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The following transcript has been edited for your reading enjoyment.

Doug Glenn (DG):  Well, we’d like to welcome everybody to a second round of Hydrogen Combustion. We’re going to have a discussion about hydrogen combustion here on Heat Treat Radio which is now really a Heat Treat Radio (and video). We’re welcoming back some of the same folks that talked with us from about one year ago.

I want to do some introductions, reintroductions in most cases, and we’ve got one new participant on the panel this year. So, let’s start with the introductions and then we’re going to jump in. We’ve got about six questions to cover; hopefully we’ll be about 30–45 minutes of discussion on this.

Let’s first introduce John Clarke (if you want to raise your hand just to let everybody know who you are there). This is John Clarke. He is the technical director and owner of Helios Electric Corporation, a Fort Wayne, Indiana-based company that specializes in energy and combustion technologies. John is also a regular columnist for Heat Treat Today, which we appreciate, by the way, and has written 12 articles with our publication in a series called Combustion Corner. So, John, I want to thank you, and welcome.

Next is Justin. Justin is our “newbie” on this one, but not a newbie to the industry — of course! — but to this panel. Justin Dzik from Fives North American Combustion, Inc. is the manager of business development at Fives North America with a special focus in combustion engineering. Justin has written technical articles about Ultra Low NOx combustion technology for the steel industry and is closely involved with spearheading the advent of a thermal process combustion tuning solution that leverages industrial internet of things (IIOT) and Industry 4.0 technology. So, Justin, welcome, glad to have you with us this time.

Next is Jeff Rafter from Selas. Jeff is the VP of sales and marketing for Selas Heat Technology Co., the company being out of Streetsboro, Ohio; Jeff being out of somewhere in the lovely state of Wisconsin. Jeff has a rich history in the combustion industry including many years with Maxon Corporation, 29 years of industry experience in sales, research and development, and marketing, combustion application expertise in process heating, metals, refining and power generation. He also has 11 years of service on the NFPA 86 committee and holds patents for Ultra Low NOx burner design and is an IHEA member, as well.

Next is Perry Stephens. Perry is the principal technical leader for the Electric Power Research Institute (called EPRI) and, among other things, currently leads the End-Use Technical Subcommittee of the Low Carbon Resource Initiative, which is a collaborative effort with GTI Energy, formerly known as Gas Technology Institute and nearly 50 sponsor companies and organizations which is aiming and advancing low carbon fuel pathways on an economywide basis, hopefully towards the achievement of decarbonization. Perry is also an active member of the Industrial Heating Equipment Association (IHEA).

We wanted to bring someone in, as we did last time — Joe Wuenning (Joachim Wuenning) — from Europe. Joe is the president and owner and CEO of WS Thermprocess Technic Gmbh [WS Wärmeprozesstechnik GmbH] in Germany and also WS Thermal Process Technology, Inc., in Elyria, Ohio, here in the States. Joe’s company has been on the cutting edge when it comes to hydrogen combustion, and Joe’s company is also an IHEA member company.

Gentlemen, welcome. Thanks a lot. Let’s just start off.

Jeff Rafter, I’m going to start with you, if you don’t mind. It’s been about a year since we spoke last, so the question is (and I’ll address this to all of you, but I’ll throw this one out to Jeff first): What has changed? In the last 12 months, have we seen any major changes in hydrogen combustion technology application?

Jeff Rafter (JR):  I think I would say, probably, that the dominant change over the last 12 months has just been general interest in momentum. We’re now seeing inquiries and interest from a variety of different industries. A lot of people are preparing for the future and starting to think about decarbonization in a bigger sense, and then watching that interest be amplified by geopolitical events, I think, is obviously a later discussion question that we’ll talk about, but we’re now getting to a place where parts of the world sincerely have more motivations. It’s now not just an environmental protection motivation, but we’re also seeing, really, a need to continue operations as fuel supplies, in some parts of the world, have now become called into question.

DG:  Let’s go to Joe next and then after Joe we’ll jump over to Perry. Joe, what do you think? Any major changes in the last 12 months?

Joe Wuenning (JW):  Of course. Here, we are closer to Ukraine Russian war. Germany is directly, very much dependent on Russian gas and the real fear here for companies is that they have to shut down in the Fall because of gas shortages. So, that intensified, of course, the thinking about the future. One issue which became less important is the price. At the moment, the people think- do we even get gas and don’t think what it costs for it. Before, it was a big discussion if prices would go up by 5% or 10%; now, everybody is happy if they will get it and so, basically, we have no more jobs within Europe where that is not a point of discussion.

What can we do? Some people think about electrifying, of course, but we still produce electricity from gas, so that is not really the solution alone, and we don’t know what the electricity grid will do in the future, so flexibility has become a major player also besides. So, not only hydrogen but can we also go ammonia? Can we do other things? What are the options which keep us independent and doesn’t make us dependent so much on one source as it is now, at the moment?

DG:  Let’s go to Perry and then over to Justin and then, John, we’ll finish up with you. Perry, what do you think — the last 12 months?

Perry Stephens (PS):  I would echo what Jeff said. I think we’re seeing not only sort of a general greater interest but the leadership of Fortune 500 companies which are global in nature and seeing all of these geopolitical situations occur, wanting to think through stabilizing their future energy supplies and understanding that the impacts of climate are beginning to really push down to their suppliers a desire to decarbonize all of their final energy pathways. So, they’re beginning to make inquiries in terms of how they can change over equipment and what needs to be done.

From a technology standpoint, we’re beginning to understand a bit more what elements of hydrogen combustion or blended hydrogen with natural gas, for example, have impacts on what parts of overall systems and what areas may have significant costs or performance impacts for which we may need to do a bit of additional research, so we’re beginning to understand where those impacts may be, as well. I think, finally, we’re beginning to see some results of research that sort of tells us, on an economy-wide basis, the drivers for demand for hydrogen and sort of under various scenarios how much hydrogen might be needed for various economic sectors including the industrial sector.

DG:  Justin, how about you? Now, you weren’t with us a year ago but if you can take your imagination back to about a year ago, what have you seen change on the hydrogen combustion side of things?

Justin Dzik (JD):  Honestly, what we’ve seen is just the growing acceptance across not only just industry but government and society that we need to transition from where we are with natural gas or conventional fuels to lower or zero carbon intensity. So, obviously, depending on where you are in the world, the exact timeline varies, but there is increasing focus on how we get from where we are to where we’ve got to go. Obviously, hydrogen is the purer, noncarbon footprint fuel so that’s obviously the ideal state. We’ve also received an increased amount of inquiries and interest in hydrogen, specifically on combustion equipment, and not only just from industry but from utility companies even here in the states talking about blending fuel and putting hydrogen in the natural gas lines and what effect that has on industry as well as some of the residential implications it might have, going forward, for their users.

DG:  John, how about you?

John Clarke (JC):  I believe we’re kind of living through that old Chinese curse — “May we live in interesting times!” — because we have seen disruptions, both on our energy supplies and our energy costs. In the U.S., we were tracking Henry Hub prices approaching $10 and now, all of a sudden then, we had a fire in pre-port and the price of natural gas fell 30%. But I think the long-term trend (and the trends are being recognized by everybody), is that we are in an international market, not only for oil, but for natural gas, as well. I think we’ve seen the effect really come home.

The other thing that’s going on, too, is the price of gasoline and transportation in the U.S. has skyrocketed and we’re now experiencing the kind of prices that Europe has lived with for years and years and years. I think all these factors, these externalities, are going to drive interest in any alternative. Hydrogen, for combustion, but hydrogen also for fuel cells and for automobiles. We’re kind of entering a period where I think our technological focus needs to be “all of the above” and I think there’s an acceptance throughout industry and industry leaders that that’s the path we have to be on to protect our businesses going forward.

DG:  So, it seems like the consensus, is, from a year ago, the interest — and to a certain extent some of the technologies is advancing, but at least the interest — is very much being advanced. So, it’s becoming more and more of an issue.

Let’s talk specifically and, Perry, I’m going to address this one to you first if you don’t mind: Have we seen in the last 12 months actually any new applications and/or industries that are aggressively adopting it? There is one that pops to my mind that’s been very obvious.

PS:  Probably the one you’re thinking about is the steel industry that has a specific nuance of steel production that huge amounts of fossil fuels, natural gas, cooking coal, are involved in the production of raw steel and so that reduction reaction, hydrogen can serve as a chemical-reducing agent. So, it not only introduces thermal inputs but also serves as a thermochemical-reducing agent to actually remove the oxides from the ore that allow you to liberate pure iron content that eventually becomes steel. Plus, a significant amount of process-related emissions that come from steel production make it a target industry, so they’ve been fairly aggressive, particularly in Europe, with a couple projects where hydrogen is involved. And the fact that, as we grow the use of steel, high-strength steel, and a lot of applications, globally, there will be a need to add new iron units into the system. A lot of steel is now recovered scrap steel that is melted through electric arc furnaces, but we need to add additional iron content. So, direct reduced iron processes are beginning to take a close look at hydrogen as a reducing agent and also for thermal inputs.

Quickly, beyond that, in most industrial settings, there is a lot of mobile equipment, and that mobile equipment uses a variety of diesel, compressed gas, propane and so forth, and those applications have a particularly easily converted to hydrogen type applications because they’re relatively small size and captive space; they compete with electric equipment in that space and so those two technologies will come forward.

"That is a little bit more challenging, but we see no real major problems towards that because, of course, we will not have hydrogen as a cheap fuel tomorrow, but we have to introduce it slowly if we have excess electricity converted to hydrogen and then get into the grid but therefore the burner systems have to be able to handle that — the change in compositions; not only switching but also the change in compositions." - Joe Wuenning, WS Thermal Process Technology

As far as other industries, the petrochemical industry uses a lot of hydrogen — they’re used to it. They’ll continue to look at both liberated hydrogen from process and other sources of hydrogen for their end-product production for process heating as well as inputs into the production of various synthetic fuels and other synthetic products that they make in the petrochemical industry.

So, those are the two — steel and petrochemical — in my view, probably most aggressively looking at hydrogen. Others may have other experience, as well.

DG:  Justin, let’s jump over to you next on that question; then, Joe, we’ll go to you after that. So, Justin, new applications? Is there anything of that sort you’ve seen?

JD:  Yes, absolutely. To echo what Perry said, obviously, the steel industry with their green steel initiative is really pushing forward. From our experience, a lot of interest is coming from the aluminum industry, as well. We play heavily in the aluminum industry, specifically on the melting side, and some major companies are interested in adopting hydrogen firing, especially the ones coming out of Europe and their interest really comes from what happens when you fire hydrogen fuel, and it interacts with the molten bath. There are a lot of material concerns with hydrogen, right? Not just in aluminum, but in titanium firing, as well. Those types of metals tend to have an affinity for hydrogen which could, obviously, have a detrimental effect on the final product. So, really there’s pilot scale tests, full scale tests, all kind of undertaking right now. Obviously, the focus is in Europe but a lot of European companies have plants in the U.S., so we’re seeing a lot of that kind of drift into our territory here and, obviously, being focused out of the European headquarters.

DG:  Joe, how about you?

JW:  We see a lot of projects right now are running now in the last 12 months. We have various customers which told us they want to try out, out of whatever their furnace with a hundred burners, so two of them run with hydrogen and see what happens — see what the emissions are, see what the burner life is, do they have varying parts? That is a part we do with many customers. It’s quite inexpensive to just try and see what happens. And then, we have two big research projects where we can do it in a more thorough manner, together with university, really also not only switch to hydrogen but also to see what happens if we switch back and forth. So, if we have hydrogen coming in, it goes to hydrogen, it should automatically adjust without human interference. That is a little bit more challenging, but we see no real major problems towards that because, of course, we will not have hydrogen as a cheap fuel tomorrow, but we have to introduce it slowly if we have excess electricity converted to hydrogen and then get into the grid but therefore the burner systems have to be able to handle that — the change in compositions; not only switching but also the change in compositions.

On the other hand, we are using hydrogen now in our lab for quite some time and the people in the lab, really, they get more and more used to it. I think they think it’s more and more rather the better fuel than natural gas, cleaner fuel the more they work with it, and I think not really too many people are concerned now that it could be a replacement if the hydrogen would be easily available.

"But what we’ve seen in the last 12 months is now a general interest shift and we’re starting to field inquiries and take on demonstration projects and things that we would traditionally consider low-temperature heating: baking applications, foods production, metal finishing. And it tells me that, again, momentum is building." - Jeff Rafter, Selas Heat Technologies

DG:  Yes, being easily available is an issue, I’m sure. We’ll talk about that a little bit more.

John, how about you? Any new applications, new industries that are adopting?

JC:  The thing I have seen is a little off the core of your question, but I’ve seen a couple of municipalities dealing with some of their distribution challenges, and that I’ve seen in the last year where they recognize that hydrogen is a potential opportunity to save on carbon emissions but what would it take and at what percentages can you introduce what kind of impact will it have on common appliances? That is a trend, too, and I think the middle between the production and the utilization is going to be a serious challenge for us in the U.S. and it’s an impediment if we’re trying to advance the front. You know, we have to advance on all three fronts simultaneously if we’re going to achieve an effective market. I’ve seen some very encouraging work now being considered at the local distribution level.

DG: Yes, I think we talked last time. Maybe it was Jeff Rafter, I can’t remember if you brought it up, about some of the distribution snags that we might see in New England with type of old pipe or something like that- wood pipes or something, I forget what it is.

It’s your shot, Jeff, so you go ahead. Any advances? And you can comment on that if you like.

JR:  I guess I would say what’s different is that the dominant pattern over the last couple of years that we’ve seen is primarily most of the interest came from industries that were highly energy intensive which usually travels with a high temperature process. So, it goes without saying that many of the early adopters were glass, steel, other metals. But what we’ve seen in the last 12 months is now a general interest shift and we’re starting to field inquiries and take on demonstration projects and things that we would traditionally consider low-temperature heating: baking applications, foods production, metal finishing. And it tells me that, again, momentum is building.

I think, in general, industries beginning to be comfortable with the concept of decarbonization and low carbon fuels, whether it’s ammonia, whether it's hydrogen, but, again, the recognition is that we’re only going to get so far until we see some more significant advancements in the generation of hydrogen and the distribution of hydrogen. Again, I think that remains probably the largest hill that we have to crest before we really get through some significant decarbonization impacts.

DG:  It seem that everybody really loves the concept; it’s just the matter of producing it and getting it where it needs to be.

"[Heat] treaters use a lot of hydrogen as an atmosphere, and they use it chemically rather than as an energy source. So, I think when the price comes down, they will jump very quickly on the use of hydrogen or hydrogen blends for furnace atmospheres to replace endo or nitromethanol atmospheres."

Just a quick question to follow-up on this one before we move on to the next question which, John, I’ll address to you first. But, just real quick, a lightening round here: Has anybody seen any significant application of hydrogen, specifically in heat treat, whether it be a commercial heat treat or a captive heat treat? Jeff, have you seen anything? I don’t know that I have the answer, so I’m just curious — have you seen anything, Jeff?

JR:  Nothing specific, and I think I’ll take an attempt at explaining why. I think it’s because so much of the heat treat application is really dominated by commercial heat treaters. I think they all do the bulk of most of the capacity. Where end-use companies do indeed have internal or vertically integrated heat treat, we have some interest but nothing yet in terms of meaningful commercial activity where we’ve seen commitment to projects. A couple of major industrial manufacturers have brought forward projects and studies, but nothing on-line that I’m aware of, at least in our space.

DG:  Joe, how about you? Anything in the heat treat specific, just briefly?

JW:  In the heat treat industry, like I said, single burners, of course. No complete heat treat shop will switch to hydrogen --- it’s simply too expensive. But we don’t need to switch/convert all operations; we can take one or two burners and see that it works.

DG:  Justin, how about you? Anything specifically in heat treat?

JD:  No, we haven’t had anything in heat treat, mainly for the reasons, I think, John has already highlighted.

DG:  John, how about you? Anything specific you’ve seen in heat treat?

JC:  No, but I would like to also point out that our heat treaters use a lot of hydrogen as an atmosphere, and they use it chemically rather than as an energy source. So, I think when the price comes down, they will jump very quickly on the use of hydrogen or hydrogen blends for furnace atmospheres to replace endo or nitromethanol atmospheres.

DG:  Joe, did you want to add something?

JW:  Just a comment:  That makes it of course easier since many of the heat treaters have the hydrogen tank available, making tests is not really getting the hydrogen. It’s more expensive for a little while, but they can run the tests for a week or so and that’s done then pretty easily.

DG:  Perry, anything specific in heat treat?

PS:  The short answer is no; we’ve not seen or heard of anyone, primarily because of that. There are a lot of inquiries around direct electrification as an alternative but that doesn’t work in every case. There are a number of scenarios where that’s not a viable decarbonization pathway and so we need to continue to pursue this as aggressively as we can, but at this point, that, the market price of hydrogen and, I’ll add, the sort of working out of a reliable supply chain of hydrogen because, right now, tube trucks is probably the only way you could really deliver hydrogen reliably to a remote heat treat shop so there is a supply issue there, as well.

DG:  And just to unduly poke fun at Perry, you’re the only guy on here that is allowed to mention electricity and get away with it, okay? The rest of us don’t even like that topic. ~chuckle~

John, I’m going to jump over to you on this question. It may or may not apply to you in this case, but your company: What have you specifically been doing developing, let’s say encouraging, over the last 12 months? This is kind of a time when you can tell people what your company is doing.

JC:  As far as technology, nothing like my colleagues on this roundtable. We have spent and spend a good deal of time running economic simulations for major users but we still act as consultants. I wouldn’t say we’re laying the groundwork, but when the economic data can be put in, we’ll be in a position to better and more rapidly provide people good, accurate feedback as to cost of switching and cost of implementation.

DG:  I think you and Perry kind of are maybe a little bit more on the consulting side, so it will be interesting to see what Perry has to say. But let’s go to Joe next. Joe, what has your company been doing? Then, Justin, we’ll jump over to you after Joe.

JW:  At the moment, we are doing two things:  one is installing a bigger ammonia tank because we want to get into using ammonia as a form of indirect hydrogen combustion. Do we need to crack it first? Can we use it directly? How far have to purify it? These are questions we want to resolve and do in-house. That is one thing. And then also to improve our hydrogen supply, we will install an electrolyzer. We have a lot of solar on our roofs. It’s not directly our business to produce hydrogen, but we want to have the knowledge to tell our solar customers- does it make sense to produce your own hydrogen on site or should it come from the pipeline? What are the options here? We want to be prepared for that.

DG:  Justin, over to you, and then Perry, then we’ll finish up with Jeff.

"[So] we’ll really be focusing on not only the burners ability to run hydrogen . . . but also we’re going to try to really look at the material impacts that hydrogen has on heating and as well as metallurgy to try to help some of these end-users because obviously this is a huge shift going from natural gas to hydrogen." - Justin Dzik, Fives North American Combustion

JD:  As of about two months ago, we just fired hydrogen on our regenerative burners. This was in an effort to supply data for our talk at AISTech in Pittsburgh, back in May, where we sat on a panel about decarb. From that, we are actually in the process of breaking ground on installing a permanent hydrogen facility to supply our lab with hydrogen fuel for all our test furnaces.

From what I’ve been told, we’re looking in aiming at about 10 million BTU an hour as the max capacity, so we’ll really be focusing on not only the burners ability to run hydrogen --- we’ll focus on the markets, obviously steel and aluminum first because those have shown the greatest interest, what burners actually go on those, testing the burners ability to run hydrogen; but also we’re going to try to really look at the material impacts that hydrogen has on heating and as well as metallurgy to try to help some of these end-users because obviously this is a huge shift going from natural gas to hydrogen. So, over the next year, we hope to make significant headway in, obviously, our hydrogen studies in our conventional burners here.

DG:  Perry, how about you? What are you seeing?

PS:  From a purely industrial perspective, we have a handful of projects that we’re working on now. They are essentially down-selecting the most viable pathways for industrial process heating through alternate energy carriers, whatever those might be. We have sister groups within our low carbon resources initiative that are looking at the production and transportation storage of hydrogen, whether that is the electrolysis of hydrogen from water, whether that happens to be the use of steam methane reformation with a carbon captured scenario associated with that, and we’re looking at the cost and performance of all of those particular pathways.

And looking at that for a couple of different sizes of steam boilers as well as direct combustion which is, I think, the primary focus here, and a variety of different types of furnaces, ovens, heaters and a variety of different types of burner configurations in order to assess cost and performance of those, and then begin to do the technoeconomic analysis to determine where these technologies might compete as we project the cost and delivering storage costs of hydrogen into these locations regionally where these industries may be located. So, we’re doing all of that work to basically circle wagons around the most important research that we need to do going forward.

We’re also involved in an oxy firing project with GTI Energy which is looking at, right now, natural gas but also evaluating oxy firing. Of course, if you electrolyze hydrogen, you liberate a lot of oxygen from water and that oxygen is valuable and can be a very important constituent in oxy firing combustion which has a variety of advantages, whether you do carbon capture at the source or just trying to improve the overall thermal efficiency of the process. Those are some areas that we’re working on right now.

DG:  Jeff, how about Selas? What’s been going on the last 12 months or so?

JR:  Well, I think the last year has really just been a continued pattern of counseling customers on applications and, in specific, what particular burner styles are appropriate for utilizing hydrogen in different processes. But I will say, the other topic that is starting to garner some of our attention and efforts is thinking forward about codes and standards as an enabler for more of industry to get interested in decarbonization and, realistically, while burning hydrogen is relatively easy, the handling and distribution of hydrogen has yet to really permeate the codes and standards that we use on a daily basis to govern design of products and processes. Again, it’s not unknown; it’s used in other industries for other purposes like heat treating, like refining, but we need to bring that knowledge into our codes and standards and really kind of be the highway for industries and customers to be able to convert without a significant amount of “white sheet of paper” engineering.

"I think the work that the steel industry is doing is interesting from a couple of perspectives. One is: How do you supply huge amounts of hydrogen, at scale, at a cost that is reasonably competitive? So, they’re really challenging that outer envelope in terms of how much hydrogen, and in what manner, it needs to be produced, whether blue hydrogen or green hydrogen, and really pushing forward to ultimately, hopefully, drive the price of hydrogen down, green hydrogen."

DG:  Are you still at all involved with the NFPA? Is that the type of standards you’re talking about, like the 86’s and things of that sort?

JR:  NFPA 86, obviously 85 you could drive into the boiler’s world, 87 if you go into process heaters.

DG:  Are you still involved with that? I know it says you have done that in the past.

JR:  No, I am not currently on the committee.

DG:  But you’d know enough about what’s going on in those, so that’s good.

A quick question. I don’t know that we need to spend a lot of time of this. Justin, I’m going to start with you on this one. We talked about it earlier, about the steel industry and the fact that they seem to be with steel and/or aluminum, but steel specifically, I guess; they seem to be one of the early adopters, or at least attempting to adopt it. The specific question here is: Do you see what they are doing in the steel industry as having any impact beneficial (and/or otherwise) on the heat treat industry, at all? Is there any obvious connection between what they’re doing and how it might apply to a captive heat treater or potentially a commercial heat treater?

JD:  Yes. Obviously you have to a crystal ball to know what the future is, but obviously, I think, as the demand for 100% green steel increases and the green steel producers can push their will down on scope 1, 2, 3 suppliers, you’re going to see all processing steps will need to be decarbonized. That’s the future goal, that’s the future state. So, obviously if you go down far enough in the scopes, obviously that includes processes for heat treatments of steel. Who knows how long that will take, but for sure, that is probably the future path in the next quarter century or so.

DG:  John, how about you? Do you see any benefit or any impact in what’s going on in the steel industry on the heat treat? After John, we’ll go to Jeff.

JC:  Specifically, in the short-term, no, but it’s like with any technological initiative, often there are unforeseen breakthroughs, unforeseen bits of technology that are developed that are very beneficial. Again, it’s the “known unknown” in technological development — we don’t know what it will be but, from experience, we know it’s there. So, I’m optimistic that something will benefit them, but I can’t tell you what it is.

DG:  Jeff, how about you?

JR:  Well, I’ll take a little bit of a projective throw at this one and that is I think that experiences in the steel industry will help some types of heat treating, in particular, direct-fired applications like annealing. When we move to atmosphere furnaces, I think you get to a position where the application becomes so unique that the experiences in steel probably don’t translate. So, I think there are a couple of different bodies of transferability, so to say; when we look at what happens in steel or other industries, I think it’s going to application specific.

DG:  Perry, what about you? Then we’ll finish up with Joe.

PS:  I think the work that the steel industry is doing is interesting from a couple of perspectives. One is: How do you supply huge amounts of hydrogen, at scale, at a cost that is reasonably competitive? So, they’re really challenging that outer envelope in terms of how much hydrogen, and in what manner, it needs to be produced, whether blue hydrogen or green hydrogen, and really pushing forward to ultimately, hopefully, drive the price of hydrogen down, green hydrogen.

They are also, I think, helping us to evaluate what we need to understand about valve trains, other supply components and materials, whether that’s seals, and at pressure, obviously, hydrogen has a little quirk of wanting to embrittle carbon steels that may be used for storage or transport. So, work around how to really pardon the systems such that those risks can be mitigated and understanding what it’s going to cost to convert when we go to higher and higher concentrations of hydrogen, up to 100% hydrogen, as a fuel or reducing agent. So, they’re pushing the envelope; the rest of us will be able to take advantage of what they learn.

DG:  So, Joe, I think in Europe, the steel industry is probably a little bit more aggressive than the rest of the world. What are you thinking about what they’re doing there and how it might benefit heat treaters specifically?

JW:  I’m very happy about that — that they are moving forward and being proactive. I think it used to be a dirty, complaining, dying industry (the steel industry), and now suddenly they are on the forefront of really changing themselves and really wanting to do that. I think we will, absolutely, also profit from that. We see students coming to apply for work from us because they think that’s the future: to work in that business and, I think, that’s true, but that was different twenty years ago when everybody thought maybe we will have no steel industry in twenty years. It might sound stupid that we will have steel industry, but the steel industry presented themselves as being “go to Gary, Indiana or whatever,” if you don’t think that’s a future industry, but that is changing at the moment, and I am very happy about that.

DG:  I would like to start with Joe, actually, we’ll just start with you; let’s reverse the course on this one. Let’s talk about obstacles. Whether it be production of hydrogen, distribution of hydrogen, or other technologies, what do you see being the main obstacles for adoption? And again, if you can tailor comments specifically into heat treat, fine, but I think, to a certain extent, where we see it being done in steel and aluminum then, probably, the obstacles will be very similar for the heat treat market.

Joe, what do you think?

JW:  I think, at the moment, of course, it’s uncertainty. The people are a little bit sometimes wait-and-see because nobody knows. Will it be electricity? Will it be widely available for affordable prices? Will it be energy carriers? So, I think,  and in general, at the moment, of course, there is a lot of uncertainty. What will happen with China? What will happen here? So, it’s very different. Some people just now are sitting there like a little rabbit and doing nothing; other companies are still active and say and see what their options are. I think we will see a lot of changes into the next decade compared to the past and it will be interesting times.

JW:  I think the uncertainty, that is, of course, there is no clear pathway to go; everybody has to make their own decisions.

DG:  Perry, how about you? Main obstacles for the adoption of hydrogen?

PS:  It’s the big elephant in the room: the price. It has to come down in price at the burner tip to be competitive or else, globally, there has to be some agreement which is very difficult to obtain in terms of, sort of, regional competitiveness and globally economic competitiveness of industries. And so, something has to be done.

We have to continue to pursue how we’re going to produce hydrogen, transport and store it and have it become cost effective at the end-use. There are a  number of strategies around how to do that but, obviously, if you’re going to electrolyze it, there’s a lot of work looking at how that could be improved in terms of its overall, final efficiency. That’s the biggest challenge. I think, the other transport and storage attributes can be overcome technically; I think we kind of know how to do that.

There is a big decision, I think, with regard to whether we produce hydrogen centrally and then move it around the world in various modes of transport including pipelines, which is generally the most cost-effective way, or in some cases, do you produce that in situ and then the question of whether or not you use steam methane reformation of a fossil fuel and carbon capture — that’s a policy matter.

I will say this: our first round of studies and sort of bookend scenarios that we’ve looked at for hydrogen production and use economywide suggests that policy matters a lot and whether or now we allow carbon capture and sequestration will make a huge difference in the degree to which hydrogen penetrates economically, markets beyond the very big ones that we’ve talked about. So, if we get into heat treat shops, other end-use applications, economically and transport and buildings, a lot depends on where we end up with carbon policy.

DG:  Jeff, how about you? Obstacles?

JR:  Well, very similar comments to what Perry had said — it has a lot to do with economics, distribution, and availability. Obviously, the last 12 months has not been a typical economic environment for what we’ve enjoyed for fuel security in the last 40 or 50 years, and I think, at this point, nobody has a crystal ball to determine what the relative price of fuel alternatives is going to look like going forward. Obviously, the hydrogen play is still reasonably new from the perspective that we need better ways to generate hydrogen, ones that could put the fuel on par or near natural gas, and as a real-world example of that is we’ve actually seen a resurgence in interest for firing liquid fuels as an alternative to a nonsecure natural gas supply and why? For the simple reason that they’re transportable without a pipeline. So, it will be interesting, but I think it’s that juncture of economics, supply and distribution that’s really going to be the determinate on where we land 10 or 15 years from now.

DG:  John, how about you? Obstacles?

JC:  For the heat treat area, I think the transportation. Heat treats, unlike steel mills, unlike petrochemical facilities, tend not to be collocated. The commercial heat treat and the captive heat treat tend to be distributed and they’re used to being able to obtain natural gas from a pipe on the road. So, until we have a means to run more pipe, which is a challenge, it’s a very real challenge, especially if you’re trying to obtain a new right-of-way in the U.S., that’s an extremely lengthy period of time. So, assuming, and I’ll assume for one minute that the cost of production, that issue can be dealt with. I think distribution, very likely, will be a longer-term impediment for heat treat in the U.S., maybe not so much for steel or other applications.

DG:  Justin, how about you? Last one here on the obstacles.

JD:  Yes, obviously, to just echo everyone else — it’s cost and availability, right? So, cost is like ten times what natural gas is right now so, in availability, like John said, do we have a pipeline that goes around the United States with it, that’s quite difficult, or do we produce at site? And then we have to consider the manufacturing capacity of the electrolyzers and the device if we’re going to do it on site; can that keep up with the demand?

Operationally, the cost. You know, thermal efficiency and process integration — really those things will help bring down the cost of hydrogen. The other industries like steel and aluminum are advocates of heat recovery right now — they employ it with recuperative technology or regenerative. Heat treaters don’t really do that and, I think, that is kind of a need when you’re switching to hydrogen to try to bring the cost close. It’s never going to be equal, but to bring it closer to natural gas, heat recovery is almost a must.

DG:  Production and distribution, yes, as somebody said, “it’s cost at the nozzle,” how much is it costing?

If anybody wants to comment on this, fine, otherwise we’ll gloss over it and move on to the last question, but somebody commented and said, “I don’t know if you’ve noticed or not, but three-quarters of the earth is made up of water with two hydrogen and one oxygen, right? I don’t know if you noticed, but the bond between those two things is very, very strong.” It’s very difficult to break the hydrogen away from the oxygen. So, almost anything we do to produce it from that, the most abundant source, it seems like, would be water, would be very, very expensive. Does anybody want to comment on that?

JR:  Just one additional thought is that in addition to water being widely available, the other challenge you have to have is you’re typically looking for a relatively clean source of water to run through an electrolyzer, and if you think about just what you see on the news every night, we already have a challenge where many parts of the world are having difficulty coming up with adequate supplies of clean, fresh water. So, desalinization definitely has a play in there, but the abundance of water, or hydrogen being the most abundant element in the universe, really doesn’t solve our problems. There are still a lot of developmental challenges around the generation of hydrogen.

DG:  Anyone else care to comment on that before we move on? Joe, go ahead.

JW:  Regarding the price, of course, that’s a little relative. We fear the moment the natural gas prices triple and quadrupling, it’s also the hydrogen price has to come down. But if the net/gas price goes up steeply, that will then make them also equal, just at another level, not that it’s what the people want but that could well make it much more attractive sooner natural price gas go up.

DG:  It’s all the relative price, you’re correct. Any other comments? I think it’s a good segue into our last question and that is: the disruptions that we’ve seen, geopolitical situations and what impact that’s having on the advancement of hydrogen.

Justin, why don’t we start with you on this one. Any comment on the geopolitical situation, how that’s helping or hurting the current move to hydrogen?

JD:  Yes, obviously every day it’s changing, so every day it’s making a different effect. But with the increased upward pressure on fossil fuels due to the geopolitical environment, there are potential cost penalties for changing from fossil fuel to carbon-neutral fuels like hydrogen that may be decreased, obviously. So, the desire to maintain the production capability in the face of fossil fuel shortage may further drive switching to hydrogen — hopefully, it will — or other carbon neutral fuels and obviously or ways to achieve the thermal input needed for the processing steps for all these customers.

DG:  Perry, how about you? Any comment on the geopolitical situation?

PS:  It’s unpredictable. I think the volatility of fossil fuels is an issue. The attraction that we have, at the moment, for hydrogen is that, ultimately, if we look at the production of green hydrogen, it would come from some renewable source.

Now, that could be biofuels that are hydrocarbon-based that are produced in natural avenues that are carbon-fixing so they’re renewable, but when you look at the green pathway for hydrogen through electrolysis, you’ve got to use electricity and so the attractiveness to that right now is that there are periods of time where we have a lot of excess power and we need to store that; batteries are not a good option for the volumes and timeframes that we want to store that power and so production and storage of hydrogen so that we then can reuse it either directly as combustible fuel somewhere or otherwise. That helps the whole energy system work a little better in terms of periods of higher and lower demand and so, I think, to me, that’s going to be sort of near-term more likely to drive things.

I think the geopolitical situations create a lot of interest and realization that we’ve got to do something, but the changes that are going to have to happen, I don’t think they’re going to happen fast enough to respond to those kinds of shock scenarios. So, this is going to take some time for us to deliver an integrated energy system takes advantages of low-cost power to produce hydrogen pulls together production distribution systems that end up working on a fairly seamless and effective final energy distribution system. So, this is not a quick fix.

DG:  John, how about you? Geopolitical situation.

JC: Speaking as an American, our geopolitical concerns differ greatly with our European friends. We produce and export 10% of the natural gas — or attempt to export 10% of the natural gas we produce, so we are actually awash with natural gas while our European friends are not. Even if the instability in Ukraine is settled tomorrow, the question comes up: Can Europe trust Russia, long-term, to be a critical supplier and, arguably, I think you can’t. So, I think there’s going to be a divergence.

But even in the U.S., we have a significant political risk that we have to recognize and that is forming a consensus to put in place the necessary rules and put in place the necessary legislation to enable this transformation because we have yet to form a solid consensus in the U.S. that decarbonization is necessary. There are a lot of, again, I’ll use the term “externalities” at play and in the U.S. we, ourselves, even with all our resources are not yet in a position to form any sort of coherent plan to tackle this initiative. So, I caution people from the political side to keep working on the technology and keep writing your congressman.

DG:  Two fronts there. So, Joe, give us the unique perspective from Europe on this. Geopolitically, you’re going to have a little different perspective here.

JW:  John already mentioned, of course, we are in a different position because we don’t have our own energy sources and now, I think, we are hurt pretty badly by relying on cheap, Russian natural gas supply. We thought that we would get that forever and very reliably and that’s not the case. So, I think we have to diversify, we have to get more of our own resources, we have to conserve energy, use less, because otherwise we are just dependent — we are not free in our political possibilities if we have to rely on that cheap energy. Of course, to a degree, maybe, that is a little different in the U.S. but being dependent if everybody goes out on the street if the electricity shuts off and the air conditioning cuts down is also a kind of dependency on certain things so no telling for the future. So, I think that dependency on cheap energy is dangerous everywhere. And we should work on that to be here more conservative in using it — using less, using on-site; you can have local tank and there have your own air condition on every roof and not depend on the grid and everything. I think that would be good. We learn the hard way right now, but I think sort of which it wouldn’t hurt for the U.S. to do certain things the same way.

DG:  Learn by watching rather than learn by doing, you know?

Jeff, how about you?

JR:  Well, I think the current geopolitical situation is a reminder that although we’ve enjoyed five decades of really stable, inexpensive energy supply, it’s never guaranteed. It’s been quite a while since we had this type of market disruption around fuel supplies, but it’s a reminder that fuel supplies and energy really are a worldwide market that are deeply interlinked region to region. So, as we look at potential changes and what’s coming forward, I think we have to give a significant amount of focus to where we can make the most impact and decarbonization, and manufacturing really represents, at least in the United States, about a third of all the natural gas consumption. That means that two-thirds of it is power generation residential building and heat and from that perspective it kind of echoes Joe’s comments that it’s multiple technological advancements and market changes at the same time that are going to drive the initiative forward; it can’t just be heat treating or manufacturing, it has to be a union of multiple technological changes and adoptions at the same time for heat, power, electricity and industrial heating.

DG:  That wraps up the initial questions that you all knew about ahead of time, so I’m just going to throw out one more: If there was something we were talking about here and you said, “You know, this is really something important that ought to be said.” Did anything like that jump to your mind? Is there anything that you would say kind of as a concluding or also a “Hey, let’s not forget about this?” Anything come to mind?

PS:  I’ll jump in, Doug, just tagging on to what Jeff just said. Just a reminder that our energy systems, our supply of binary energy where the energy comes from and the final end-use systems are interconnected by very complex markets and delivery and storage systems, whether you’re talking about power, natural gas, fossil fuels, other liquid fuels and so forth. Those sources, whether you’re looking at bio sources, have limitations in terms of land use or whether you’re looking at hydrolysis of water, whether that be the cost or the impact on water resources and availability or whether you’re looking at wind and solar- all of them have their positives and their negatives. In the end, the marketplace, with all of these various end uses, there are a lot of societal decisions we’re going to have to make around who gets access to which sources. As an example, aviation fuel is a very difficult one to replace in terms of the liquid fuel because of energy density needed and the need to carry it along with you. How do we ensure that aviation gets the  type of fuel at a cost that we can all withstand?

So, whether a lot of competition — not just within our industry that we’re talking about here, but amongst all aspects of the economywide uses of these various fuels, including hydrogen — there will be competitive forces that ultimately will create challenges for where and how we use hydrogen and how we produce it and where the best end-uses of hydrogen, specifically, would be, or other fuels like Joe mentioned- ammonia has its interesting potential areas where it could be applied as a combustible fuel and so forth. We just need to understand that there are complex economics involved in determining to what degree hydrogen may end up being a fuel for industrial furnaces.

DG:  Anyone else? Something that needs to be mentioned you might’ve forgot?

JR:  I would throw in one other comment. Knowing that the audience, for most of this presentation, is going to be in heat treating, I think perhaps one word of advice would be: hedge your bets. Design in and plan for flexibility. Being linked to one energy source is probably not economically advisable for any manufacturing business at least until markets and geopolitical events settle down.

DG:  That’s a good point.

Gentlemen, thanks a lot, I appreciate the update in 12 months. Justin, thank you for joining us this time, I appreciate that.