Canadian Transit Think Tank CUTRIC Chooses Inaccuracy, Irrelevancy, & Attack – CleanTechnica

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Over the past three weeks, I’ve been assessing various aspects of the Canadian Urban Transit Research and Innovation Consortium’s (CUTRIC) positions, research, and publications on transit bus decarbonization. I’ve published ten articles directly about CUTRIC’s material and reports, or closely related and with serious implications for their claims that both hydrogen and renewable natural gas are part of the decarbonization mix.

The articles cite EU Joint Research Committee hydrogen funding annual status reports that show hydrogen vehicles and refueling stations have not achieved any performance, reliability, warranty, or fiscal targets despite 25 years of EU funding, and federal funding just since 2016 of €1.2 billion. The articles cite US Department of Energy reports on hydrogen refueling and bus fleets in that state showing that hydrogen refueling is out of service 20% more of the time than it is refueling vehicles and that hydrogen bus maintenance costs 50% more than diesel buses, and double that of battery electric buses. It cites City of London transit findings that hydrogen buses could not achieve full coverage of expected routes while battery electric buses could with simple addition of en route charging. The articles cite US Department of Energy published empirical data on the costs of delivering hydrogen to refueling stations.

One article dealt explicitly with renewable natural gas, which three dues-paying members of CUTRIC, natural gas distributors, are pushing hard for, with one of the firms, Enbridge, having an employee on the Board of Directors of CUTRIC. That article cited public Enbridge data to show that after 13 years of promoting and developing renewable natural gas, it represented 1% of Enbridge’s utility distribution volume and 0.02% of its transmission of natural gas, including for export as LNG. It cited the International Council on Clean Transportation’s Fugitive Emissions of Unburnt Methane from Engines (FUMES) study and Shell’s public statements that the biggest source of high-global-warming-potential methane was from their methane-burning engines. It cited Global Carbon Project’s methane budget for anthropogenic biomethane emissions, the amount capturable as renewable natural gas. It cited peer reviewed research into the high leaking rates of anaerobic biodigesters.

One article assembled a complete set of hydrogen bus trials that have been attempted over the past 20 years. Overwhelmingly, the hydrogen buses were abandoned after the trial and the transit agencies committed to 100% battery- and overhead tram-buses. All trials were referenced back to reports from the transit agencies or credible press sites. There are more abandoned hydrogen bus fleets than hydrogen bus fleets in operation today.

One of the primary articles assessing the $9 billion price tag Brampton report I co-authored with Michael Raynor, Harvard PhD of business administration, formerly a managing director of sustainability and thought leadership with Deloitte, and author and co-author of four books on strategy and innovation, including The Innovator’s Solution with Clayton Christensen. Our professional assessment of the Brampton report, with our overlapping and global expertise in sustainability, transportation, strategy, and consulting, found $1.5 billion in swings favoring a battery-electric-only fleet, dwarfing the $10 million difference CUTRIC’s report claimed was material:

• $1.1 billion for modeling that pushed hydrogen bus acquisition out so far in time that discounting due to inflation reduced their costs by 40%
• $200 million extra for gray hydrogen costs that are in line with real world actuals for trucked in hydrogen
• $100 million less for replacement of batteries in battery-electric buses as batteries in real world fleets are lasting much longer than projected and costs in the 2030s will drop significantly
• $25 million extra in costs for hydrogen fuel cell replacements as they are lasting only 3 years in real world fleets
• $25 million extra for carbon pricing for gray hydrogen which was entirely excluded from the cost case by CUTRIC
• $10 million extra for hydrogen storage and refueling facilities as CUTRIC had low-balled that cost based on global data, ignoring the costs of the hydrogen liquification components they had included.

All of this is to say that the 25,000 words or so published over the past three weeks were nerdy, fact-based, and referenced credible sources.

After one of the first articles was published, CUTRIC hired a PR agency to address the fallout. That’s actually a reasonable choice, if they hire the right agency for the right reasons. CUTRIC’s $9 billion price tag report for the city of Brampton, which recommended a mixed fleet of hydrogen and battery electric buses, is so flawed that it’s an existential crisis for the organization. If they had accepted and internalized their failure and hired a PR agency to guide them to the appropriate response, they would have dealt with the situation appropriately and have a chance to be a useful part of the transit decarbonization in North America. A good PR agency would have helped them do that.

I was made aware of the hiring of the PR agency because a representative emailed CleanTechnica to tell them and me that they would be responding. Because my motivations are first to ensure that Canada’s transit agencies don’t waste time and money on the dead end of hydrogen or renewable natural gas buses, but instead focus on rapid deployment of battery electric buses, and secondly to assist CUTRIC to become a useful agency, I provided some guidance in a LinkedIn post to CUTRIC’s Board of directors.

An open letter to the Board of the Canadian Urban Transit Research and Innovation Consortium (CUTRIC-CRITUC).

As a gentle note, CUTRIC is facing an existential threat due to its deeply flawed and indefensible report for the City of Brampton. This isn’t a problem with the messengers, it’s a problem inside CUTRIC. This requires Board attention and agreement to the response.

Andrew S. at Talk Shop informed me and CleanTechnica that CUTRIC would be responding to my deep dives into the organization’s reports on hydrogen for transit. Transparency in a crisis is the right impulse.

The Brampton report is indefensible. Michael Raynor and I have identified a potential swing in the range of $1.5 billion over six different categories of problems in favor of a battery electric-only bus fleet. The CUTRIC report for Brampton recommended a blended hydrogen-electric fleet based on a variance of only $0.01 billion in a $9 billion estimate. The smallest of the swings we identified were that big.

Between us, Michael and I are experts on sustainability, transportation decarbonization, strategic scenario development and business casing with global experience and publications.

The report was completely silent on any confidence levels in the estimates of the three scenarios, a disqualifying flaw when the difference between scenarios was 0.1%. The report ignored the complexity of a fleet with three different technologies. The report overstated battery electric costs and understated hydrogen systemic costs, based on global empirical data which I provided clear references for in the assessments.

The report ignored carbon avoidance benefits and costs. It did not price carbon emissions related to gray hydrogen or hydrogen in general under Canada’s carbon price or social price of carbon, when emissions are substantial. It did not do a cost-benefit analysis, but solely a cost analysis.

Most problematically, it pushed all hydrogen buses so far out in time that the annual 3.5% discount rate removed 40% of their high costs.

CUTRIC has two choices.

Option 1: It can try to defend the report, nit picking at some of the points I’ve published to cast doubt on the analysis. That might be entirely reasonable if the report were flawed and we were trying to triangulate on reality. But the swing is $1.5 billion in favor of battery electric only and nit picking isn’t going to eliminate that.

Option 2: CUTRIC can treat the Brampton report as a major failure of its process and governance. It can accept responsibility for it. It can admit it failed to deliver good scenarios and advice to Brampton. It can promise to make amends. It can assert that it’s fixing governance and internal processes to avoid making mistakes like this in the future. It can follow through and deliver on those commitments.

The second option is the correct one. CUTRIC is no McKinsey, Deloitte or Roland Berger, consultancies for hire with a broad portfolio. They can downplay this type of event. CUTRIC can’t.

I tagged all Board members and asked that they ensured other Board members saw it, as all weren’t active on LinkedIn. I also provided three more detailed comments providing specific recommendations on how they should reshape their organization moving forward.

1/3 On governance.

Having a fossil fuel business development executive from Enbridge on the Board looks bad, regardless of anything else. When they tried to engage on LinkedIn, they insisted on deflecting to renewable natural gas rather than deal with anything of substance from the assessment of the Brampton hydrogen study, Mississauga pilot or other pertinent issues.

Having a fuel cell vendor on the Board is deeply questionable when you don’t have a battery vendor on the Board. Ballard has lost $1.3 billion since 2001, an average of $55 million a year, never turning a profit. They exist because of senseless trials like Mississauga’s and thrive on potential future revenue from bad studies like the Brampton one.

Having three well-funded natural gas distributors as members raises questions regarding how much money they are providing and in which ways.

Avoid even the appearance of impropriety, is a common way of saying this. CUTRIC isn’t.

I recommend having a frank debate about Board representation. I recommend a frank debate about ring-fencing members with clear agendas, like Ballard, Fortis and Enbridge, to ensure that they are restricted to basic membership dues.

2/3

On modeling.

CUTRIC has a model, RoutΣ.i™. That it’s a model, that it’s on version 3, that it has a weird mathematical sum symbol in it and is trademarked doesn’t make it right. It just means it’s a model that’s been iterated, branded and trademarked.

I recommend that all members of the Board and all pertinent employees of CUTRIC who haven’t done so read Erica Thompson‘s Escape from Model Land: How Mathematical Models Can Lead Us Astray and What We Can Do About It, then think carefully about and discuss at length the implications.

In the book, Thompson explores how mathematical models are increasingly used to make decisions in areas like finance, climate policy, and public health, but highlights the limitations and risks involved when these models are taken too literally.

RoutΣ.i™ is a model. As statistician George Box is often quoted as saying, all models are wrong, but some are useful. RoutΣ.i™ may be useful in some circumstances, but per the results from the Brampton study, it’s way outside of that zone when used for the $9 billion report.

Independent judgement is required in application of RoutΣ.i™. This was insufficiently applied in the $9 billion Brampton scenarios and report. The Board needs to fix this.

3/3

On strategy.

Richard Rumelt’s Good Strategy Bad Strategy is the best book on strategy written. I say this as a long time business and technology strategist with a global career who has read almost every book on the subject.

All good strategies have a kernel, per Rumelt. First diagnose the situation. What is really going on here? Be brutally honest about reality.

Second, establish a clarifying and simplifying policy about reality that enables the situation to be turned to gain and challenges avoided.

Third, create self-reinforcing action plans that align with both the reality and the policy.

CUTRIC has failed in this. Instead of accepting empirical reality — hydrogen for transit buses has failed globally for decades, is not improving, isn’t delivering climate wins and battery electric is superior in every significant way — CUTRIC is avoiding the hard reality that hydrogen isn’t a viable solution. Further, it’s avoiding the hard reality that CNG and RNG aren’t viable solutions.

The correct policy is that battery electric buses are the right answer and CUTRIC will focus its attention on addressing the comparatively minor issues of overcoming operational and fiscal challenges with them. CUTRIC fails on that.

Over the past three weeks, I’ve had brief interactions on LinkedIn with the Board member from Enbridge and the Board member from perpetual money loser Ballard Power. They couldn’t restrain themselves. As noted, the Enbridge representative refused to talk about the credibility-destroying, $1.5 billion off report for Brampton, but wanted only to talk about renewable natural gas. I provided my standard answer, not realizing who they were initially, which was that renewable natural gas was a serious climate change problem that needed to be addressed, required as an industrial feedstock to decarbonize things like methanol, and a rounding error when it comes to transportation fuels. They tried insisting that I provide them credible studies, so the 4,400 word article on renewable natural gas being exactly what I said it was is a response to that.

The Ballard marketing executive who is on Ballard’s Board tried to defend Ballard and fuel cell transportation at some point. Someone else created a fake LinkedIn profile, claiming to be a Deloitte sustainable transportation consultant based in Vancouver, but had zero educational history, career history or comment history outside of their attempt to defend hydrogen fleet failures, and were not findable outside of that one fake account on LinkedIn. My assumption is that it was a terribly weak and amateurish effort by Ballard, who are based in the Vancouver area. When I pointed this out in response to their comment, they deleted the fake LinkedIn profile and the comment.

But, finally, CUTRIC provided an official response. Did they take my carefully considered guidance on how to respond? Did they deal with the clear, numerically laid out $1.5 billion swing for battery-electric only for Brampton with referenced, numerically laid out justifications for why their report and scenario modeling was appropriate.

Sadly, no. The actual response? Here are some direct quotes:

•  “Ideology, angry rants and identity politics”
• “angry online postings on LinkedIn”
• “one-sided approaches”
• “a slew of online hatefulness”
• “destructive narrow mindedness”
• “attempts at personalized defamation and character assassination”

They do, of course, identify me by name in this response, while I was careful in my articles to not point fingers at individuals by name, just roles and organizations.

There’s more to CUTRIC’s response, posted as an article on LinkedIn entitled Setting the Record Straight on the Strategic Role of Hydrogen in Canada’s Transit Future, published under the profile of Dr. Josipa Petrunic, founder, president and CEO of CUTRIC on November 8th.

The arm-waving phrases “holistic view,” “vacuous arguments,” “power of the human mind,” “broader framework of total cost of ownership,” and more appear in the response. At no point are any of them quantified of course, and when the swing is $1.5 billion on a $9 billion scenario assessment that claims to be a total cost of ownership scenario, they are meaningless.

The response does assert that “not even renewable natural gas – is the ideal solution in all circumstances all of the time,” when the published 4,400 word piece destroying the premise of natural gas as a scalable, low-carbon bus fuel makes it clear that it’s never the solution any of the time.

Quite a lot of time is spent talking about battery-electric bus failures in general, without providing any references.

I urge readers to read Petrunic’s response. It’s a case study in how not to respond to the PR disaster that CUTRIC created for itself. I had this conversation with a recovering PR professional in Brussels a couple of weeks ago when I was there speaking at a book launch on European transmission strategy and global competitive with other speakers, including a European member of parliament and the Belgian energy minister. They agreed the guidance I’d provided CUTRIC was textbook, and we discussed the Tylenol tampering incidents of the early 1980s and the not perfect response by the then CEO to immediately order a recall. Their response to CUTRIC’s response? SMDH, or shaking my damned head.

It’s understandable that Petrunic would be defensive of the model which she created and has overseen three iterations of. It’s understandable that she would be defensive of CUTRIC. However, that’s irrelevant to good governance of a transit think tank and good results from its reports and studies.

CUTRIC has chosen its path, and unfortunately it’s the wrong one. They have chosen to defend the indefensible and double down on inclusiveness of non-starter solutions such as hydrogen and renewable natural gas. Their modeling competence for scenario-based assessments such as Brampton is clearly lacking, and they also clearly aren’t going to fix that. Their assumptions related to current and future costs of both hydrogen and battery-electric buses are simply wrong, and they aren’t going to fix them.

For the foreseeable future, they must be considered to be a non-credible provider of information and assessments of transit. Global experts and thought leaders such as David Cebon, the founder and director of the Centre for Sustainable Road Freight, professor of mechanical engineering and road expert at Cambridge, host of an annual, global conference for the past decade related to road transportation decarbonization, and founding member of the Hydrogen Science Coalition, agrees and has said so publicly.

As a note to paying members of CUTRIC and to Board members, you should reconsider your affiliation with the organization. It’s not aligned with empirical reality, is giving bad guidance to transit agencies, and when the hydrogen buses inevitably fail to deliver reliable, cost-efficient, low-carbon service, CUTRIC will be blamed in the ensuing finger pointing. At least enough of CUTRIC’s governance is aligned with these bad choices to enable the formal response, so it’s unlikely that if you are appalled by the situation — as you should be — that you will be able to move CUTRIC to an effective position. There are other ways you can serve effective decarbonization of transit in Canada.

Until CUTRIC comes to grips with its governance problems, process failures and modeling incompetence, it should be ignored.