As global supply chains push for greener solutions, ports face the challenge of integrating zero-emission technologies into their operations. This panel discussion, moderated by Brian Goldstein, a veteran in the alternative fuels space, explores the critical role of hydrogen in transforming the Port of Los Angeles and Long Beach into sustainable hubs. Panelists from various sectors, including port authorities, labor unions, and technology providers, share insights into the complexities of adopting hydrogen technology, highlighting the need for collaboration, infrastructure development, and regulatory alignment.
Sean A. Gamette and Michael Galvin, representing the Port of Long Beach and the Port of Los Angeles respectively, delve into the challenges and strategies of achieving zero-emission cargo handling by 2030. They discuss the necessity of a balanced approach, combining grid power and hydrogen fuel cell technology, and the intricacies of master planning for terminal infrastructure. Sal DiCostanzo and Matthew Dickinson provide perspectives from the frontline, highlighting the importance of safety, training, and the economic implications of transitioning to hydrogen. Their collective insights illustrate the path forward, marked by innovative solutions, regulatory pressure, and the evolving demands of a sustainability-conscious market.
"By 2027, everyone with a business in California will report their greenhouse gas emissions profiles, and we want ours to be as low as possible."
Brian Goldstein
I've worked around the alternative fuels space for over two decades, mostly dealing with hydrogen. The general rule of thumb with alternative fuels, especially when it comes to operations, is that the fleet managers who are operating the vehicles need to be on board with the transition. You can have all the goals and incentives in the world, but adoption won't get to where it needs to be without the buy-in. We set a lot of these goals in Sacramento but it's critical to listen to the men and women that are operating the equipment. Their equipment has to make it through their shift without them having to stop and plug it in, or it has to make it through three shifts a day so they can recharge overnight, and be ready for the next day.
I’ve also experienced this at the municipal level, working with police officers who are heavily reliant on their cars and other municipal vehicles such as refuse vehicles. There is very little room for those vehicles to not work well. The police rely on these vehicles to keep us all safe, and the last thing they want is to get into a vehicle that doesn't have fuel or that still needs to be charged. Similarly, refuse trucks have to work for waste collectors to do their jobs. We have to listen to the men and women that are operating and reliant on these vehicles, to make the connection between policy, regulatory communities, and the folks that are using the technology.
The Department of Energy hosted a conference in 2019 with Pacific Northwest National Laboratory and Oak Ridge National Laboratory, called the H2 Report. It was a conference to start talking about hydrogen applications and ports and to say that it was poorly attended would be an understatement. At the time, we were only really discussing hydrogen in terms of light duty, and maybe heavy duty around the corner at that point. The feeling was that this hydrogen topic was far off - nobody wanted to waste their time. Here we are five years later, looking at $7 to $8 billion from the federal government. We're looking to direct about $600 million of that into these complexes here at AltaSea to help support the adoption of zero-emission technology.
At that conference, they used the example of the Port of Seattle (SeaTac) to talk about how much hydrogen would be needed. To establish a baseline, they looked at things like cargo handling equipment and various trucks, extrapolating onto ocean-going vessels, harbor vessels, and so forth. Taking the methodologies used at SeaTac and applying them to the complexities at the Port of LA, we would need approximately 815,000 tons of hydrogen a day just to support drayage and cargo handling equipment. For perspective, we have over 3,000 pieces between the two ports of container handling equipment, and the last number I recall was over 23,000 registered drayage. Just two
years ago, that number was 20,000, and we've seen a 20% increase in the number of registered drayage trucks, or 18-wheelers, in the last five years. Using the Department of Energy (DoE) methodology, it’s suggested that we would need about 815,00 tons of hydrogen per day just for those two applications.
Energy Independence Now (EIN) reported in 2016 their roadmap to renewable hydrogen and we assessed how much hydrogen is being produced in California. Right now, the vast majority of it is being used for oil refining -- several refineries surround us. With the 30 to 40 million registered vehicles in California that these refineries are supporting, we import some oil and gas here as well. The total amount of hydrogen being produced in California when we did our report, which hasn't changed very much since then, was 2.1 million tons per day. We've got to increase the overall amount of hydrogen produced in the state by over a third, and there are deadlines. The deadline for cargo handling equipment to be zero emission is 2030 and for new vehicle sales and heavy-duty trucks is 2035.
Not only do we need to increase production within the State, but we’ve had a goal of doing that with a zero carbon fuel, renewable hydrogen. We have a very challenge on our hands. I've been impressed with both ports setting these very aggressive goals and targets, which Shawn and Mike will expand on.
Sean A. Gamette
I can share my perspective, which is for the Port of Long Beach following through on this with a balanced approach. So we’re projecting zero-emission cargo handling equipment by 2030, which would be a sixfold increase to our electrical providers, Southern California Edison (SCE). So, that's not something that we can realistically count on. We have to have a balanced approach when it comes to the use of hydrogen and the conversion of our equipment.
Trying to get the boots on the ground in Long Beach to get to this 2030 goal, we are currently in the master planning stage for these various terminals. We're thinking about, what infrastructure terminal A needs to progress towards those goals. What infrastructure are they going to need? Is it infrastructure for fuel cell equipment, for battery electric grid power? Is it straight off-grid power equipment? Those kinds of master plans are being developed, which would be following an effort to pilot equipment. Piloting the various types of equipment produced the data that informs these master plans.
We're kicking into gear now as we design the conversion. We’re considering the terminals, and infrastructure needs, and asking whether it’ll be a combination of grid power, electricity from SCE, or whether that's hydrogen fuel cell equipment. Whatever it is, the infrastructure needs to support that. That’s our approach right now in Long Beach as we look at the equipment immersion -- I'll just start there.
Michael Galvin
I'll add to that -- it’s hard right now to figure out what to do because the technologies are fairly immature. We don't know which way things are headed so at this point, we’re planning for multiple scenarios. We’re hoping that hydrogen advances because we know that it works better in the heavier-duty pieces of equipment to take the load off the grid, but you also have to build the grid to do what you minimally need it to do. We have a no-risk project dropping in power into Terminal Island and another side of the harbor to support our electrification needs we expect without overbuilding. It’s a hard line to walk because we just don't know where the technology will go in the next five years and we're hoping that the market catches up quickly to meet our goals in 2030. We have to take certain risks right now and develop infrastructure to make that happen, hoping things come along the hydrogen side of things.
Most importantly, we need to continue these conversations and convene to have conversations about issues. I think things will prove that the equipment works really well. The next question is, how do you meet equipment with the market demand? How do you finance that to get to the amount of new hydrogen you need in the system? Someone probably needs to finance that production, but how do they finance production when it's so segmented all around?
We have 13 different terminals here between the Port of LA and Long Beach. There are other uses but they're all segmented -- we need to have a bridge in the marketplace before we have large-scale production to drive the price down and increase the volume to meet the need. Those are the difficult things to answer right now because the market is not built up enough yet to know exactly how that's going to happen, but we continue to have conversations with producers in the marketplace, with our container terminals, and with anybody else that is going to need hydrogen in and around the port area. This includes our power generation hardware, LADWP. We trying to figure out how to harness all this demand and make it workable for someone to start financing production.
Brian Goldstein
We got perspectives from the port authorities here -- Long Beach and LA, and there are a lot of grant opportunities to help bridge the gap with technology. I think the first challenge that comes to mind is the cost. It's not a one-for-one, you can’t just use the same cost of a diesel truck to buy a fuel cell or battery truck.
The port is leaning in on the environmental side as well, but I'd like to ask you Sal, what are some of your concerns in terms of the men and women that will be operating the vehicles? Are there signs of optimism or excitement? What are your concerns?
Sal DiCostanzo
Thank you, Brian. Well, Sean and Mike laid out a good review of concerns and opportunities at the Ports. Our perspective on providing labor is more intimate with the
operation of the equipment, maintenance, and repair as well -- because it's on the frontline. We've been dealing with evolving technologies since the first forklift was put into the hands of the ship, so we're comfortable with the change; of this magnitude, it's akin to containerization. That happened back many years ago. Mark Levinson authored a book called The Box which many of you may have read already, but it was a monumental shift and took the collaboration of many partners. Truthfully, that's not unlike what we're going through today.
In preparation for this morning, I took some notes and began writing down the names of some folks I've been involved with, and some of the different companies they represented. ILWU alone represents 15,000 full-time and part-time workers, but we're in a unique position to touch port authorities, all terminal operators, regulatory and legislative bodies, and equipment manufacturers. Being on that frontline allows us to demonstrate the projects, including those on the battery electric side. We've had generation zero products that unfortunately failed, at very critical times and the same can be true of any new technology - we get that.
We also have to take into account safety as well. The technology has to not just be reliable from a productivity standpoint but safe. By extension, those 15,000 folks and their families constitute a big part of the community around the board. Those folks are relying on us to ensure they are safe. That's why we're so grateful that we're pursuing that through partnership. We have comfort in safely handling these materials and the opportunities that can present themselves going forward. Matt and I have worked together very closely in several meetings and venues.
For example, if any of you have ever watched bicycle racing, you know that the lead pack is a pack of bicyclists. It might be 5 or 10 but it's not just one bicyclist. A concern for some is that the Port of LA and Long Beach, or California in general, is ahead of everybody else. They're not being held to the same regulatory standards that we are. The equipment we're retiring is turning up in these other places, so it’s just shifting emissions around and not solving the problems. Consequently, this could be putting us at a disadvantage. If we could nationalize this effort, then we're talking about a level playing field where everybody has to start investing, and I think it'll give some momentum. I don't know if that directly answers your question, but hopefully touched on some points.
Brian Goldstein
That's really helpful, thank you. I think Matt deserves a lot of credit for leaning into this challenge as an early adopter of technology to try it out, provide feedback to the technology manufacturers, and so forth. I know from some past conversations that it's not just requirements but the striving to meet the requirements of customers. They want carbon neutral, so could you comment on the challenges? Where are you optimistic?
Matthew Dickinson
I'm optimistic because I know technology is a solution to the problem, but it’s about getting to a place where the economics of it all makes sense. It's going to be a bit of a challenge. You know, I used to think, until recently, that my name at the terminal was ‘added cost’. Now, I transitioned from the crazy uncle at Thanksgiving to someone who might know what they're talking about - so that's fantastic.
I love the change, but I view the situation in two ways. One, it’s the most significant problem facing humanity today because the implications are so extreme, as associated with humanity and our planet. The other one is getting this technology adopted provided that we're in a hydrogen shortage. There are hydrogen assets in the test phase and some are commercially deployed, but we have a lot of difficulties getting hydrogen. The cost of hydrogen is expensive right now. If I have one item that I would like to expand to 10 or more, and people in my organization are on board with that, then I get hit with - “How much does it cost”? Most of those answers are enough to get me thrown from the fourth-floor window. I don't know what the mechanisms would be, but if there was a fund set aside to offset the costs of hydrogen through, let's say, 2027, to offset your hydrogen with something inherent in natural gas. That would be a fantastic way to entice people to experiment with hydrogen fuel cell equipment. We've proven that it works and we've proven a solution that meets the durable requirements of this community’s operational environment. We're happy, but those things need to be answered. I like the idea that the hydrogen economy in Los Angeles gets developed in place to benefit from the scale of its local production through renewable sources.
If you have 15 pieces of equipment on your terminal, your demand for hydrogen isn't going to be that great, but we can fill those gaps until we have a steady supply and scale. I’ve had people pushing these programs because of the equipment and that is the thing, at least from my perspective. When I was in maintenance, I didn't really share best practices with my peers - it just wasn't a thing. We're all competing with each other now and we don’t want to share secrets, right?
Now I can tell you that in the sustainability space, we get together with all the other folks in the fight organically, and we talk about all the projects we're doing and about all of the things that are working and not working.
I know one machine by itself will outperform what we're currently using, but I don't have an answer on how I should be toggling between 3 and 6 am without adding humans, equipment, and infrastructure. Those are the questions that have to get kind of sorted out in the next round of testing. That's why I want 10 or 15 to experiment. I can look at the different fuelling options that we have available to us.
Sal and I frequently work with the hydrogen coalition in creating safety and training videos for longshoremen, and anyone else who wants information relevant to the energy transition. That's exciting stuff. I never thought it would take me outside of the terminal as much as it does. In the department of change, we're willing to take action.
The other thing I'd like to highlight is regulatory pressure, but I think the real pressure driving change is going to be the one the consumer makes. People want sustainable products. They want to know that their products passed through a sustainable supply chain, and I look at that as a strategic opportunity by 2027. Everyone who has a business in California will report their greenhouse gas emissions profiles, which I want to be as low as possible. By the time that first report comes out because every container that comes through Phoenix is part of some other company’s Scope Three emissions profile, they will have to offset that if they want to claim sustainability. While that might make companies angry and put them in a bad spot, I view it as strategically positioning yourself for the future. If you can get low first, you will gain market share. It's just that simple.
That's our position and that's why we're going that way because it's not only the right thing to do for humanity, but it’s just smart business. It's going there anyway, so we need to lead the way in Los Angeles and show up for the rest of the planet. Show what can be done when you roll up your sleeves working with the best and brightest to solve the problem.
Brian Goldstein
You made a fantastic point that this has to make sense from a business standpoint, and we can talk about the need for it all day long, but ultimately, the economics have to make sense. It will, as customers drive the demand there as well. We really do have this very unique opportunity in Los Angeles. It's notable for the entertainment industry and looking at the impact of our port operations on the rest of the country as one of the most vital parts of the country’s economic engine.
As we approach the world stage of the Olympics in 2028 and the World Cup in 2026, this is an opportunity. I appreciated hearing the optimism from our panelists, and this is a topic we could spend an entire day discussing. I’d like to take this opportunity to announce that we are putting together a full-day course workshop on AltaSea, targeting August 14, but that date hasn't been confirmed. Thank you all for your attendance!
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