn't have so much of that economies of scale effect. So at the end of the day, if you're trying to scale down a green Haber-Bosh plant,
Maybe you'll be able to do okay on the core parts of the electrolysis side of the equation here, the cells and stuff and so forth. But the ammonia synthesis loop and the other kind of more conventional chemical engineering type pieces of equipment, those bits will be tougher. What about the air separation unit? It's like the forgotten part of this
system often I find, it's sort of assumed, okay, so you got to get the nitrogen, so you're going to do an ASU. But as we've talked about before in a bunch of different contexts, ASUs are not things that scale down supereconomically either, right? Yep, great point. You can get them at many, many different scales from small to world scale, and you see some big economies of scale effects there, so hard to scale down.
Yeah. Okay, so I want to move on to Emethane in a second, but before we do, I guess that here's the question at the end of the day. What would it take? What would have a new production process of one kind or another have to look like in order to
change the world here. What would be revolutionary enough that you can imagine getting green ammonia, clean ammonia at commodity gray ammonia prices? Is it as simple as really, really cheap clean hydrogen? It may be just that simple, but is there anything else that you can imagine would be a game changer here?
Now, I've thought a lot about this question and really trying to think about one miracle that would make this happen. And I think where I am at is that, yes, I think the hydrogen is certainly a huge part of the levelized cost, I think, from my CapEx and also from an energy perspective. So I think you need both cheap energy and you need cheap CapEx.
I think also what we were just saying about the nitrogen generation unit, if we're going to have these decentralized smaller productions, the nitrogen generation is a sensitivity at small scale. And so if you said with like one big miracle, one thing I was thinking about was if you could have a air as your input as opposed to actually eliminating the nitrogen generation completely, that coupled with
The cheap electrons and also the cheap capex for the hydrogen electrolyzer could be game changer for ammonia.
Let's move on to e-methane. The idea here is to produce synthetic methane. That has obvious massive benefits if you could do it economically and with low embodied emissions because we've got all of this infrastructure in the world that we have built up for natural gas.
You know, if you could just use that infrastructure without making any changes whatsoever, you produce the same molecule, you ship it around, you use it and all the same end uses like you've solved so many of the problems that all.
zero carbon alternatives and low carbon alternatives to things like natural gas face. So wouldn't it be amazing if we could do that? And in principle, we can do that, right? Methane is CH4. It's a carbon in four hydrogens. All we need is a source of carbon that is not dug up from underground. And then we need a source of clean hydrogen. We put them together somehow, which you're about to tell me how.
and we get our methane. So it feels really attractive. And indeed, there's a bunch of folks working on it. I think our question is, what would that production process really have to look like? And this is where the TEA comes into play in a significant fashion. So first, Greg, walk me through, how do you get synthetic methane?
Right. So, you know, kind of like a robust, the reactions here, the core reaction, the core chemistry has been known for over a century. And the basic way that it works is you, if you want to make it from CO2 at least, you start with CO2 and you add about four molecules of hydrogen for one molecule of CO2 and you make one molecule of methane, a bunch of water, which is, say, two molecules of water and a bunch of heat.
And so from a whole whole of process perspective here, right, you need to get a source of CO2, which might come from some industrial source. It might come from a biogenic source. It might come from the air. And you have to go through some CO2 capture process to get that to be pure CO2. And then you want to get your hydrogen, which in this emissane case would be coming from electrolysis.
And so you take water and split that into hydrogen and oxygen. Again, combine those two and that kind of forward to one ratio and you get your methane, your water and a lot of heat. And like you said, the upside is really attractive if you could get all this to work out because you've got that huge transportation distribution network and storage too, right? I mean, the largest source by far of energy storage that we have today is in the form of gas storage.
Yeah, so super attractive. And if you could do it economically, of course. And actually, from a technical standpoint, my understanding is the synthesis process is known and commercial already, basically, right? Yeah, that's right. I mean, you get pretty good conversion, which is to say you can convert pretty much all of your CO2 into missing.
you get great selectivity, which is to say all of your carbon from your CO2 goes to methane, not to some other thing that you don't necessarily want. The reactor conditions are pretty mild, hundreds of sea and reasonable pressures. In fact, this kind of messonation process, as you said, is used today, albeit with slightly different feedstocks in colder gas processes.
colder gas processes where you know maybe in areas of the world that don't have natural gas but need it but have large coal supplies. Sounds great. What's the catch? The catch is the economics and
The biggest catch of all of the catches in the economics is the hydrogen. If you stack up the costs for making methane according to the reactions that we just talked through, in the best case, you need something like half a kilo of hydrogen per kilo of methane.
And so if we looked at a wonderful version of the future where we get to the kind of magic $1 per kilogram hydrogen mark that is on the DOE's roadmap and many others, just that hydrogen cost alone would be equal to $10 per MMBTU of gas.
And so compare that, at least, again, in the US context to something like the Henry Hub price, which in the last 10 years has been as low as the buck and a half per MMBTU and has spiked higher and gotten close to $10 per MMBTU. But still, nominally in this kind of $2 to $4 or $5 per MMBTU range, just the hydrogen alone is doubling to 5xing that bench.
benchmark and that's with dollar per kilogram hydrogen, which is, which is a long term goal, but, uh, but, you know, we're nowhere near that today in terms of clean hydrogen. So like, what would it look like if it was even two dollars per kilogram hydrogen, then it's $20 per MBT, right? I assume it's linear.
in that way. And so now, you know, immediate, and that's, again, that's just the input cost of the hydrogen, not to mention the input cost of the CO2, the CapEx that you have to amortize. I mean, speaking of which though, input cost is CO2. How much does that matter? Because you can imagine a wide range of costs there. You could do, as you said, you can get it from point source. So say you're doing point source capture from an industrial facility or something, and maybe you, you know, cite it there and you get your CO2 input for
I don't know, $50 a ton or something like that. Or on the other end of the spectrum, you could imagine you're doing direct air capture at today's direct air capture costs and you're paying $1,000 a ton or at least high hundreds of dollars a ton. Do those move the needle as much as a hydrogen or not as much?
Not as much, but like you say, there's a wide array of sources that you could get this CO2 from. And of course, from a carbon accounting perspective, where you get your CO2 matters. But back to the kind of economic picture here, the again, sort of best case from the chemistry is something like 2.75 kilograms of CO2 per kilogram of methane. So thinking back on an MMB2U basis, if you wanna get the good sort of
CO2 from the air, and we hit all our hopes and targets of getting to that magic $100 per tonne of CO2 number. Best case scenario, perfect yields, $100 a tonne CO2, that's six bucks in MMBTU. So again, even the CO2 by itself.
is blowing your budget. So it's tough. So I guess the question again here then. So you can imagine how like with any reasonable set of assumptions with today's cost of hydrogen and today's cost of CO2 or even the next few years costs of both.
You know, it's hard to picture producing synthetic methane. Again, we haven't even talked about the CapEx here, but it's hard to imagine producing synthetic methane below something in the 20s of dollars per MMBTU, perhaps 30s of dollars per MMBTU. That's obviously like way, way higher than
then Henry had prices for natural gas generally. It's not necessarily that much higher than RNG prices, though, which is an interesting thing. Renewable natural gas, we've talked about it before on this podcast a while ago. It's a weird market. It's not a tiny market. It's actually been pretty
attractive, there's been a bunch of M&A in that space and so on. There's some incentives that drive that. But you do see selling prices for RNG, at least some types of RNG, really low CO2 embedded RNG that are in those $20 per M&B2 type of range. I think you can squint and find a market for synthetic methane.
in that price range, but obviously the promised land of like making a big difference on a global basis, I think requires something substantially better. And so the question is, what if anything can you do to drive better economics for synthetic methane production? And again, does it come down to like in this case,
super duper cheap hydrogen super duper cheap co2 yeah well i think you know one thing we haven't talked about a little bit here is is is the efficiency of this process i mentioned that you know the the the the core reaction produces a lot of heat right and so if you were to you know make one of these plants today with a
with a good electrolyzer, we mentioned this kind of 50 kilowatt hours per kilogram of hydrogen type energy consumption for the electrolyzer. If you use something like that and did this kind of fairly standard machination process, the total efficiency of the process kind of comes in around 50% ballpark. And about half of those losses of the 50% of the energy that you lose are in the electrolysis. And about half is in the machination step.
because that machination reaction, like I said, makes a lot of heat, right? And so, you know, there's a hint in that thermodynamics that tells you, well, maybe, you know, maybe there's something we can do here, right? And so, you know, to get back to your question, how do you get around this? Yeah, the first thing, first and foremost, is truly low-cost CO2 and hydrogen, you know, slash electricity, maybe that's geologic hydrogen, maybe it's
high-purity point source biogenic CO2. Maybe it's doing biogas upgrading where you have the CO2 and the methane right there in a mix for you. But the other thing you can do here is
go hard after the efficiency, right? And so can you find ways to do and folks are doing this? Really, really tight heat recovery. Use high temperature electrolyzers that maybe can use some of the heat that you give off in that machination step. Push the efficiency of the electrolyzers higher and really find a way to integrate those processes very, very tightly so you can use all of the heat inside the system. But at the end of the day,
I mean, is all that stuff kind of marginal compared to just the thermodynamics you're describing before of your input cost of hydrogen and CO2 is going to make it such that unless you have a market that can stomach a price of synthetic methane in the
high teens or 20s of dollars per MBTU, you just can't beat that, basically. It's really hard, right? If you're going to try to do kind of run-of-the-mill, destination, power to gas, high capacity factor, no special scenarios, no special markets, no edge cases, yeah, it's really hard. And so I think, again, that challenge kind of comes down to finding these cases where you can push the envelope a little bit.
One other thing that comes to mind here is flexible or really, really cheap capex that allows you to minimize the penalty of intermittent operation. If we know that dollar a kilogram hydrogen doesn't work and two-cent electricity is not enough, can we find scenarios where we have, and folks are doing this as well, machines that can do more than one thing and take advantage of short periods of
very low zero negatively priced electricity and make some methane out of it and get something out of that. But the rest of the time do something else with the CapEx, right? So you're looking for those kind of scenarios. But again, if you, like you say, if you're doing these really run-of-the-mill methaneation high up time, just make power to gas. Boy, the thermodynamics make it tough.
All right, so having spent all of this time on the techno economics of both ammonia production and synthetic methane production, I guess I'm curious for each of you what your key takeaways are at this point and kind of general outlook on both of these spaces. Mel, maybe I'll go to you first.
Yeah, sure. I think when we started looking at ammonia and doing our own research or our own techno-economic modeling, I think one of the surprises was really how much transportation was a part of the levelized cost and the contribution from transportation. So I know we talked about earlier the different modes of transport of ammonia. We do it today. There's many in whether it's the United States has a
a very large 2,000-mile pipeline that runs straight from Louisiana all the way to the Corn Belt. And I think from our analysis, what we realize is that, again, that $500 to $600 a ton selling price, about maybe 20%, 25% of that is transportation. So there is some budget even within the US.
for these decentralized approaches. I would say that's essentially whatever technology that they are developing, that would be your, your allowed in budget for, you know, if you're sizing down your, your capex in terms of, again, those economies of scale losses and then thinking about that in the context of that, of that 25% of potentially eliminated transportation costs. I think that was a really
big takeaway for myself. And then also outside the United States, a lot of what we said for ammonia certainly can be different because for Haberobaj, the main sensitivity is natural gas prices, so where natural gas prices are expensive, that will have a effect on the ammonia price. And then also, it's not distribution across the world can also be much more expensive.
And so I think that transportation cost is certainly one that I, as a value prop for decentralization, it makes sense. But still with the, what we've talked about earlier, the hydrogen piece, it is really, and then I think cheap electrons, those two really are, they're going to be part of the solution or part of the unlock for green ammonia.
And then we also mentioned, also, I think if you could design a reactor that potentially could handle oxygen. And from either catalytic perspective, this is where oxygen can be a concern. So, cattle styling or corrosion in your sin loop, I think that that could also potentially have an effect or a positive effect on these more decentralized alternative approaches to Haber-Bosch.
All right, Greg, your key takeaways. If you want to make a synthetic fuel, if it's going to be a hydrocarbon, you do need a source of carbon and the source of that CO2, carbon CO2 matters from a carbon economic perspective. But from a cost perspective, the thing that matters is number one, the hydrogen, number two, the hydrogen, and number three, the hydrogen.
All right, that's a good takeaway. Let's find a way to make super cheap, super clean hydrogen. Some other things may fall into place, maybe insufficient in other places, but it sure would be a good unlock for some of this stuff. Dragonmell, thank you so much for coming back on and doing this deep dive with me. Thanks for having us. Thanks for having us.
Greg Teal is the Managing Director of Technology, and Melissa Ball is the Associate Director of Technology, both at EIP with me. This show is a production of Latitude Media. You can head over to LatitudeMedia.com for links to today's topics. Latitude is supported by Prelude Ventures. Prelude backs visionaries accelerating climate innovation that will reshape the global economy for the betterment of people and planet. Learn more at PreludeVentures.com.
This episode was produced by Daniel Waldorf, mixing by Roy Campanella and Sean Marquan, deemed song by Sean Marquan. I'm Shale Khan, and this is Catalyst.
