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DAC, MOF-GPT, and Geothermal Technologies' Jim Hollis
112 Plays2 years ago
Is direct air capture a crucial part of stopping climate change, or merely cover for oil and gas companies to keep drilling? Can ChatGPT help scientists invent a new material? What's the deal with sailboats? We discuss all this and more, and are joined by Jim Hollis, the COO of Geothermal Technologies, to learn more about the future of geothermal energy.
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Transcript
Introduction to Podcast and Hosts
00:00:12
Speaker
research's sustainable innovation podcast, Innovation Matters. It is the only podcast that is able to successfully navigate the Zencaster interface and record. I'm Anthony Schiavo, Senior Director at Lux. I'm joined by my colleagues, Karthik and Mike. Karthik, how you doing?
00:00:34
Speaker
Yeah, I'm doing great. Thanks. This weekend, we have had a lot of stuff happening. You know, India landed on the moon, Burn a Boy released his new album. Excited to listen to that. Two events of equal importance in, I think, the global geopolitical landscape. Exactly. Mike, how are you? Doing well. Enjoying the lack of heatwave in New York this week. It's been like highs of 75 and stuff after it's been got awful hot all summer.
00:01:03
Speaker
Climate's still fucked, but at least we're doing okay for this week. If it wasn't raining here in Boston, it would be super nice. We have a ton of news, a ton of things to talk through this time, so I think we should get right into it.
Debate on Direct Air Capture (DAC) Technology
00:01:20
Speaker
I wanna start with a recent announcement from the US here. The US DOE, the Department of Energy, has announced 1.2 billion in funding for direct air capture hubs, the first direct air capture hubs in the United States. So if you're not aware, direct air capture, that is direct air capture of carbon dioxide, the idea is we're gonna take a big vacuum cleaner, we're gonna point it up
00:01:47
Speaker
into the air and we're going to suck all the carbon emissions out of the atmosphere. DAC, I mean it's one of the more controversial sustainable innovation technologies for a number of reasons. It's controversial I think because there are a lot of
00:02:08
Speaker
people just saying it won't work, that it's kind of a fake technology or a fake solution. The costs of DAC are notoriously much, much higher than the costs of say point source carbon capture. And there's also a lot of, I think,
00:02:24
Speaker
concern that this is a greenwashing effort by large oil and gas companies in particular. And we see that this first hub, Occidental Petroleum, is one of the recipients of this work, or this funding, I should say. And in general, this is a technology that oil and gas companies have invested in fairly significantly. On the other hand,
00:02:53
Speaker
We do need to get carbon out of the atmosphere, as I think this summer shows. The impacts of this are pretty real. So I'll kick it over to you, Mike, first and ask you what your reaction is to this news and just how are you thinking about DAC in general? I'm thinking about DAC in general as something I think it's really
00:03:22
Speaker
important to be pursuing. It's very, I think it's still unclear to me what kind of role it's going to play in the future of the, you know, the energy transition and the climate solution here. If it really is, which is, you know, this is the reason this project is, I mean, I think the risk's the risk behind it, right? Great to move carbon from the atmosphere. The risks are
00:03:49
Speaker
it's just going to give people permission to keep emitting because they will be able to say, these emissions are being offset, which is true. But we need to be really doing both, like cutting the emissions and taking the carbon out of the air, not either or. And I think Occidental's
00:04:13
Speaker
CEO has even made some comments about, oh, this is what's going, this gives our industry a license to continue to operate for the 60, 70, 80 years. A license to continue to operate. A quote from the, right. And the other, of course, the question of what are you doing with the carbon dioxide and what Occidental is doing with
00:04:38
Speaker
carbon dioxide is using it for enhanced oil recovery. They are injecting it into oil wells in order to get more oil out of them, right? Drill, baby, drill. So that's obviously not particularly in service of transitioning the economy away from fossil fuels. There's obviously a case for it
00:05:00
Speaker
As far as you know, we are going to continue to need oil for the foreseeable future At least in you know for the next in in some quantities for plastics for fuels and you know, we aren't Going to transition away from it next year and if we're going to be producing some amount of oil it's you know better to sequester carbon while we're doing it then then not but
00:05:25
Speaker
I do think the worries that this kind of approach can slow the overall momentum for decarbonization are not totally unfounded either. Yeah, for me, I think I don't cover DAC so much, but we, of course, get a lot of questions at Lux Research on DAC and on our list. Mukunda has a very good technology hub on it, which, of course, our clients should be reading if they have it.
00:05:53
Speaker
And I think the cost of DAC is something that caught my eye when I was just going through what we have. Specifically looking at the fact that you need significantly low cost renewable electricity. So I think the price of DAC is one of the reasons why it's not taken, let's say, or to rephrase, I think that's one of the reasons why people are still against DAC. I guess it's the costs more than
00:06:22
Speaker
whether it can successfully capture carbon, I guess. Would I be fair in that assessment? Yeah, I mean, there's definitely an economic question as well as the sort of climate system questions that I was talking about. Is this just going to be an expensive boondoggle is not entirely clear yet if that's false. I think it will be an expensive boondoggle. I'm all in on DAC being a frigging boondoggle. I'll be where which are right now.
00:06:52
Speaker
I mean, I basically think that we have a very clear cost curve that we can move down in terms of investing in things to capture carbon. And I don't think there's a particular, you know, there's this argument that we need carbon removal from the atmosphere in addition to carbon emissions reduction.
00:07:17
Speaker
But until we run out of sources of emissions reduction, I don't think that's actually true. Removing a ton of carbon from the atmosphere is just as valuable as preventing a ton of carbon emissions from going into the atmosphere today, in my view. And we can do the prevention for $100 a ton or less in the case of switching from, for example,
00:07:46
Speaker
coal to renewables, or put in carbon capture on the various industrial facilities. There's a ton of options. And DAC is like $800 a ton, like you kind of mentioned, Karthik. And it doesn't make any sense. We could spend a billion dollars here on investing in early stage geothermal, right? I think, as our guests do later on in this podcast, would definitely appreciate.
00:08:13
Speaker
So there's so much we can do with a billion dollars, like a billion dollars is a lot of money, right? I'm much more sympathetic to this type of early stage activity if it's R&D level, right? The fusion stuff, if it's really high potential. And I don't see DAC as being high potential. I mean, you're still going to be paying a lot of money to remove carbon dioxide, even in a very positive case. And I don't, you know,
00:08:42
Speaker
There's just so much better things we could be doing in our money. And I'm also, I don't know, go ahead. Yeah, I was just thinking maybe if it's high potential or not, I would still call it high potential. I was just thinking about Greta Thunberg's The Climate Book, in which she actually paints a very gloomy picture.
00:09:04
Speaker
of what's going to happen. And I think in her book, or what my understanding of what's provided in the first few case studies is that you've got to stop emitting carbon today and keep capturing carbon out of the atmosphere as much as you can. And only then you have a better chance of actually hitting net zero. And if you want to think about, let's say, if you were to get one wish
00:09:27
Speaker
to do that, and I guess you would take the direct capture wish, wouldn't you, at this stage? So I think it's a bit harsh to say that is not high potential. No, I'm a hater. I'm a hater.
00:09:41
Speaker
It's just the politics of the technology are bad too. You already heard the Occidental CEO say, this is a license to admit. And I think it's a questionable role of the oil and gas companies in the energy transition anyway. I think they need to have a very carefully considered role, at the very least, in terms of how they should be allowed to play and how they should be allowed to benefit.
00:10:10
Speaker
I think if you have a technology that says, hey, we can keep drilling, that's a bad technology. We need to stop drilling. But it's the politics of it. It's a bad technology for the climate math, but it's a good technology for the politics, at least in the US. It makes it a lot easier to get buy-in from all the political stakeholders you'd want to have buy-in for.
00:10:37
Speaker
I'm not really a big fan of this project. I'm not as much of a hater on DAC in general. I think there is a role for that to play in helping to keep and ultimately bring down carbon levels in the atmosphere.
00:10:54
Speaker
in the longer term, but this project is not really ideally the way you'd want to go about it, but I do understand the political calculus behind this is a way to get support for stuff like for the IRA in general and to try to accelerate that learning curve and cost reduction for DAC for the future.
00:11:18
Speaker
It is a good way to reduce carbon emissions, putting sales on boats, and that's our second news item. Karthik, do you want to introduce our audience to, what is it, Pixis? What's going on?
Innovations in Maritime and AI Tools
00:11:34
Speaker
Mitsubishi Corporation, along with three other companies, including Kaggle, they have
00:11:40
Speaker
essentially installed these massive metal sails. They're about 37.5 meters tall on the ship called the Pixis Ocean. It's a commercial maritime vessel. And the objective is to essentially go back to the past to decarbonize shipping in a way. So these masts, they have flaps. They're essentially aerofoils and you can turn them, you can fold them.
00:12:09
Speaker
based on when you want to use them. And essentially, you decarbonize shipping by using a mast. It sounds pretty boring from the outside. And it's like, hey, you just have a tall metal structure. But I see a lot of positives from this, genuinely. But your thoughts first on what you think about this development.
00:12:28
Speaker
Yeah. I think it's about a 30% emissions reduction that they're targeting. I love this. This is great. I love it because it's dorky. It looks really, really, really goofy. Indeed. Because it's basically a big vertical wing. It really is a wing in that sense, or a combination of wings on the ship.
00:12:50
Speaker
But yeah, it's good. I mean, there's so much wind energy in the specifically like the lower, lower hemisphere, right? If you think about that band of sort of connected ocean there, there's a reason why when
00:13:06
Speaker
My dad's a big sailboat racer and he, you know, when they race sailboats around the world, they go straight south, they catch that wind and they go all the way around the globe as fast as they can because there's just so much power there. And so, you know, there's just a lot, there's a lot of energy out there that we could be capturing, right?
00:13:25
Speaker
Like I said, this actually does reduce emissions. I don't know. Maybe I'm a, maybe I'm missing something here, but everyone, I feel like was clowning on this and I thought it just made sense. I mean, shipping emissions, I think are equivalent to the eighth or ninth largest country in the world in terms of total emissions. It's a huge deal.
00:13:47
Speaker
Like, what do you think? Yeah, it's definitely, you know, it's definitely an incremental solution, right? You're not it, but you know, it's a big increment, right? What did you say it was 20, 30%? So 20, 30%. And you can combine it. The thing is, you can combine it with anything, right? Exactly. It's a sale on the bottom. It's complimentary, you know? Yeah, it's very complimentary. Yeah, I used to, you know, do this whole riff about, you know, in
00:14:13
Speaker
kind of the earlier years before electric vehicles were maybe the dominant solution, clearly dominant solution for vehicle emissions reduction that they are today. Talk about electric vehicles, hydrogen vehicles.
00:14:32
Speaker
biofuels, right? We can say, well, regardless of which one of these solutions you think is going to win out, like things like tribological coatings or things that are going to improve the efficiency of the car are going to be really useful regardless.
00:14:46
Speaker
I think that's the case here. Whether you think we're going to go with ammonia or methanol or whatever for decarbonizing shipping, putting these weird looking sales on the top is actually a pretty good idea, especially if those kind of savings numbers really prove out in these commercial deployments.
00:15:08
Speaker
Didn't that like turn out not to be true though with the tribological coatings? Like, you know, the tribological coat, it wasn't as big an impact as some people might have. But you know, if you can improve the, you know, reduce the losses to friction, that's, yeah, that's always good. Yeah. The, the interesting aspect of the sales for me is it's so cost effective and it's such a short term solution for anyone who owns, uh, shipping assets and they want to decarbonize, uh,
00:15:37
Speaker
Maybe the implementation could be a bit challenging because if you look at the pictures, the masts are actually installed on one side of the ship because you don't want it to be in the line of sight.
00:15:49
Speaker
At the end of the day, you might need counterbalances on one side to prevent the ship from being unbalanced, stuff like that. It's also possible because the masks are using fiberglass and steel, and it is a composite blade. I think people will start questioning, oh, if this is green enough, you need to start recycling and all that. So I guess there might be a little bit of issues there, but at the end of the day, if you were to score it in terms of how positive this is, it's a pretty positive development for me.
00:16:20
Speaker
Right. This is a perhaps the first innovation matters approved technology official. Universal innovation. The official innovation matters seal of approval here. Let's talk about something that may or may not get the official innovation matters seal of approval. That's MOF, MOF GPT. What is this, Mike? You brought this up.
00:16:45
Speaker
Yeah, I thought this was really interesting because, you know, there's, of course, since since the launch of chat GPT, we've been getting a ton of questions and thinking a lot about what are the implications of this for for innovation and for, you know, for R&D and research. And there was a really kind of interesting implementation of that, that the published that that came out in the paper this week out of
00:17:10
Speaker
Omar Yagi's group at Berkeley, he's one of the leading experts in synthesis of metal organic frameworks, MOFs, which have a lot of climate relevant and other applications. They could be used for direct air capture. They can be used for other types of carbon capture. They can be used for
00:17:30
Speaker
absorbing water out of the air for hydrogen storage. So a lot of interesting applications for this class of highly porous materials, essentially. But they're really difficult and really expensive to synthesize.
00:17:45
Speaker
And what his group worked out is a way to do some prompt engineering with chat GPT to make it apparently pretty good at suggesting synthesis conditions or outputs from synthesis conditions for a bunch of different MOF compositions. It's attractive because if you can just do this with chat GPT, you don't need somebody who knows, has a lot of coding skills in order to
00:18:15
Speaker
to succeed at it. But the part of it that was interesting to me is the prompt engineering, and that's a term of art now in working with these kind of large language models, is you have to pose the question to it in sort of just the right way to get the right results. And in particular, these models have a tendency to what researchers call hallucinate.
00:18:44
Speaker
Like if you try to give them something stuff up, it just makes the fob and there's funny examples. There's even like a legal one or these lawyers got to write a legal brief for them. And it.
00:18:58
Speaker
They made up a bunch of citations. If you do a legal brief, you say, yes, my citation, you know, my interpretation here is supported by the, you know, Fourth District Circuit's courts ruling in, you know, whatever, you know, Mackenzie versus Velasquez, 1997 or whatever. And so put a bunch of these things in that were just completely fake cases, like totally made up.
00:19:19
Speaker
Because it's just trying to come up with something that fits the pattern. It doesn't understand which parts of it need to be novel. And then the guy went back. The judge asked him, what are your sources? And the guy went back to chat GPT and asked chat GPT, what are your sources? And it just invented a bunch of sources for him. Yeah, it completely wrote the whole curriculum. Yeah, it doubled down on it.
00:19:43
Speaker
itself too. It's a very funny story. But it can do this too. If it doesn't have basically a good answer from the sources it's supposed to be using, it will just kind of make one up to sort of fit whatever it thinks is missing. And I was actually asking, I was talking to a client in
00:20:04
Speaker
in the office a couple of days ago as a CTO at a specialty chemical company, and he was asking about this. It's like, how big of a problem is this sort of hallucination behavior with these large language models? It's like, well, actually, according to these researchers, for MOFs at least, it was a pretty significant problem that they needed to try to kind of engineer their way around.
00:20:29
Speaker
Yeah. I mean, I think there's a couple of interesting things here, right? Because one, there's the issue of hallucination of itself and the fact that it seems really difficult to get these ML, you know, GPT models to stop lying in general or making stuff up, right? Like that's really, really, um,
00:20:58
Speaker
going to be a limiting factor, I think, in a lot of use cases, especially a lot of the academic and the more scientific use cases, right? And I think it also kind of puts into contrast the programming use cases because the programming, if the code doesn't work, the code doesn't work. And it's actually really straightforward to like understand. It's so like outcome driven that it's like fairly sort of
00:21:25
Speaker
easy to navigate around these types of issues. And there's so much data and innovation and structure in the backend that you can be relatively confident that the thing is going to work the way you want it to work. My buddies who are programmers tell me that the tools that are already developed are insanely useful and really changing the game there. But for something like this, where
00:21:47
Speaker
I mean, if you're just researching new MOF types and it doesn't work, I mean, it costs you a little time, but it's not that big a deal. But if you're using this- Graduate student time is very, very cheap and worthless. This is true. This is undeniably true. But if you're asking it, hey, is there something out there that we're missing in terms of some approach or for drug development or any of these things?
00:22:14
Speaker
The fact that you can't trust it to me, it's a pretty big deal. That's a pretty big, I don't know, point of failure, right? I actually didn't know that prompt engineering would be a job or an occupation at some stage. I thought you could just type a question and then it's going to give you an answer. Unfortunately, it's not a straight forward. Oh my God, it's so painful.
00:22:42
Speaker
It's a skill that people will need. And, you know, I think this paper is sort of, it's optimistic in that it does show ways that you can make these tools useful and, you know, they'll continue to improve. They'll probably get better at the hallucinating, you know, just the underlying models will get better at avoiding the salucination behavior.
00:23:06
Speaker
But yeah, people are going to have to, you know, it's not quite as simple as, you know, even if you're not a programmer, you can just ask you questions in normal language and like, yes, you can, but you need to know how to do that kind of like in just the right way to make sure it's not going to, to give you something that's, that's bad and fake.
00:23:26
Speaker
Well, if Chad GPT turns out to be the research tool of the future, you will undoubtedly hear about it here on the Innovation Matters podcast.
Geothermal Energy Exploration with Jim Hollis
00:23:37
Speaker
We're now going to go to our next section. We have a great interview all about geothermal. So we'll leave it there.
00:23:54
Speaker
Hello and welcome back. And we're delighted to be joined by Jim Hollis. He is the COO of geothermal technologies, his long background, long history working in seismic imaging, and now in his most recent venture,
00:24:10
Speaker
is working on geothermal energy. It's something that we've discussed a couple times on the podcast already. And we are really excited to have Jim here with us to chat more about geothermal and really the future direction of this space. So Jim, how are you doing? I'm doing great. Thank you.
00:24:30
Speaker
It's our pleasure. Why don't we start, maybe you can give a bit more complete introduction about yourself, but also geothermal technologies, what it is and what the company does. My background, I'm a geophysicist. I very much have been focused on the technologies needed to explore for different
00:24:51
Speaker
resources be it oil and gas or mining and for the last five years I've been focused on geothermal because it's just this amazing power source that we have. I mean we're living on a planet that is this giant battery. The center of the earth is actually hotter than the face of the sun so and that heat was formed when the planet was formed but it's also the radioactive decay and and it's
00:25:20
Speaker
super hot. So how do we tap into that heat and make power that's clean, carbon free, baseload, all the things that we need? And that's what we've been focused on. So the company was actually spun out of Johns Hopkins about five years back. They had been working on
00:25:39
Speaker
ways to harvest this power and we were myself and the CEO were brought in to commercialize it and so we've been working hard on that and we came out of stealth mode about 12 months back where we're out getting ready to build our first system actually in the Denver area and so that's a little background.
00:26:02
Speaker
Maybe since you mentioned it, a good place to start. This is the Innovation Matters podcast. And one of the things we're interested in is the kind of the sausage of innovation getting made. So what was that process like when you were sort of at the very early stages? Did they reach out to you? Did you reach out to them? How did the combination of the founding team and the technology come together? And was that process smooth? Was it bumpy? How would you sort of describe that process?
00:26:32
Speaker
Yeah, I thought it was fairly smooth. I mean, the technology was envisioned by this guy by the name of Dr. Bruce Marsh. And he's a Renaissance geoscientist extraordinaire. And he and a group of other scientists were really worried about climate change and how do we tap into geothermal. And they spent a lot of time looking at
00:27:02
Speaker
all of the efforts that had been gone into by the DOE and others of going after this power. And he basically came to the answer that one of the things that was missing was convection, which is a really super good way to transfer heat. And to have that, you needed to go after fluid. And so let's go after the fluid that sits at the bottom of oil and gas basins.
00:27:31
Speaker
So, he had all this, but he didn't really have a way to commercialize it. So, I was invited in via my network. They knew that I had done startups and I've run big businesses and things like this. And I was brought in at the same time as the CEO.
00:27:51
Speaker
who is there now, we were both brought in to run the company. And we ended up finding that we had synergies and we decided to do it as a team. And so it was pretty straightforward. We built the business, we launched it, we raised C funding, we're in the process of raising our third round right now. But both of us had done startups, so it was pretty clear the path that we had to take. And so it was,
00:28:20
Speaker
fairly smooth, actually. And so that's how we got here. It's interesting you mentioned convection, because typical geothermal is usually passing a working fluid over hot rock. And then you just take the heat out. And if you think about geothermal as a technology, people just go, okay, you drill into the ground.
00:28:43
Speaker
You have this hot, as you mentioned, the earth is a giant battery. You just access this heat, you produce steam, the steam runs a turbine, electricity, boom. And so from the outset, it looks like, well, geothermal has no innovations, exactly, right? Yeah, but it's a little bit more complicated. Everything's a little bit more complicated. Of course. So let's take a huge step back and say, all the geothermal power that's being generated right now,
00:29:13
Speaker
which is about 17 gigawatts, comes from natural systems. And these natural systems are in very unique geologic areas, like the geysers field in California, Hawaii, Iceland. And if you take a step back and you look at those systems, they're made of three things. There's a heat source,
00:29:44
Speaker
there's a fluid, which is the mechanism to transfer that heat from deep in the ground to the surface, and there's a plumbing system. And so there is a big group out there who are looking at this geothermal anywhere, hot, dry rock. Like you say, you just drill into the earth until it's hot, you pour water down there, you bring it up, you make steam, there you go. The problem is rock is a conductor.
00:30:12
Speaker
So when you pour cold water on hot rock, it cools it off. I'm sorry, it's insulator and so you cool it off. So if you're gonna be mining that energy from that rock and the heat transfer mechanism is conduction, like an electric stove, that cold water will cool that rock off and it'll take geologic time to heat it back up.
00:30:39
Speaker
So the trick is, how do you mine that energy? How do you build a plumbing system that doesn't cool the rock off? And so what we found is, instead of just drilling into hot rock, that's the heat source and then you build a plumbing system and you add water. We're saying let's go after a existing reservoir of hot water
00:31:08
Speaker
and just build the plumbing system. So it simplifies and de-risk the whole thing. And core to the technology that we have is we figure out if we build the plumbing system right, we can generate a convective recharge field that makes these things last for decades. They don't cool off. We're just mining this hot water that has been sitting down there.
00:31:28
Speaker
And because you're mining this for decades, you get to depreciate the cost of building these things. And it brings the cost of power way down. And so I've always liked stuff that's better, faster, and cheaper. And this checks all the boxes. And so that's what's different kind of about what we're doing versus the normal experimental stuff that's going on with the DOE now in this hot dry rock area.
00:31:58
Speaker
Can you touch on the costs a little bit more in detail? Because I think one of the sort of common pieces of perception around geothermal is that it's really high upfront cost. And I know there's a lot of different approaches. So how are these innovations tackling this issue of cost or bringing that cost down?
00:32:18
Speaker
Yeah. So, um, there's up front costs in how you build the below ground system. So that's drilling and, um, things they do in the oil and in gas business. And then there's the upright cost of the power plant, which is the above ground. And that's the organic ranking systems and things like that. Um, the above ground power plant doesn't cost any more than a coal plant or a gas plant or all those sorts of things, but the added benefit that there's no cost of fuel.
00:32:49
Speaker
So the trick is to cost effectively build the underground part. And kind of why now with what we're doing is that we're leveraging all of these advancements that the oil and gas guys have made in lateral drilling and completions associated with these shale plays that have brought the cost of drilling and the time of drilling down in a significant way.
00:33:16
Speaker
And so that's brought the cost of the below ground down. And again, the entire system, because it lasts so long, 20 years, 30 years, 40 years, even if you depreciate it over 10 years or five years, you're still making money.
00:33:31
Speaker
at costs of power similar to coal. And it's green in its base load. And it's sustainable. I mean, the Earth is cooling off five degrees every billion years. So that battery's not going to run out. And so the innovations that, in my mind, are behind kind of why now.
00:33:59
Speaker
It's three major things. So one is the ability to make power from cooler water. So this is these organic rank-and-style binary, binary-style sort of power plant systems, where you cycle an organic fluid above the ground in a closed system. And that organic fluid might boil, instead of 100 C like water, it might boil at 75 C.
00:34:22
Speaker
So you can make power from cooler water. So that's key. We don't need the ultra hot Yellowstone bubbling stuff, right? The second thing, or the innovations in the technologies that the oil and gas guys have, both in drilling these lateral wells
00:34:44
Speaker
very quickly. You can drill a two mile down vertical, one mile horizontal well in the Denver basin in under six days, right? So that cost has gone way down.
00:34:59
Speaker
And it's not only the technologies in drilling, but it's the seismic that we can use to figure out what the permeability of these aquifers are and all that sort of stuff. So we get to use that, plus we get to use billions of dollars worth of oil and gas data that give us the geologic information that we need for free. But the third thing is machine learning in the cloud. We can take an enormous amount of data
00:35:27
Speaker
access major amount of CPU and help to de-risk what the geology is doing by scraping all that data and integrating it and figuring out where these sweet spots are. So that's kind of the one thing.
00:35:47
Speaker
I think if you had asked me before this conversation, I would have said, yeah, there's been this share revolution, there's been all these technologies developed. But I wasn't aware about the data aspect or the cloud aspect. And I think that's one of the things you hear a lot and you see these headlines of like,
00:36:02
Speaker
I think I saw a headline today that was like, company raises $50 million to extract lithium with AI. And I was like, you know, joking around like, yeah, they're going to do linear till the AI like precipitates out, right? It's just going to be like, you know, it's interesting to hear you say like, actually, this, this sort of big data thing is really important. Can you just talk a little bit more about how that's being used to do risk these operations? Or what the opportunities are? So, so there's two places where
00:36:32
Speaker
we're using it. One is looking across an enormous amount of data that's been generated by going after the oil and gas. So there's the oil and gas window, say, in the Denver basin, where they're extracting oil and gas. We're below that. We're in this hot briny aquifer that sits below the hydrocarbon window. But we get to use not only all the information they've used to understand
00:37:02
Speaker
the structure and the geology for the oil and gas window, there's actually data down where we're looking because that's where wastewater is injected. And so there's a lot known about the geology down there. And so we scrape all this data, it's available both
00:37:22
Speaker
publicly because when an oil and gas company drills an oil well, that data gets uploaded into a database that the public gets to see. We can scrape it from there, but we also have partners in the oil and gas world who are very interested in the power that we would generate to help electrify their fields and go net zero as fast as they can. There's a real synergistic relationship
00:37:52
Speaker
with the oil and gas operators. And so we take all of that data. It's an enormous amount of data. And we look for patterns where we have, say, a borehole. We can say that the permeability is this and the fractures look like this and this is a sweet spot. Let's use all this other data to extrapolate it.
00:38:17
Speaker
And that is a super powerful application of machine learning for us. We're also looking at some of these large language model things where we can go out and scrape
00:38:33
Speaker
different papers that have been written about different things in geology. For instance, we're looking at a place in Africa right now where there's not a whole lot of oil and gas operations, but there's lots of research papers that have been written that are estimating what they think that the geothermal gradient is, how high, at what depth, and
00:38:57
Speaker
aquifers and the permeability and all the stuff that we need. It's really hard to just kind of sift through that stuff, but if you can have AI helping you and chasing down not only the key information in those papers, but the references, that's super helpful as well. Yeah. It's interesting you talk about the extrapolation aspect. I feel that when you talk about geothermal in general,
00:39:25
Speaker
as you mentioned with conventional geothermal, it's geographically restrained. You can't tap it everywhere, right? So do you see these innovations in geothermal pushing that boundary to say, you know what? We can access geothermal universally, maybe. Yeah, that's a great point. So we're right in the middle between
00:39:48
Speaker
the small amount of geographic locations where conventional geothermal works, and these guys that say that geothermal anywhere. So we're more like, yeah, we can scale this in an enormous way. Pretty much any place where you're extracting oil and gas, it means that there's a basin and there's heat, because that's how the oil and gas formed, and there's one of these aquifers. So if you take a map, say, of the US and see
00:40:15
Speaker
Colorado, Oklahoma, Texas, California, you know, those are all candidates for this hot sedimentary aquifer approach that we're doing. With that said, it won't allow you to do geothermal power everywhere.
00:40:33
Speaker
But it's going to sure open up and scale geothermal power where it's being generated now at least in order of magnitude or more. And what's wonderful about these things is we know the heat's there because the oil and gas formed.
00:40:51
Speaker
we know that there's a basin that we can get down deep enough and we know there's aquifers down there and all these sorts of things. And we know that because of oil and gas operations. And the amount of aquifer, the geographic area that we need below the ground is really not that big.
00:41:17
Speaker
The anomaly that we're looking at in the Denver Basin just outside of Greeley is, gosh, it's under the ground. It's probably 30 square miles and there's probably 300 megawatts there for 20 years plus. And above ground, if you've ever seen one of these organic ranking power stations, they're small.
00:41:42
Speaker
because you connect all the pipes and there's no steam, there's no exhaust, there's no sound. And so the environmental footprint's extremely small.
00:41:59
Speaker
Maybe that discussion of environmental footprint is a good pivot to kind of the big question of policy and government relation here, because obviously power sector is very policy driven, and especially innovation in the power sector is very policy driven. So I guess I'm just curious, on a high level, you mentioned that there are all these opportunities anywhere. There's an oil and gas well.
00:42:24
Speaker
What has been the reception? Do you see governments worldwide? Are they interested in geothermal? How are you seeing that perception right now? And then I want to touch on some of the US specific dynamics, because I think there's a lot to answer. Great question. Yeah, no, very positive. I mean, there's been a lot of renewed interest in geothermal for the last few years. And
00:42:48
Speaker
different approaches to technology. And so, and the sort of feeling that I'm getting is, you know, if I'm in an emerging sort of country, I want to develop my own gas resources in parallel.
00:43:08
Speaker
with sustainable renewal. And what our approach gives you is this kind of evolutionary step rather than a revolutionary step, right? And so that's what we're seeing. And it's more of a kind of a longer term, we'll taper off of the fossil fuels as we taper into this, but let's use this for power.
00:43:30
Speaker
The other thing that we're seeing a lot of is it's not just grid operators, it's behind the meter folks, folks who are interested in making hydrogen.
00:43:47
Speaker
the crypto mining. I mean, there's data centers. And so there's quite a bit of interest behind the meters as well as grid operators. Now we'll get to the US. They've made a lot of promises that these goals out there in
00:44:06
Speaker
10-15 years if they're going to be net zero or better and coal plants that they have to shut down providing base load power. They can build big batteries, they can install solar, they can sell wind, but geothermal gives them this
00:44:24
Speaker
this carbon-free baseload power source that really helps the equations. And then, so there's a lot of pull. And there's a lot of pull even in places which have historically been very oil and gas minded.
00:44:48
Speaker
Yeah, I was going to ask about that. We'll start there. In Texas, there was this law that almost passed or was contemplated that would have raised significant restrictions on wind and solar, despite the fact that Texas is absolutely booming in wind and solar. It's booming, yeah. I don't know who was asking for this, but it was a political push to
00:45:15
Speaker
to really levy some restrictions on that. So I guess in terms of, there's a number of questions I want to ask related to this. I guess the first one I'll sort of ask is, this is a technology that really relies on the expertise and the knowledge of oil and gas companies, right? But the role of oil and gas companies in the energy transition is a little controversial. I mean, you've got Green Town Labs here in Boston, they invited Saudi Ramco onto their
00:45:42
Speaker
their board or whatever the relation was, and, you know, they got blasted in the news. Oh, this is greenwashing. You're just helping oil companies make more oil. I guess how do you think about that in the context of geothermal? Maybe specifically, is that a challenge? Or, you know, is the accusation of greenwashing? Is this something you worried about? And then a bit more broadly, I'm just curious for your thoughts on what the role that oil and gas companies should take in this next 20, 30, 40, 50 years of the energy transition.
00:46:13
Speaker
Great question. I think it's a mixture out there. I think some of the companies are greenwashing, but others are recognizing that this could be a very good business line for them.
00:46:33
Speaker
It complements their current business. They get to reuse their data, which is something that they all have. And it's very powerful. It's worth a lot, all the information that they've garnered. They get to reuse their skill sets. And I've also heard that they can actually recruit
00:46:55
Speaker
new folks, young geophysicists now with a promise that we're not gonna be the evil oil and gas guys, that we're also gonna do geothermal. So our approach is if we can show how they can make money doing this using their data that they already have, even their drill pads and their formations and stuff like this, this makes a lot of sense to compliment
00:47:23
Speaker
their businesses, right? And so we're all about longevity, which translates, we're all about cost. How do you bring the cost of power down so they can make money when they do it? So that's, I mean, so that's kind of the, we're feeling some pull from the oil and gas operators. They're not fighting us. But we're really seeing
00:47:51
Speaker
the pull are from the oil field services guys like the drillers and the folks who do all the completions below the ground. They're seeing this as a whole new business line that again complements what they already had know how to do really well.
00:48:10
Speaker
And so we're feeling a lot of pull there. And they're seeing this as, yeah, this could be a really big business that complements all the other business. So it's a pivot for them.
00:48:24
Speaker
Without a revolution, it's more of an evolutionary sort of thing. We can add this as a business line. We can drill geothermal wells. We can do the completions of these things. Even so that they're working on new binary technologies like organic ranking above the ground to improve the efficiencies of making energy from cooler water, which is key.
00:48:49
Speaker
I don't know if that answered all your questions. No, that's very interesting. I think it's good that you brought up the.
00:48:58
Speaker
the issue of hiring, because this is something I think we've been hearing more and more about. I mean, even in my, you know, my background is material science. And when I was an undergrad, which was not that recently, unfortunately, you know, we heard about constantly like for steel mills is a very similar issue. They had huge grants and huge scholarships every year that would go unfilled because people didn't want to work in a steel mill anymore.
00:49:24
Speaker
And that was a lesson of an environmental concern, more of a sort of, I don't know, industrial hotness, attractiveness concern. But that was still a time back then when being a petroleum engineer, I think, was really attractive. That was one of the things that young engineering students wanted to do. And I talked to some of the people we hire at Lux these days. And it's like, there's no interest in working for an oil and gas company anymore. Yeah. Yeah. But I mean, if you were
00:49:54
Speaker
helping with the climate change issues that we have and doing a pivot to electrical power that comes from geothermal energy. That's super cool. I mean, you're really moving the needle in a big way. And so it should help them. That pivot that you mentioned to generating electrical power is, it was exactly what I was thinking about like seconds before you mentioned it.
00:50:25
Speaker
Because if you look at an oil company like Shell, for example, they had a lot of venture investments and utility operations. And they said, you know what, we are going to back out of this for the time being. And they actually pulled out. And so also looking or factoring in the fact that we are going to tap in, let's say, as an oil and gas company from these cooler aquifers.
00:50:48
Speaker
I don't see geothermal being sort of this heat source, but more so for power source because the temperatures aren't high enough. Maybe I'm wrong. So maybe a couple of questions in one. I just wanted to know, do you think as an oil and gas company, you should focus on becoming a utility and also think about, okay, do we have grid connections in place to transport this power from geothermal where we can actually leverage our expertise?
00:51:13
Speaker
or powering your own operations with it. That's the first part of the question. And the second one would be, do you look at an oil and gas company in an at zero future also maybe supplying geothermal heat, possibly from these aquifers?
00:51:29
Speaker
Okay, so back to the first comment that you made, that these cooler aquifers are good for heat source and not power. That may be the case, especially when you look at some of the loop technology that's out there, that they need to slow their flow rates out so they don't conductively cool the rock off. But our aquifers that we're going after, which are, we started about 125 seat,
00:51:54
Speaker
super common temperature that you would see down there but not too hot to mess with the drilling and stuff like that with an organic ranking system makes plenty of power right so so we're we're very much focused on electrical power now for the oil companies they have a choice right just like they have a choice
00:52:17
Speaker
um in oil and gas are they an upstream focus where they explore and find and flip or are they um midstream where they transport or they downstream um where they would maybe actually sell the power they have a choice but but what's also interesting is because this is kind of interesting
00:52:39
Speaker
The market's wide open. I mean, what if a Halliburton wants to get into the power business? They've always had trouble getting into the oil and gas business because they compete with their customers, and the customers don't like that. Well, that's not happening in this case. So you may have a lot more players, and when you start thinking about microgrids,
00:53:00
Speaker
and building microgrid power plants for data centers or hydrogen or whatever you want, it really opens up the playing field. It's not dominated by the big players. What the oil and gas people have now is an
00:53:19
Speaker
incredible amount of data. They have mineral rights. Now, that's something we have to talk about. Some states, geothermal energy is in mineral rights and some it's in the water rights. In Colorado, it's the water rights that are aligned with it. But the oil and gas operator has data, they have pads,
00:53:49
Speaker
they have roads, they have connections to the grid. I mean, so it's an obvious direction for them to go in, in my mind. And I think it's going to be a race on who makes the power, right? You know, you have the or maps of the world now making power from conventional geothermal systems. Will they dominate
00:54:12
Speaker
the future or will you have new players like Schlumberger or SLB to maybe take over that and expand downstream more. So it's going to be fascinating. But I think there's a lot of opportunities for all the players.
00:54:32
Speaker
Now, we've kind of touched on this as sort of a related question. But what is the killer application or the best use case for geothermal? Because we've talked about, you mentioned hydrogen, there are these behind the meter options, power for data centers. What do you see as
00:54:54
Speaker
is it even a technology where the application is that important and it's really more about the infrastructure and the siting, that kind of thing, or are there really good specific applications where it makes a lot of sense? Great question. Yeah, in my mind, it's the baseload aspect of it that's missing from other renewables and it's carbon-free, right? So what you could do
00:55:21
Speaker
is doing almost a mixture of behind the meter generating hydrogen for whatever use, trucking or ships, whatever, right? And then when the grid needs it, you flip it off to the grid. So this ability of
00:55:44
Speaker
of being able to provide top-up power when the demand is super high, I think is a killer app. And when it's low, you can do other things, run the cloud.
00:56:05
Speaker
But it's super flexible and it works 24 by 7. That's what I mean by base load. Once you start getting the water flowing and mining the heat, it's just a constant source of power.
00:56:25
Speaker
And having that versus coal plants that you have to fire up or gas plants when the demand goes up, I think it's going to be core to our grid. Well, I think that's a great place to leave it, Jim. I just want to thank you so much for coming on and sharing your knowledge with us is a really fantastic conversation. Yeah, thank you. I enjoyed it.
00:56:58
Speaker
Innovation Matters is a production of Lux Research. For more, visit www.luxresearchinc.com.