Danny Rice: The pot’s boiling. We’re getting ready. Yes. No, there’s a whole lot of things substantially. I think as we talked about when we were completing the destocking, we just talked about what are the key things you need of this recipe for this thing to be successful. You need access to natural gas, The lower the cost of natural gas, the better just because the more competitive you’ll be on the cost of power. You need access to a place to store the CO2 and certainly markets where there’s value in that CO2, either on the voluntary side like for enhanced oil recovery or on the involuntary side through federal credits, federal subsidies, federal taxes, like the 45Q here in the United States. Those all make that — the carbon part of the equation valuable.
And then the third piece is you need access to a lot of power demand because these are really, really large power plants. And one, we’re looking at deploying four NET Power plants. You’re talking about a gigawatt. So this is grid scale sort of power. And so you need those three things. You need access to the gas; you need the subsurface, a valuable subsurface; and you need power. And so when we look internationally, Canada, Western Canada is pretty amazing. It has all three of those criteria. The Middle East is really, really exciting to us. Southeast Asia, where we’re forming a joint venture with SK Group is really interesting. And then parts of Australia are also really, really interesting. Europe’s one that everybody says, what about Europe?
And Europe should make great sense. They’ve been sequestering in the North Sea for almost 20 years now. So they’ve demonstrated that you can safely and responsibly store that CO2 for Millennia. But I think Europe’s challenge right now is they’ve stopped developing their own gas supply. And so right now what they’re facing is a high cost of natural gas, which is leading to a high cost of power. And so I think if Europe can really just figure out its energy procurement strategy around low-cost, reliable natural gas, Europe becomes a really, really interesting market for us. But I think right now they’re facing bigger problems, which is just procuring energy security right now. Because right now, they’re really at the mercy of a whole lot of other countries and they don’t have control of their energy destiny.
So energy security is, above all else, the most important thing. It’s the foundation of a sustainable energy future that you can then decarbonize with NET Power. But first, you have to secure that energy and I think Europe has a lot of work to do to make that happen.
Operator: Our next question comes from Betty Jiang with Barclays.
Betty Jiang : Good morning. Thank you for all the helpful comments on today. Just a question on CO2 transport. One of the major proposed CCS pipeline was canceled last month and a lot of that due to regulatory issues and local community pushback. I know you’re focused on just short distance transport of less than 40 miles. Are there any lessons learned there? And how do you limit your risk in your CO2 transport strategy?
Danny Rice: Yes. Hey, Batty. This is Danny. That’s a great question. I think first to address the challenge with these long pipelines. I think these infrastructure challenges in opposition to new infrastructure is specific to CCS, it’s specific to any infrastructure projects. Whether it’s pipelines, whether it’s solar farms, wind farms, you’re seeing people that are very sensitive to their landowner rights because it’s their rights, especially here in the United States. And so I think one of the things that we’ve kind of learned just from observing over the last couple of years is just because you’re doing something that’s good for the environment, doesn’t necessarily give you the social license to operate wherever you want, however you want, whenever you want.
I think you always have to be a good steward and a partner of those communities that could be adversely impacted by your activities. And just because you’re doing what’s great for the environment, doesn’t give you the rights to be able to trump that. And so I think for us that certainly shapes our approach on origination, where we are really trying to minimize the impact in order to maximize the benefit of our plants. And so what does that mean in practical terms? That means is as we’re really mapping that stuff out to really understand where the CO2 sinks, where’s the electricity infrastructure, where’s the natural gas pipeline infrastructure? We’re not really just identifying just like broad areas and saying, we’ll build that 200-mile pipeline.
