Opal Fuels Co-CEO Adam Comora joins Yahoo Finance Live to explain how the company coverts methane emissions into natural gas.
Video Transcript
KARINA MITCHELL: We'll stay on the energy sector. Renewable natural gas company Opal Fuels is planning to go public via a SPAC deal with Arclight Clean Energy. Here to discuss that and R&G production is Adam Comora, Opal Fuels co-CEO. Adam, thank you so much for your time today. If you can just, first of all, just give us a lay of the land, explain to us how is natural gas created. I know it uses methane gas.
ADAM COMORA: Yeah, exactly. What we do is we take harmful methane emissions that we capture at landfills and dairy digester-- dairies from cow manure. And we clean up that gas and turn it into a renewable transportation fuel for the class 8 heavy duty fleet market.
ALEXIS CHRISTOFOROUS: So, Adam, I think it's awesome what you're doing. And it should, over the long-term, make a-- have a big impact on our environment. I know for a long time, you've been doing this in other areas. But what does this mean now to transportation fuel? Because I know that you've been doing it with renewable electricity for a while. And how are you getting companies to agree to jump on board? Because a lot of these transportation companies are older companies who've been doing it the old way forever.
ADAM COMORA: Yeah, great questions. And we have been doing this for a long period of time. We've been in the renewable natural gas business for over 20 years, taking that landfill gas and turning it into renewable electricity. And six, seven, eight years ago, we started thinking about higher, better use of those renewable natural gas assets and have been in the midst of converting those power projects into renewable natural gas that we can then use as a transportation fuel.
And we do that by building renewable natural gas fueling stations around the country. We've built 350 so far. UPS is our largest customer where we've built 50 stations for them and have over 5,000 of their class 8 trucks fueling at stations that we operate for them. And really, we're getting people on board because it is an extremely rare product and solution where companies can both save money and dramatically reduce their carbon emissions. So we're really excited about it. It's a proven technology. There's over 60,000 of these trucks on the road today.
And, you know, when you read a Bill Gates book and everybody talks about the green premium and convincing people, this is actually a green discount product. So we're really excited about the prospects and actually are seeing a lot more interest coming from numerous large logistics and trucking firms.
KARINA MITCHELL: And how instrumental was President Biden and his Build Back Better plan in leading the charge and making people more aware and more interested in your type of product?
ADAM COMORA: Well, certainly, capturing harmful methane emissions has gotten more attention recently. And we're grateful for it. It's the single most important thing we can do to halt climate change. The second biggest issue is reducing emissions from the transportation sector. So really excited that this product can hit both of those head on. The Build Back Better plan has a few features to it, which may help increase adoption. One is an investment tax credit around the capital expenditures when we build these facilities.
We can also take our renewable natural gas and create a low carbon intensity hydrogen. And we've got a couple of agreements in place, strategic agreements, where we will be supplying renewable natural gas to lower the carbon intensity of hydrogen. So if that gets passed as well, that could be a new end market for us for our renewable natural gas. But, you know, it's not just the Biden administration. We're really seeing this trend across the globe and finding new end markets as well internationally. So we're terrifically suited to decarbonize transportation here in the US. And at the same time, there are other end markets growing as well, either supported in this Biden Build Back Better plan or across the globe.
ALEXIS CHRISTOFOROUS: Adam, give us a feel for cost, cost of renewable natural gas as compared to other sources.
ADAM COMORA: Well, fossil natural gas would be a little bit cheaper to produce than what we're doing from our renewable natural gas. You know, it's pretty interesting, though. A lot of people, when they think about the cost of fossil natural gas, they're not thinking about the indirect costs that they're causing by the climate change. So that doesn't necessarily get included in their cost of operations.
But it does show up in the rest of the global economy with the issues that are being caused from it. So although our direct operating costs are a little bit higher than fossil natural gas, when you factor in all the emissions and lower carbon intensity that comes with our product, I would think the full lifecycle of our cost is actually not as great as the emissions caused by some of those other fossil fuels.
KARINA MITCHELL: And then, Adam, I want to ask you, what percentage do you think of energy use in the US is R&G? How much does it account for? And then what growth do you anticipate going forward into next year, let's say?
ADAM COMORA: Yeah, so right now, it is a drop in the bucket, so to speak, of total energy production and usage in the US. We produce-- oh, we think about ourselves in the diesel heavy duty transportation fuel market. And that's about a 45 billion gallon a market year. And renewable natural gas is maybe accounting for about 500 million gallons. So we still have a ways to go. And we're really excited that, you know, there's plenty of new landfills to convert, renewable electricity projects to convert, and new sources of biogas as well. Ultimately, we think, you know, we can increase production 10, 20-fold from where we are today.
KARINA MITCHELL: All right, well, it's definitely the fuel of the future. Adam Comora, Opal Fuels co-CEO, thank you so much for your time today.