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Speaker 1: Pushkin. Here's the standard story of the energy transition. To

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Speaker 1: get to our post carbon future. We just need some

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Speaker 1: combination of wind and solar power plus energy storage plus

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Speaker 1: nuclear power. Those together ought to do it. That's a

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Speaker 1: story I've told on this show. It's a story lots

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Speaker 1: of people have told on lots of shows. But I

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Speaker 1: recently talked to a guy named Carlos Arake who made

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Speaker 1: a compelling case that this story is not true, that

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Speaker 1: it's not going to work for a variety of reasons, technical, economic, political,

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Speaker 1: Wind and solar plus storage plus nuclear are just going

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Speaker 1: to be too slow to build, too inefficient, too politically

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Speaker 1: complex to deliver all the carbon free energy that the

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Speaker 1: world needs. Or Carlos has another idea. It's kind of

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Speaker 1: out there, but he's raised a lot of money to

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Speaker 1: do it. His idea is this, shoot a high energy

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Speaker 1: beam down into the ground until we've dug a hole

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Speaker 1: eight inches wide and twelve miles deep. Basically, he wants

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Speaker 1: to reinvent geothermal energy. He wants to harvest the heat

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Speaker 1: energy that's just sitting down there all over the world

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Speaker 1: waiting for us to get it. He says, if he

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Speaker 1: can figure out how to do that, you know, cheaply, efficiently,

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Speaker 1: at scale, our energy problems will be solved. But nobody

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Speaker 1: has ever dug a hole nearly this deep. Carlos's own

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Speaker 1: company hasn't started drilling deep wells yet, and so the

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Speaker 1: whole project is, you know, at this point something of

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Speaker 1: a long shot. Still, Carlos and his colleagues have raised

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Speaker 1: somewhere around one hundred million dollars, and if they succeed

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Speaker 1: in what they're trying to do, it will infect be

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Speaker 1: this incredible new source of clean energy. I'm Jacob Goldstein,

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Speaker 1: and this is What's Your Problem? The show where I

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Speaker 1: talk to people who are trying to make technological progress.

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Speaker 1: My guest today is Carlos Arake. He's the co founder

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Speaker 1: and CEO of Quay's Energy. Carlos's problem is this, how

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Speaker 1: do you make drilling for geothermal energy as routine and

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Speaker 1: widespread and profitable as drilling for oil or natural gas.

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Speaker 1: Carlos knows in great detail how routine and widespread and

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Speaker 1: profitable drilling for oil and gas is because he spent

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Speaker 1: the first fifteen years of his career working at Schlumberge,

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Speaker 1: a giant firm that provides services to oil and gas

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Speaker 1: companies and to start. I asked Carlos how he made

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Speaker 1: the leap from working at this one hundred year old

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Speaker 1: company in the fossil fuel business to starting a company

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Speaker 1: that's trying to move the world off of fossil fuel.

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Speaker 2: I think it goes back to much before I quit.

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Speaker 2: I quit in twenty seventeen, and I think I can

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Speaker 2: remember as far back as twenty ten, when I started

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Speaker 2: to become very familiar with the oil industry, the amount

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Speaker 2: of energy we use as a civilization, how it's growing

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Speaker 2: over time, when I started thinking about what it would

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Speaker 2: take to transition away from fossil fuels.

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Speaker 1: So like, in a way, working in the fossil fuel industry,

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Speaker 1: it gave you an appreciation for how hard it will

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Speaker 1: be to transition away from fossil fuels.

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Speaker 2: Very much so, very much.

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Speaker 1: So.

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Speaker 2: It's just the sheer numbers how much energy it takes

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Speaker 2: to power humanity today. It's just an awakening moment to say, Okay,

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Speaker 2: there's no way we're going to be able to do

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Speaker 2: this with wings, solar batteries, hydro nuclear, etcetera, etcetera. So

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Speaker 2: that's when the search started. It had to be something

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Speaker 2: at the scale of oil and gas, and it had

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Speaker 2: to be something that solved for the environmental challenge, but

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Speaker 2: also other challenges geopolitical, socio economic and environmental emissions, land use,

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Speaker 2: mineral use, all of those things need to be sold for.

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Speaker 2: And I wasn't seeing anything on the landscape at all.

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Speaker 2: So that's the beginning of that inkling.

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Speaker 1: And when was that?

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Speaker 2: When was it that you left? So I think I

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Speaker 2: was living in Norway at the time. I was working

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Speaker 2: for somebody in Norway, and that's when I started thinking

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Speaker 2: about these things, mostly seeing, you know, reflecting on a

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Speaker 2: country like Norway, how prosperous it is, and where that

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Speaker 2: prosperity comes from. Oil, which is.

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Speaker 1: Oil oil and good institutions. Right, they have a lot

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Speaker 1: of oil and they have like very robust civil institutions.

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Speaker 1: A rare combination.

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Speaker 2: Oh yeah, it's a very blessed combination, you know. So

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Speaker 2: that got me thinking about those things, you know, and

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Speaker 2: living in there, not not just working, but living living

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Speaker 2: in the country, being a direct beneficiary of that way

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Speaker 2: of doing things. What's the beginning of that? You know?

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Speaker 2: And that country's pristine, is so beautifully pristina. I said, Okay,

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Speaker 2: these guys are doing something really, really right. What's behind that.

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Speaker 2: So that's the beginning of that search of how much energy?

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Speaker 2: How do we do it? It's not just about emissions,

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Speaker 2: it's about many other things. But it took seven years

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Speaker 2: to develop the deep conviction and to get my families,

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Speaker 2: you know, complicity in quitting Stormagy.

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Speaker 1: Because like, you had a good job, you p absume

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Speaker 1: you were paid well, you could work there your whole life.

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Speaker 2: Absolutely, it's I have nothing bad to say about my

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Speaker 2: years there. It's nothing but good experiences, good colleagues, good problems,

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Speaker 2: never boring. So it really came from a very deep

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Speaker 2: conviction of trying to you know, I call it using

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Speaker 2: the second part of my career to actually push in

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Speaker 2: what I think needs to be the direction that the

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Speaker 2: world needs to go into. And don't get me wrong,

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Speaker 2: I don't think fossil fueler girt is a beer anytime soon.

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Speaker 2: But we need to start pushing in a new direction.

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Speaker 2: And I wasn't seeing anything able to do that.

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Speaker 1: So you go and work at the venture capital fund

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Speaker 1: of MIT, your alma mater, in your in your search, right,

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Speaker 1: you're you're now you're on your quest. When you get there,

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Speaker 1: I mean, are you sort of in your mind explicitly

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Speaker 1: or implicitly be like, Okay, I'm gonna go try and

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Speaker 1: find it. I'm gonna go try and find some solution

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Speaker 1: to our energy problem. Is that?

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Speaker 2: Is that what's happening? I think it is? It is

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Speaker 2: like that. Indeed, I quitch lanu Ja without having a job.

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Speaker 2: You know, on principle I said, look, I'm just I

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Speaker 2: need to get out of here to reinvent myself. Is

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Speaker 2: too comfortable to stay in that job. Yeah, so you

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Speaker 2: will always postpone it. So we came back. We were living

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Speaker 2: in England as a family, my wife and three kids,

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Speaker 2: and I decided that I had already decided that energy

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Speaker 2: transition was a technological problem first, and if successful, if bridged,

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Speaker 2: could become in a socio economical, geopolitical and all of

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Speaker 2: the other things. Regulatory problem, but technological problem first, we

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Speaker 2: don't have the technologies to transition away from fossil fuels.

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Speaker 1: And what year ish is this?

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Speaker 2: When did you say twenty seventeen?

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Speaker 1: So by twenty seventeen solar powers is already getting much

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Speaker 1: cheaper with the Mayan batteries are still expensive, but they're

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Speaker 1: starting to get cheaper. Like people are very excited about

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Speaker 1: those technologies at that time, like, what's your what's your

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Speaker 1: view on them?

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Speaker 2: So I think they will play a part in the solution,

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Speaker 2: but I think they will play a very small part

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Speaker 2: in the solution.

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Speaker 1: And if you take solar and wind and nuclear, to

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Speaker 1: take the three sort of classic modern classic renewables, like

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Speaker 1: those seem pretty compelling plus storage as a package. To me,

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Speaker 1: you're clearly less compelled by those as a package.

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Speaker 2: Why so it has to do with the premiums we

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Speaker 2: incur in transitioning a unit of fossil energy to a

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Speaker 2: unit of clean energy from either one of those sources.

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Speaker 1: So when you say premium, do you mean cost? By

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Speaker 1: different definitions of the word cost, What does premium mean

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Speaker 1: when you use it that way?

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Speaker 2: Yeah, I define premium as multiple things. So land use

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Speaker 2: per unit of energy, that's one mineral U per unit

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Speaker 2: of energy, that's two and man hours labor use per

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Speaker 2: unit of energy. And I frame it like that simply

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Speaker 2: because these are the resources we have available to us.

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Speaker 2: You know, think about it. We have time, space, and stuff. Basically, actually,

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Speaker 2: I say four things. There's time, there's place, there's natural resources,

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Speaker 2: and there's nohow that's it. Those are the resources everything

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Speaker 2: else derives from that.

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Speaker 1: It's like land, labor, capital, and ideas. Right, it's like

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Speaker 1: kind of econ one oh one ish.

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Speaker 2: That's right. That's right. So you cannot pretend that you

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Speaker 2: can replace twenty five trillion juice per second, which is

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Speaker 2: what it takes to power humanity, if in doing so

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Speaker 2: you're incurring a one hundred x to one thousand x

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Speaker 2: on any of those things. You know, a unit of

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Speaker 2: fossil energy takes a certain amount of space, land, a

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Speaker 2: certain amount of minerals, a certain amount of labor to

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Speaker 2: pull together, to bring together, and if you try to

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Speaker 2: do it with solar, that multiplies by about one hundred in.

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Speaker 1: Terms of the space in particular.

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Speaker 2: Yes, it takes one hundred times more land, it takes

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Speaker 2: one hundred times to a thousand times more minerals, depending

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Speaker 2: on a mineral, and it takes one hundred to a

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Speaker 2: thousand times more man hours.

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Speaker 1: To install and versus installing and recovering fossils.

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Speaker 2: All things consider and implicitly, and there is cost, But

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Speaker 2: cost is deceptive because you can always make up economic

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Speaker 2: models and capital cost models to actually bring those casts down.

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Speaker 2: We can talk about cost in a second, but the

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Speaker 2: bring it more fundamentally, that is that realization. That and

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Speaker 2: the same applies for wind, and the same applies for

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Speaker 2: pretty much everything that's renewable, diffuse and intermittent. We cannot

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Speaker 2: move a jewel or a what of fossil energy to

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Speaker 2: the clean space to the emission space, you know, bonus

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Speaker 2: points for lower emissions by incurring one hundred to one

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Speaker 2: thousand eggs more costs on land use, mineral use, on

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Speaker 2: labor use per unit of energy. That's not scalable. The

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Speaker 2: externalities will stop it on its tracks. Uh huh.

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Speaker 1: Like even though it's so much cheaper to make solar

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Speaker 1: panels now there sort of will be land use. Just

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Speaker 1: in practical political terms, people won't let us put all

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Speaker 1: the solar panels we need to generate the energy. I mean,

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Speaker 1: is it that kind of problem.

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Speaker 2: Yeah, we won't be able to afford the land use

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Speaker 2: for that. I mean, forget about people letting it be

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Speaker 2: that that's going to happen, but we just won't have

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Speaker 2: the land budget to do it. Because we also need

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Speaker 2: to use land for other things like preserving environmental forests,

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Speaker 2: right to like feeding ourselves, you know, and people always

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Speaker 2: say like, oh, we can put this stuff in the Sahara.

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Speaker 2: Sure you can, but it's still intermittent and the energy

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Speaker 2: is they're not here. Yeah, So there's this fallacy that

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Speaker 2: because you can take energy from somewhere, sometimes you can

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Speaker 2: put it everywhere all the time. That is the biggest fallacy.

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Speaker 1: I mean people are trying to solve that. I know

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Speaker 1: that adds costs, right, but like by some come actually

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Speaker 1: building building wires.

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Speaker 2: That is the cost. That is the cost. So people

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Speaker 2: say WIN and SOT are cheap. Lie, the collection of

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Speaker 2: those resources is cheap. But building those into and the

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Speaker 2: fixed costs required to bring that energy everywhere all the time,

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Speaker 2: these where the true cost takes. You know, the cost

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Speaker 2: is not in collecting the energy. The cost is in

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Speaker 2: moving it and storing it. And it's massive, massive, massive.

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Speaker 2: I mean, so if you're as an engineer think about

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Speaker 2: those and you say, look, this is this is not

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Speaker 2: going to get us anywhere close to where we need

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Speaker 2: to be. Fine, they'll play a solution, there's markets for that.

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Speaker 2: People will money, capitalism will play its role. But at

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Speaker 2: some point those externalities will smack you in the face

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Speaker 2: and it's happening. It's happening. You can see it already

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Speaker 2: happening in some places with the penetration. So I don't

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Speaker 2: believe and this is not faith. This is not believe

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Speaker 2: us in faith. This is believe us in quantitative rigors

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Speaker 2: engineering analysis that those things will actually get us to

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Speaker 2: where we need to go.

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Speaker 1: What about nuclear power.

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Speaker 2: Or nuclear can totally do it? Absolutely? Nuclear does not

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Speaker 2: incur those premiums. But nuclear has a different problem. From Colombia.

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Speaker 2: We have oil. We barely have a refinery in the country.

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Speaker 2: Why is that because of value change them because of geopolitics.

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Speaker 2: So don't tell me that we will be happy to

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Speaker 2: ship radioactive fuel, refine radioactive fuel, and ship back radioactive

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Speaker 2: ways on a global scale. We can barely do that

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Speaker 2: with oil and gas.

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Speaker 1: In particular, you're saying the raw material, the uranium say

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Speaker 1: that you need to make nuclear power doesn't exist in

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Speaker 1: lots of places, and the notion that there will be

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Speaker 1: some kind of globe supply chains shipping uranium around the

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Speaker 1: world is implausible' that's the core argument you're making.

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Speaker 2: Yeah, and that's just the raw material. The raw matill

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Speaker 2: is a simpler problem. It's just the problem of carrying

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Speaker 2: a lot of things from point to point B. I'm

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Speaker 2: more concerned actually about the refined form of that shipping

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Speaker 2: and rich radioactive materials fuel grade not weapon grade fuel

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Speaker 2: greade radioactive material to fuel the power plant. You know, worldwide,

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Speaker 2: into economies that cannot even control themselves, into very very

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Speaker 2: trouble geopolitical systems that cannot even govern themselves. This is

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Speaker 2: not going to happen at scale. I think nuclear is

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Speaker 2: a solution for the G twenty, but not much beyond

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Speaker 2: that because of the geopolitics, not because of the technological

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Speaker 2: arguments I made about win and solar.

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Speaker 1: The G twenty, the twenty basically richest countries in.

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Speaker 2: The world essentially, that's right. That is correct.

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Speaker 1: Okay, so you've you've set You've set the table. This

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Speaker 1: is what you're thinking about When you leave Schlumberge and

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Speaker 1: you're going out looking for the solution that nobody has found.

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Speaker 1: You go to mi T good place to look what

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Speaker 1: happens when you get there.

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Speaker 2: So I got there because I heard about a new

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Speaker 2: venture fund being launched by MIT timing. Just I didn't

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Speaker 2: plan it that way, It just happened that way. Som

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Speaker 2: T was telling the world, Look, the big problems of

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Speaker 2: the world are not being solved because capitalism is distracted

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Speaker 2: with the near term and little opportunities. So they created

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Speaker 2: a fund, the Engine, they called it, to incentivize the

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Speaker 2: transition of bold ideas from lab to a commercial life.

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Speaker 2: So I went into that environment and I started pitching

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Speaker 2: the engine. You know, you know, I let me be

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Speaker 2: part of these I want to I want to work

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Speaker 2: here because I want to learn venture capital. And the

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Speaker 2: reason I did that is because if it's a technological solution,

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Speaker 2: only venture capital of that kind is going to allow

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Speaker 2: it to flourish outside of the confines and politics of

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Speaker 2: large corporations like SMOG. I was amiliar with that. You

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Speaker 2: saw the limits, you saw the limits of what legacy

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Speaker 2: companies could or would. That's right. The opportunity cost is

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Speaker 2: too hire for them to encourage. Their stakeholders don't allow it.

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Speaker 2: They do research and development, but not of the kind

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Speaker 2: required to bring forth.

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Speaker 1: They're not in that business. They're not in that business.

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Speaker 2: Christians and innovator's dilemma like why would they do that? Yes,

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Speaker 2: their capital cause their opportunity costs doesn't allow them to.

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Speaker 2: So that was my conclusion. Venture capital might do these,

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Speaker 2: especially of the kind the Engine was proposing. MIT was proposed,

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Speaker 2: not any venture capital, because a lot of it is

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Speaker 2: very short temper sure, So okay, So that was the

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Speaker 2: journey there. I said, okay, let me be here. I

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Speaker 2: want to learn venture capital, not because I want to

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Speaker 2: be an investor, but because I want to see how

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Speaker 2: that game is played, how you pitch an investor in

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Speaker 2: venture capital, and in return, I can help you with

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Speaker 2: these companies that are coming out of the labs to

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Speaker 2: figure out commercialization pathways and I can do diligence. We

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Speaker 2: did that for a year to the day. So that

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Speaker 2: was that transition, and then one day you meet a guy.

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Speaker 2: The first week there by the way, the first week there,

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Speaker 2: it's funny. So I joined in July first, twenty seventeen,

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Speaker 2: and I think that week, that very week or the

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Speaker 2: week after, Paul Oskov walked in with Aaron Mandel saying, Hey,

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Speaker 2: here's this idea. We need to pitch the engine. And

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Speaker 2: I was the investor representing the investor on the other

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Speaker 2: side of that conversation.

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Speaker 1: The skeptic, the person saying, why should we give you money?

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Speaker 2: Yes, yes, yes, speitch me.

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Speaker 1: Why so who are these people?

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Speaker 2: Paul is a career long research engineer at MIT, particularly

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Speaker 2: the Plasma Science Fusion Center.

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Speaker 1: Fusion as in everybody's favorite dream for how to get

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Speaker 1: nuclear energy. If we could ever figure it out, it

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Speaker 1: would be amazing. But nobody still that fusion.

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Speaker 2: That fusion which is also a solution. But I can

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Speaker 2: give you a few pointers why I don't think that's

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Speaker 2: going to do anything in our lifetimes. But that's another conversation.

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Speaker 2: So that's that's Paul was. Then Aaron Mandale is a

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Speaker 2: serial entrepreneur. He likes to start companies. He's a good scout,

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Speaker 2: and he was looking for solutions in the geothermal space

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Speaker 2: and he had concluded that drilling deeper and harder was

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Speaker 2: a really, really, really important part of the equation.

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Speaker 1: So there's an entrepreneur who has the idea of drilling

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Speaker 1: deeper for geothermal energy. What's he doing with a guy

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Speaker 1: who studies fusion, Like, what's going on there?

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Speaker 2: Paul had been since two thousand and seven, been playing

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Speaker 2: with very many of the technologies that are used in fusion,

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Speaker 2: but to drill, you know, he was playing with gyrotrons

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Speaker 2: and wave guides and energy beams. But that's still two

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Speaker 2: years before they I even met them as the investor

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Speaker 2: on the other side of the table.

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Speaker 1: So okay, so these guys have been working together. They

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Speaker 1: walk into the room, your brand new what's their pitch?

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Speaker 2: Their page is very much about drilling hotter and deeper

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Speaker 2: with energy to unlog geodermal energy at a very large scale.

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Speaker 2: They wanted money to form that company. They wanted money

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Speaker 2: to start that journey. And I was listening on the

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Speaker 2: other side and saying, Okay, this makes sense, sounds far fetched.

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Speaker 2: I need to become familiar with these technologies which are

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Speaker 2: not using oil and gas. And I was saying, you know,

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Speaker 2: but if it works, it really changes everything. But you're

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Speaker 2: not pitching me a company. You're pitching me a research project.

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Speaker 2: You're pitching me a continuation of the ten years of

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Speaker 2: academic work. And this is a venture capital fund. We

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Speaker 2: need to see a company, and we need to see

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Speaker 2: a founding team.

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Speaker 1: On a really basic level. Like you're saying hotter and deeper,

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Speaker 1: but like what is the very basic idea about hotter

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Speaker 1: and deeper? Like what is sort of status quo geothermal energy?

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Speaker 1: And then how is this idea different?

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Speaker 2: Yeah, so geothermal energy is relatively shallow. It's no more

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Speaker 2: than half a mile maybe a mile into the earth.

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Speaker 2: And to put that into perspective, oil and gas routinely

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Speaker 2: goes beyond that. They go to two miles maybe three

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Speaker 2: miles down.

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Speaker 1: So, in addition to the fact that geothermal energy as

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Speaker 1: it exists now, not only when you're being pitched, but

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Speaker 1: still today, right, it's it's not that deep, and also

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Speaker 1: it's fairly limited in where people can do it right

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Speaker 1: by the nature of what exists a mile or less

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Speaker 1: under the earth.

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Speaker 2: That is correct, it's very geographically constrained. But funny enough,

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Speaker 2: if you look at those places they do amazing things

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Speaker 2: with geothermal, like Iceland and Kenya, they power themselves. They're

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Speaker 2: almost you know, Kenny is like fifty percent electricity from geothermal,

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Speaker 2: Iceland is like thirty percent electricity, like eighty percent heat.

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Speaker 1: And in those places, like at least in Iceland, the

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Speaker 1: heat is coming up out of the ground itself almost right, Like.

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Speaker 1: I mean, I'm sure they're clever engineers and doing lots

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Speaker 1: of work, but when the heat is literally like bubbling

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Speaker 1: out of the ground, it seems a lot easier to cap.

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Speaker 2: It's a lot easier, it's technologically possible, and it's economically feasible.

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Speaker 2: So that's why they exist there. Yeah, So that's the

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Speaker 2: status school of geothermal today.

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Speaker 1: And what happens if you go deeper just on a

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Speaker 1: basic geological.

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Speaker 2: Level, so it's very simple. You just access that same

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Speaker 2: heat no matter where you are in the world. If

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Speaker 2: you go deeper, you can move away from Iceland and

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Speaker 2: you can access the same energy source, which happens to

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Speaker 2: be everywhere but at different depths.

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Speaker 1: So everywhere is Iceland if you go deep enough.

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Speaker 2: Everywhere is Iceland if you from a geothermal point of view,

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Speaker 2: if you go deep enough, indeed, uh huh.

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Speaker 1: And so I mean in the world now, I mean

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Speaker 1: Iceland is kind of the classic, and Kenya is pretty

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Speaker 1: well known overall. What's the Where is geothermal with current

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Speaker 1: technology economically feasible?

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Speaker 2: It's very small because of the geographical limitation. To give

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Speaker 2: you a sense, not even point five percent of energy

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Speaker 2: zero point five one half of one percent of global

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Speaker 2: energy comes from geothermal. And that's because it's geographically constrained.

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Speaker 1: Huh. Basically in most places you have to go too

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Speaker 1: far down to get to the to get to the

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Speaker 1: kind of heat you need.

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Speaker 2: That is correct. That is correct. So that's why it's constrained.

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Speaker 1: Why can't you just keep drilling, like, why can't you

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Speaker 1: just do what they're doing in places where they do

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Speaker 1: it and just go farther down.

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Speaker 2: You can, and people have. It's just very expensive. The

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Speaker 2: drilling operation takes over the economics of anything.

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Speaker 1: Is it nonlinear in some way? Like? Is it that

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Speaker 1: very much deeper you go, the more expensive each marginal

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Speaker 1: meter is?

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Speaker 2: Yes, So you start at hundreds of dollars per meter,

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Speaker 2: and you could very well end up in tens of

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Speaker 2: thousands of dollars per meter. Why one hundred x because

395
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Speaker 2: your drill bits where and you have to replace them,

396
00:24:16,516 --> 00:24:20,036
Speaker 2: and if you're very deep down there, it takes a

397
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Speaker 2: lot more time to replace the drill bit.

398
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Speaker 1: To pull it up. Time you got to pull it up.

399
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Speaker 2: Pull it out, change the drill bit, pull it back,

400
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Speaker 2: and push it back in and then drill for that

401
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Speaker 2: is such an amazingly simple but seemingly impossible to solve

402
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Speaker 2: problem because that rog and that temperature kills the drill

403
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Speaker 2: bits in hours in hours, not even days in hours.

404
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Speaker 1: So the farther down you as it gets hotter, the

405
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Speaker 1: drill bit wears out faster, and the farther down you

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Speaker 1: want to get hotter. So it's sort of a problem.

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Speaker 2: That's right. There's another problem is that at some point

408
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Speaker 2: you can't even get the energy down to the drill bit.

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Speaker 2: Like you're on the surface rotating the drill string and

410
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Speaker 2: all of that energy is lost on the way there,

411
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Speaker 2: so the drill bit is barely scratching the surface at

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Speaker 2: some point.

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Speaker 1: So this is the status quo when these guys walk

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Speaker 1: into the room, just in basic terms, like what is

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Speaker 1: their idea?

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Speaker 2: The idea is we can use energy and nothing but energy,

417
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Speaker 2: no drill to do the work that the drill bit does.

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Speaker 2: No drill bits, and not only that, no electronics, no cables,

419
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Speaker 2: no switches, no nothing that breaks. We're just going to

420
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Speaker 2: shoot a beam of energy down there, and it's just

421
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Speaker 2: going to open up a hole indefinitely. And the beam

422
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Speaker 2: doesn't care if the rock is harder or harder or

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Speaker 2: more brace it doesn't matter. And the beam doesn't care

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Speaker 2: if it's ten kilometers or fifteen or twenty kilometers because

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Speaker 2: it loses very little energy. So that's the big idea.

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Speaker 2: The physics are radically different.

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Speaker 1: So it's pulverizing the rock, right, it's turning the rock

428
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Speaker 1: into powder basically, like how do you get it back

429
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Speaker 1: up the tube?

430
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Speaker 2: You blow it out of the hole, very much like

431
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Speaker 2: the Sahara blows across the ocean because the particles are

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Speaker 2: so tiny that blowing them with a gas stream lifts

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Speaker 2: them up and pushes them out of the hole. So

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Speaker 2: that's it. You're basically pumping a gas and the gas

435
00:26:29,116 --> 00:26:31,956
Speaker 2: is taking those particulates out of the hole.

436
00:26:32,236 --> 00:26:35,396
Speaker 1: So this is the idea. They walk into the room with, yes,

437
00:26:35,516 --> 00:26:36,276
Speaker 1: and you say what?

438
00:26:38,156 --> 00:26:44,196
Speaker 2: I say many many things, but I say, Okay, how

439
00:26:44,196 --> 00:26:46,076
Speaker 2: do you build a company out of this? How do

440
00:26:46,116 --> 00:26:48,156
Speaker 2: you test? What are the key ideas here that you

441
00:26:48,196 --> 00:26:50,396
Speaker 2: need to test for I was trying to come up

442
00:26:50,436 --> 00:26:52,356
Speaker 2: to speed with ten years. You got to realize they

443
00:26:52,356 --> 00:26:56,396
Speaker 2: had been working this for tis a lot of information

444
00:26:56,516 --> 00:26:58,956
Speaker 2: that I need to pick up, and that I did

445
00:26:58,956 --> 00:27:01,676
Speaker 2: pick up along the way. But I was just basically saying, Okay,

446
00:27:02,476 --> 00:27:04,636
Speaker 2: what are the steps? How do you the risk this?

447
00:27:04,836 --> 00:27:06,516
Speaker 2: How do you make a company? How do you get

448
00:27:06,516 --> 00:27:08,636
Speaker 2: to market, how you make revenue? All of the things

449
00:27:08,676 --> 00:27:12,716
Speaker 2: that it to go beyond an experiment into forming a

450
00:27:12,756 --> 00:27:17,796
Speaker 2: company that has to survive by selling products or services.

451
00:27:19,076 --> 00:27:22,036
Speaker 2: I also was asking about the team, typical of venture

452
00:27:22,076 --> 00:27:24,756
Speaker 2: capital question, who is your team? Who is the interrepreneur

453
00:27:24,836 --> 00:27:27,756
Speaker 2: who is going to do nothing? Twenty four to seven.

454
00:27:27,796 --> 00:27:30,396
Speaker 2: But these all of those things are super important when

455
00:27:30,436 --> 00:27:33,556
Speaker 2: you make an investment, and they didn't have good answers

456
00:27:33,596 --> 00:27:35,796
Speaker 2: to that. They were just pitching a research project. But

457
00:27:36,876 --> 00:27:40,796
Speaker 2: that helped Aaron, who is a serial entrepreneur, to see

458
00:27:40,836 --> 00:27:45,276
Speaker 2: me as a person that was very well qualified to

459
00:27:45,316 --> 00:27:47,436
Speaker 2: potentially lead this. He pitched me the next day. He

460
00:27:47,476 --> 00:27:49,516
Speaker 2: invited me to breakfast and say, Carlos, why don't you

461
00:27:49,636 --> 00:27:52,036
Speaker 2: just jump in here and I'll be the CEO. You'll

462
00:27:52,076 --> 00:27:55,316
Speaker 2: be the CTO. You are cut for this, And I said, well,

463
00:27:55,316 --> 00:27:58,196
Speaker 2: I just got here, Aaron, Hold on a second. But

464
00:27:58,236 --> 00:28:03,236
Speaker 2: that's the beginning of that journey. But as I approached

465
00:28:03,236 --> 00:28:06,356
Speaker 2: my one year anniversary at the Engine, and I knew

466
00:28:06,396 --> 00:28:08,836
Speaker 2: that I didn't want to be an investor because I'm

467
00:28:08,836 --> 00:28:13,036
Speaker 2: an near first that's when I started to think seriously

468
00:28:13,076 --> 00:28:14,996
Speaker 2: about what it would take to actually build a company.

469
00:28:14,996 --> 00:28:18,276
Speaker 2: So I took I took five months of four months

470
00:28:18,276 --> 00:28:21,516
Speaker 2: of July of September October doing nothing. I went back home,

471
00:28:21,596 --> 00:28:25,076
Speaker 2: did nothing, just kind of retired for four months and

472
00:28:25,236 --> 00:28:27,836
Speaker 2: thinking about nothing but this. So that was that art,

473
00:28:27,996 --> 00:28:31,836
Speaker 2: and that's when the company was officially born October of

474
00:28:31,836 --> 00:28:41,636
Speaker 2: twenty eighteen. That's the beginning of the commercial journey.

475
00:28:39,636 --> 00:28:42,556
Speaker 1: Still to come on the show. Why getting the oil

476
00:28:42,596 --> 00:28:45,516
Speaker 1: and gas industry interested in what Carlos is doing is

477
00:28:45,596 --> 00:28:48,916
Speaker 1: key to his plans and really to the whole energy transition.

478
00:28:57,876 --> 00:29:00,156
Speaker 1: So where are you now?

479
00:29:00,596 --> 00:29:04,036
Speaker 2: So we are six years in, We've raised more than

480
00:29:04,076 --> 00:29:10,916
Speaker 2: one hundred million dollars. We are transitioning the technology from

481
00:29:10,956 --> 00:29:14,436
Speaker 2: the lab to the field. So we have now built

482
00:29:15,156 --> 00:29:20,356
Speaker 2: full scale systems that are now going to the field

483
00:29:20,436 --> 00:29:24,396
Speaker 2: to show the world. So we're taking the technogy from

484
00:29:24,396 --> 00:29:26,596
Speaker 2: the lab to the field. And what that means is

485
00:29:26,636 --> 00:29:31,316
Speaker 2: we it's no longer inside a controlling environment. It's out

486
00:29:31,356 --> 00:29:34,956
Speaker 2: there under the open sky in an embodiment that is

487
00:29:34,996 --> 00:29:42,476
Speaker 2: commercially relevant doing a technology demonstration that will hopefully unlock

488
00:29:42,476 --> 00:29:44,756
Speaker 2: the Neess round of capital going forward.

489
00:29:44,956 --> 00:29:47,556
Speaker 1: So specifically, when you say you're taking it from the

490
00:29:47,636 --> 00:29:49,636
Speaker 1: lab to the field, what exactly are you doing, Like,

491
00:29:50,036 --> 00:29:52,156
Speaker 1: where are you doing it and physically what is happening.

492
00:29:52,876 --> 00:29:55,756
Speaker 2: It's in Texas. It all happens in Texas. We have

493
00:29:56,836 --> 00:30:02,076
Speaker 2: two embodiments of the machine of the drilling machine. We

494
00:30:02,196 --> 00:30:07,236
Speaker 2: call it a millimeter wave drill rig. One is small,

495
00:30:07,996 --> 00:30:11,156
Speaker 2: it looks like a mi drilling system. It doesn't look

496
00:30:11,636 --> 00:30:14,596
Speaker 2: like an oil and gas drilling system. We made it

497
00:30:14,636 --> 00:30:18,676
Speaker 2: small on purpose to move faster, to prove things faster.

498
00:30:19,116 --> 00:30:21,476
Speaker 1: When you say it's small, I don't know what a

499
00:30:21,516 --> 00:30:23,756
Speaker 1: mining drilling system looks like. What's it look like?

500
00:30:25,116 --> 00:30:30,796
Speaker 2: It looks like like the caterpillars. I mean probably that's

501
00:30:30,836 --> 00:30:33,076
Speaker 2: the most familiar thing to most people, the caterpillars as

502
00:30:33,076 --> 00:30:36,836
Speaker 2: you see at construction sites. Yeah, you know, the excavators,

503
00:30:38,316 --> 00:30:41,116
Speaker 2: the things working around a construction building, that kind of

504
00:30:41,356 --> 00:30:46,276
Speaker 2: size of machinery. Okay, we've bought one of the shell

505
00:30:46,316 --> 00:30:49,876
Speaker 2: and we gave it milliontersway in capabilities. We gave it

506
00:30:49,916 --> 00:30:51,476
Speaker 2: super powers, so to speak.

507
00:30:51,556 --> 00:30:55,036
Speaker 1: We're a caterpillar, like some kind of construction vehicle that

508
00:30:55,076 --> 00:30:56,916
Speaker 1: can blast the hole in the earth.

509
00:30:57,716 --> 00:31:00,436
Speaker 2: Yes, but that's the first version. We put it on

510
00:31:00,476 --> 00:31:04,156
Speaker 2: a system that can go out there and get it done.

511
00:31:04,196 --> 00:31:06,516
Speaker 2: And we're doing that in Austin. Tases. We're taking from

512
00:31:06,556 --> 00:31:10,996
Speaker 2: Houston to Austin near Austin in acquiry, a granite firy

513
00:31:10,996 --> 00:31:12,956
Speaker 2: to actually show that we can drill through very very

514
00:31:12,956 --> 00:31:15,476
Speaker 2: hard granite without a drill bit.

515
00:31:16,316 --> 00:31:19,876
Speaker 1: So you basically are shooting a microwave beam out of

516
00:31:19,916 --> 00:31:22,196
Speaker 1: this construction vehicle. Into the rock.

517
00:31:22,956 --> 00:31:25,636
Speaker 2: We're shooting down into the rock and we're drilling a

518
00:31:25,716 --> 00:31:31,156
Speaker 2: hole through the rock for hundreds of meters, for tens

519
00:31:31,196 --> 00:31:34,156
Speaker 2: to hundreds of meters. So yes, it's imminent. It's going

520
00:31:34,196 --> 00:31:39,516
Speaker 2: to happen within the next ninety days. The second embodiment

521
00:31:40,636 --> 00:31:44,996
Speaker 2: is not small, it's big. It looks just like a

522
00:31:45,076 --> 00:31:46,876
Speaker 2: drilling rig. You look at it and you say, okay,

523
00:31:46,876 --> 00:31:49,996
Speaker 2: that's a drilling rig for oil and gas. And that's

524
00:31:49,996 --> 00:31:53,716
Speaker 2: also in Houston. We're using Neighbors Industries as a partner

525
00:31:54,876 --> 00:32:00,196
Speaker 2: and we've given superpowers to their drilling rig for the

526
00:32:00,236 --> 00:32:04,396
Speaker 2: same purposes. But because it's bigger, you can go thousands

527
00:32:04,436 --> 00:32:07,796
Speaker 2: of meters and you can drill bigger holes with more pipe.

528
00:32:08,636 --> 00:32:12,916
Speaker 2: That is what gets us into commercial relevance for geothermal.

529
00:32:12,956 --> 00:32:15,756
Speaker 2: The little one doesn't do that. It's just for show,

530
00:32:16,116 --> 00:32:17,676
Speaker 2: But the big one does that.

531
00:32:18,276 --> 00:32:20,076
Speaker 1: When you're going to make a hole with the big one.

532
00:32:20,796 --> 00:32:23,596
Speaker 2: Oh, it's already happening, but it's happening at a small

533
00:32:23,676 --> 00:32:27,676
Speaker 2: scale in a yard underneath the rig, in a well.

534
00:32:28,596 --> 00:32:31,796
Speaker 2: We're we're gonna show it off at Sarah Week in

535
00:32:31,916 --> 00:32:35,636
Speaker 2: Houston in March. But I think the real question is

536
00:32:35,756 --> 00:32:37,836
Speaker 2: when can I go to the field and see it

537
00:32:37,876 --> 00:32:39,716
Speaker 2: in action. When is it drilling a hole that no

538
00:32:39,836 --> 00:32:43,036
Speaker 2: drill big can drill. And that's in twenty twenty six

539
00:32:43,156 --> 00:32:45,356
Speaker 2: and twenty seven as part of these commercial projects.

540
00:32:45,436 --> 00:32:47,676
Speaker 1: So there's a till you've made that's public with a

541
00:32:47,836 --> 00:32:50,356
Speaker 1: gold mine in Nevada? Is that right? Tell me about that.

542
00:32:51,636 --> 00:32:54,636
Speaker 2: So this is a mining operation. Is I think it's

543
00:32:54,676 --> 00:32:57,316
Speaker 2: the third largest gold mine in the world, and it's

544
00:32:57,316 --> 00:33:01,196
Speaker 2: in Nevada. And they have their own, their very own

545
00:33:01,276 --> 00:33:03,996
Speaker 2: coal fired power plant. It's a two hundred and fifty

546
00:33:03,996 --> 00:33:07,996
Speaker 2: megawa coal firepower plant that they use as part of

547
00:33:08,036 --> 00:33:10,476
Speaker 2: the electricity require for the operation. And they want to

548
00:33:10,516 --> 00:33:14,996
Speaker 2: decarbonize that. And they've looked and looked and looked, and

549
00:33:15,036 --> 00:33:17,316
Speaker 2: they've tried solar and they've tried batters, and they said, no,

550
00:33:17,436 --> 00:33:19,516
Speaker 2: nothing can do it. We're not convinced by anything. Not

551
00:33:19,556 --> 00:33:23,116
Speaker 2: even the other geo thermal companies that are out there,

552
00:33:23,636 --> 00:33:27,316
Speaker 2: you know, growing and making it happen. They're not good

553
00:33:27,436 --> 00:33:31,476
Speaker 2: enough for that level of power required. So they looked

554
00:33:31,476 --> 00:33:33,996
Speaker 2: at us and said, Okay, your stuff can repower a

555
00:33:34,036 --> 00:33:38,556
Speaker 2: power plant because it's that hot, that powerful. So that's

556
00:33:38,596 --> 00:33:42,356
Speaker 2: the nature of that conversation. With them. We can repower

557
00:33:42,436 --> 00:33:47,756
Speaker 2: their power plant by retiring the cold and replacing it

558
00:33:47,796 --> 00:33:48,916
Speaker 2: with the geodermal hit.

559
00:33:49,676 --> 00:33:51,316
Speaker 1: And that's the only one that's public.

560
00:33:51,356 --> 00:33:54,116
Speaker 2: You have several projects, but that's the only one that's public.

561
00:33:54,276 --> 00:33:57,796
Speaker 2: That's right, that's right. So there are five projects in

562
00:33:57,836 --> 00:34:01,036
Speaker 2: the works, one of which is public, but the other

563
00:34:01,236 --> 00:34:05,036
Speaker 2: four are of a similar nature, not all not not

564
00:34:05,156 --> 00:34:10,036
Speaker 2: for gold mines, but for multiple industrial use cases. There's

565
00:34:10,236 --> 00:34:12,476
Speaker 2: probably one that's going to be a data center one

566
00:34:12,596 --> 00:34:15,196
Speaker 2: I can say as much. There's some that are going

567
00:34:15,236 --> 00:34:18,316
Speaker 2: to be industrial heat, because that's also another value proposition.

568
00:34:18,356 --> 00:34:21,236
Speaker 2: But all of them share one characteristic. They're large. There

569
00:34:21,276 --> 00:34:25,596
Speaker 2: are hundreds of megawads. They're coal fire or gas fire,

570
00:34:25,676 --> 00:34:30,156
Speaker 2: and we're going to retire that. And they need firm,

571
00:34:30,516 --> 00:34:35,156
Speaker 2: clean energy. They cannot do with intermittency, they cannot make

572
00:34:35,276 --> 00:34:39,956
Speaker 2: with transmission cues. They really need a power.

573
00:34:39,796 --> 00:34:42,676
Speaker 1: They need a dedicated power plant that is always producing

574
00:34:42,756 --> 00:34:46,356
Speaker 1: power for just their data center or whatever.

575
00:34:46,476 --> 00:34:48,596
Speaker 2: Yeah, that's a good way to put it. These are

576
00:34:48,636 --> 00:34:53,076
Speaker 2: the big, big users that are having a hard time

577
00:34:53,156 --> 00:34:55,436
Speaker 2: finding solutions to the carbonized.

578
00:34:56,716 --> 00:34:59,916
Speaker 1: So how much deeper do you have to go for

579
00:34:59,996 --> 00:35:04,036
Speaker 1: these initial projects than sort of standard or even kind

580
00:35:04,036 --> 00:35:06,716
Speaker 1: of standard modern geothermal companies would go.

581
00:35:09,116 --> 00:35:13,676
Speaker 2: So three to five kilometers down, that's about two to

582
00:35:13,756 --> 00:35:19,236
Speaker 2: three miles is the beginning of that journey. And these

583
00:35:19,276 --> 00:35:22,636
Speaker 2: initial projects are that that depth. The first and the

584
00:35:22,716 --> 00:35:25,876
Speaker 2: second are that. The third one than Nevada. If that

585
00:35:25,916 --> 00:35:29,116
Speaker 2: comes third, it's a little bit deeper than that. So

586
00:35:29,236 --> 00:35:32,716
Speaker 2: the journey starts at two to three miles down, and

587
00:35:32,796 --> 00:35:35,276
Speaker 2: that's good. That's important because you can get the job

588
00:35:35,356 --> 00:35:40,276
Speaker 2: done without having to go crazy deep. But it progresses

589
00:35:41,156 --> 00:35:45,156
Speaker 2: towards twelve miles. We think twelve miles is the final number.

590
00:35:45,236 --> 00:35:46,476
Speaker 2: We don't need to go beyond that.

591
00:35:46,796 --> 00:35:50,036
Speaker 1: I mean, twelve miles is an order of magnitude farther

592
00:35:50,156 --> 00:35:52,676
Speaker 1: than people go. Now right, it's a lot farther. It's

593
00:35:52,716 --> 00:35:53,276
Speaker 1: not margin.

594
00:35:53,396 --> 00:35:55,916
Speaker 2: Yeah, twelve miles is twenty kilometers on the average is

595
00:35:55,916 --> 00:35:58,316
Speaker 2: about two kilometers. So yes, it's a ten x it's

596
00:35:58,316 --> 00:36:01,356
Speaker 2: a TENNX improvement in depth. But at that point you're

597
00:36:01,356 --> 00:36:06,196
Speaker 2: talking about humanity having access to industrial grade geothermal, you know,

598
00:36:06,236 --> 00:36:07,516
Speaker 2: and that's a journey.

599
00:36:07,236 --> 00:36:09,956
Speaker 1: That humanity meaning it'll work if you can go that deep.

600
00:36:10,036 --> 00:36:13,236
Speaker 1: You can do geothermal everywhere, basically.

601
00:36:13,476 --> 00:36:18,196
Speaker 2: Not just that you can do industrial great heat from geothermal,

602
00:36:18,236 --> 00:36:20,356
Speaker 2: which is quite different. You can do geothermal in many,

603
00:36:20,356 --> 00:36:23,396
Speaker 2: many places. That's just for bats or agriculture. We're talking

604
00:36:23,396 --> 00:36:27,956
Speaker 2: about fossil true fossil replacements.

605
00:36:27,156 --> 00:36:29,436
Speaker 1: Like the kind of crazy heat that lots of industrial

606
00:36:29,476 --> 00:36:32,596
Speaker 1: processes require that now you have to burn fossil fuels.

607
00:36:32,236 --> 00:36:34,876
Speaker 2: For that's right, and you can do it everywhere. That's

608
00:36:34,916 --> 00:36:38,276
Speaker 2: really what we're talking about. Hot and deep, not just

609
00:36:38,356 --> 00:36:44,636
Speaker 2: hot and not just deep both. So just tell me

610
00:36:44,676 --> 00:36:47,036
Speaker 2: what it looks like when you make one of these.

611
00:36:48,116 --> 00:36:50,516
Speaker 2: I went to see it and it existed in the world,

612
00:36:50,956 --> 00:36:52,196
Speaker 2: your geothermal plant.

613
00:36:52,236 --> 00:36:53,876
Speaker 1: What would I see? What would it look like?

614
00:36:56,476 --> 00:36:59,556
Speaker 2: You wouldn't be able to tell it's anything special. It

615
00:36:59,556 --> 00:37:00,756
Speaker 2: looks like a power plant.

616
00:37:01,676 --> 00:37:05,116
Speaker 1: How big around is the hole? What's the diameter of

617
00:37:05,156 --> 00:37:05,436
Speaker 1: the whole?

618
00:37:06,116 --> 00:37:08,036
Speaker 2: Eight inch diameter of basketball size?

619
00:37:08,116 --> 00:37:10,836
Speaker 1: A basketball size, so you could you could drop a

620
00:37:10,956 --> 00:37:14,716
Speaker 1: volleyball down the hole, but not a basketball basketball Betoien.

621
00:37:15,076 --> 00:37:18,156
Speaker 2: Yeah, it's about an eight and a half inch diameter

622
00:37:18,836 --> 00:37:21,716
Speaker 2: four two hundred megawats of thermal energy.

623
00:37:22,156 --> 00:37:24,756
Speaker 1: And if if you drill the twelve mile hole of

624
00:37:24,796 --> 00:37:27,876
Speaker 1: your dreams and I dropped a penny down the hole,

625
00:37:27,916 --> 00:37:29,596
Speaker 1: how long would it take to hit the bottom.

626
00:37:31,236 --> 00:37:35,596
Speaker 2: Oh, a free fall of twelve miles twenty kilometers, it

627
00:37:35,676 --> 00:37:38,676
Speaker 2: would take I don't know, three minutes, two to three minutes. Yeah,

628
00:37:39,236 --> 00:37:41,676
Speaker 2: it's like jumping. It's like jumping from an airplane. I

629
00:37:41,676 --> 00:37:43,156
Speaker 2: mean an airplane flies half.

630
00:37:42,996 --> 00:37:46,436
Speaker 1: That more, right, it's twice as long as deep as

631
00:37:46,436 --> 00:37:48,476
Speaker 1: an airplane is high.

632
00:37:48,716 --> 00:37:50,996
Speaker 2: Yeah, the twelve mile version. Yet we remember we don't

633
00:37:50,996 --> 00:37:53,436
Speaker 2: start with twelve miles. But yes, you're right, it takes

634
00:37:54,036 --> 00:37:57,196
Speaker 2: it takes that long to fall.

635
00:37:57,356 --> 00:37:58,196
Speaker 1: Yeah.

636
00:37:58,596 --> 00:38:01,676
Speaker 2: Now it's full of water, so it sings rather than fall,

637
00:38:01,796 --> 00:38:02,876
Speaker 2: so it probably would take longer.

638
00:38:02,996 --> 00:38:04,996
Speaker 1: Oh right, a slow water. So right, so you don't

639
00:38:05,076 --> 00:38:07,276
Speaker 1: just drill one hole, right, you drill a hole to

640
00:38:07,316 --> 00:38:09,196
Speaker 1: get down to the heat and then and.

641
00:38:11,076 --> 00:38:14,756
Speaker 2: Then what Yeah, so you do? They coming in pairs,

642
00:38:14,796 --> 00:38:18,676
Speaker 2: always in pairs. One for the weight down. We call

643
00:38:18,756 --> 00:38:22,196
Speaker 2: that an injector, and one for the weight up. We

644
00:38:22,356 --> 00:38:26,916
Speaker 2: call that a producer. The pair is eight inch eight

645
00:38:26,956 --> 00:38:30,036
Speaker 2: and a half inch in diameter each, and they go

646
00:38:30,156 --> 00:38:33,076
Speaker 2: down to the source rock down below at the temperature

647
00:38:33,116 --> 00:38:37,116
Speaker 2: we want it to be, and that pair produces as

648
00:38:37,156 --> 00:38:41,716
Speaker 2: much energy as an oil whale pair injector producer. That's

649
00:38:41,756 --> 00:38:42,556
Speaker 2: a key concept.

650
00:38:43,596 --> 00:38:47,716
Speaker 1: And so injector producer is like, what you're injecting is water,

651
00:38:47,916 --> 00:38:50,316
Speaker 1: and what's coming back up is steam.

652
00:38:50,636 --> 00:38:53,036
Speaker 2: That is correct. In fact, you keep it under high pressure.

653
00:38:53,076 --> 00:38:58,036
Speaker 2: So what comes up is superheated liquid which can flash

654
00:38:58,076 --> 00:39:01,756
Speaker 2: into steam or supercritical water. And that's what you fit

655
00:39:01,796 --> 00:39:05,276
Speaker 2: into the power plant, not directly but through heat exchangers

656
00:39:05,316 --> 00:39:08,596
Speaker 2: for many reasons. But that's really what's that's the engine,

657
00:39:08,676 --> 00:39:09,956
Speaker 2: that's the fuel source.

658
00:39:13,756 --> 00:39:20,196
Speaker 1: There any like weird unintended consequences like earthquakes.

659
00:39:20,076 --> 00:39:23,036
Speaker 2: Those are possible, right every time you pump into the earth,

660
00:39:23,076 --> 00:39:27,436
Speaker 2: that's a possibility, especially if you go into fault faulty songs.

661
00:39:28,196 --> 00:39:30,036
Speaker 2: But remember what I told you. We don't pump, we

662
00:39:30,076 --> 00:39:34,716
Speaker 2: don't ramp pressure into the earth. We just fill a

663
00:39:34,756 --> 00:39:37,996
Speaker 2: hole with cold water and nature does the rest. In fact,

664
00:39:38,036 --> 00:39:40,676
Speaker 2: we're replicating a process that happens in nature at scale.

665
00:39:40,716 --> 00:39:43,596
Speaker 2: That's how every mind in the world gets formed. So

666
00:39:44,596 --> 00:39:46,396
Speaker 2: will there be earth bakes? I think if you do

667
00:39:46,516 --> 00:39:48,876
Speaker 2: this in the wrong place in a big fall, there

668
00:39:48,956 --> 00:39:50,756
Speaker 2: is a risk for that. But if you did do

669
00:39:50,876 --> 00:39:53,916
Speaker 2: this in most places in the world, there's no faults

670
00:39:55,316 --> 00:39:57,756
Speaker 2: of the kind of mentioning here, there shouldn't be a

671
00:39:57,796 --> 00:40:00,396
Speaker 2: reason for that, So anything else.

672
00:40:00,316 --> 00:40:05,436
Speaker 1: Like that, any other weird geological activity.

673
00:40:04,996 --> 00:40:10,836
Speaker 2: That that could happen as a as a consequence, I

674
00:40:10,876 --> 00:40:12,956
Speaker 2: don't think so. I mean, you cool the rock ten

675
00:40:13,036 --> 00:40:17,156
Speaker 2: degrees twenty degrees over the lifetime of the asset, and

676
00:40:17,196 --> 00:40:20,156
Speaker 2: then you move on. So that's a very small cool

677
00:40:20,236 --> 00:40:23,996
Speaker 2: down out. We are pricking. It's like a needle, tiny

678
00:40:24,196 --> 00:40:27,316
Speaker 2: needle prick in the skin to mine a little bit

679
00:40:27,316 --> 00:40:30,276
Speaker 2: of it of that, you know, but this is regulated.

680
00:40:30,396 --> 00:40:32,436
Speaker 2: So I'm not gonna say that there's zero risk. There's

681
00:40:32,436 --> 00:40:37,236
Speaker 2: always risk. But the earthquakes that are associated with geothermal

682
00:40:37,316 --> 00:40:39,676
Speaker 2: are of a very different kind and are usually because

683
00:40:39,716 --> 00:40:43,436
Speaker 2: you're crambing pressure with pumping trucks into the earth. We're

684
00:40:43,436 --> 00:40:44,076
Speaker 2: not doing that.

685
00:40:44,796 --> 00:40:46,996
Speaker 1: What do you do with the dust that you blow

686
00:40:47,036 --> 00:40:47,516
Speaker 1: back up?

687
00:40:49,476 --> 00:40:53,116
Speaker 2: It's wonderfully useful for many, many things, and you cannot

688
00:40:53,156 --> 00:40:56,676
Speaker 2: just discharge that. You know, that's particulate matter, So you

689
00:40:56,756 --> 00:40:59,396
Speaker 2: treat it, you separate it, and some of it will

690
00:40:59,436 --> 00:41:04,396
Speaker 2: find value streams in industry, and you think the value

691
00:41:05,516 --> 00:41:08,956
Speaker 2: the value of it will sort of offset the cost

692
00:41:08,956 --> 00:41:11,676
Speaker 2: of treating it enough that it's not gonna mess up

693
00:41:11,676 --> 00:41:14,996
Speaker 2: your economics for some for some things, not for everything.

694
00:41:15,156 --> 00:41:17,836
Speaker 2: Some things you just you just leave them in an

695
00:41:17,836 --> 00:41:22,156
Speaker 2: inert neutral state, like cuttings in a in a drill rig.

696
00:41:22,196 --> 00:41:24,116
Speaker 2: You know what do you do with the cuttings. You

697
00:41:24,156 --> 00:41:26,716
Speaker 2: don't just dump them overboard in off short breaks. You

698
00:41:27,156 --> 00:41:29,596
Speaker 2: treat them. There's regulation about that, and you dispose of

699
00:41:29,596 --> 00:41:33,636
Speaker 2: them properly. You make them inert. Some will be valuable,

700
00:41:33,676 --> 00:41:36,436
Speaker 2: but you know, we don't put that into the techn economics.

701
00:41:37,476 --> 00:41:39,076
Speaker 2: But we know that these things will be valid.

702
00:41:39,156 --> 00:41:41,316
Speaker 1: So when you're modeling it, you assume that that's just

703
00:41:41,356 --> 00:41:46,756
Speaker 1: a pure cost, and even even at that estimation, you

704
00:41:46,796 --> 00:41:48,716
Speaker 1: think you can correct.

705
00:41:48,796 --> 00:41:51,316
Speaker 2: Yeah, it's it's the business is the business of energy.

706
00:41:51,476 --> 00:41:53,996
Speaker 2: That is the techn economic model. How much does it

707
00:41:54,036 --> 00:41:56,756
Speaker 2: cost to get to the energy, to produce it, to

708
00:41:56,876 --> 00:41:59,156
Speaker 2: operate it, and how much does itself for That is

709
00:41:59,156 --> 00:41:59,916
Speaker 2: the business model.

710
00:42:00,756 --> 00:42:08,116
Speaker 1: So give me the like, like, give me the long view.

711
00:42:08,236 --> 00:42:10,876
Speaker 2: We've been talking about little things. I've been asking about

712
00:42:10,876 --> 00:42:14,996
Speaker 2: this detail in that detail, like what's the big picture,

713
00:42:15,436 --> 00:42:20,556
Speaker 2: the five year picture of the tenure picture. So in

714
00:42:20,636 --> 00:42:23,716
Speaker 2: the five years, we're doing the first five projects or

715
00:42:23,756 --> 00:42:26,436
Speaker 2: achieving bank ability. So that's still in the details, that's

716
00:42:26,436 --> 00:42:29,356
Speaker 2: in the weeds. The company is really trying to break

717
00:42:29,356 --> 00:42:34,276
Speaker 2: through into true commercial scale. But the big view of

718
00:42:34,276 --> 00:42:38,436
Speaker 2: the reason I do this is because the day the

719
00:42:38,476 --> 00:42:42,356
Speaker 2: oil industry looks at a geothermal project with the same

720
00:42:42,596 --> 00:42:44,876
Speaker 2: eyes that they look at an oil and gas project,

721
00:42:46,356 --> 00:42:49,276
Speaker 2: you've won. Huh, that's the beginning of the end.

722
00:42:49,436 --> 00:42:52,476
Speaker 1: It's interesting to have the sort of oil and gas

723
00:42:52,516 --> 00:42:56,796
Speaker 1: industry centric view of the energy transition, Like, why do

724
00:42:56,836 --> 00:42:57,396
Speaker 1: you say that?

725
00:42:59,156 --> 00:43:02,396
Speaker 2: Ever since you and I have been alive, the oil industry,

726
00:43:02,636 --> 00:43:07,076
Speaker 2: the workforce, the capital, the regulation, the infrastructure, has been

727
00:43:07,116 --> 00:43:12,196
Speaker 2: putting into the world two terra watts of new capacity

728
00:43:12,996 --> 00:43:18,396
Speaker 2: simply to keep up with not growing but stable demand.

729
00:43:19,076 --> 00:43:21,876
Speaker 2: Let me say that again, oil feels decline in production.

730
00:43:22,396 --> 00:43:25,156
Speaker 2: Just to keep up with the amount of energy that

731
00:43:25,516 --> 00:43:30,636
Speaker 2: we humans consume, they need to bring online new capacity

732
00:43:31,556 --> 00:43:36,116
Speaker 2: that adds up to about two terrawats per year. There's

733
00:43:36,196 --> 00:43:39,636
Speaker 2: nothing like it, not even by orders. Manage the closeness

734
00:43:39,676 --> 00:43:42,876
Speaker 2: to it. If it doesn't involve the oil industry, it

735
00:43:42,956 --> 00:43:46,636
Speaker 2: won't happen in this generation. It will take longer, and

736
00:43:46,836 --> 00:43:50,116
Speaker 2: the oil industry is not going to do the job

737
00:43:50,716 --> 00:43:55,116
Speaker 2: if it implies a compromise for them. Geothermal is a compromise.

738
00:43:55,156 --> 00:43:57,556
Speaker 2: It's like okay, yeah, I'm going to encouras much cost

739
00:43:57,636 --> 00:43:59,516
Speaker 2: and as much risk, and I'm going to get a

740
00:43:59,596 --> 00:44:03,076
Speaker 2: fraction of the profit back. Why would I do geothermal

741
00:44:03,116 --> 00:44:05,916
Speaker 2: when I can do oil and gas. So that is

742
00:44:05,956 --> 00:44:08,156
Speaker 2: the game I need to play with them. The minute

743
00:44:08,276 --> 00:44:11,996
Speaker 2: they look at geo thermal the same way, the same

744
00:44:12,036 --> 00:44:14,876
Speaker 2: profit margin, is the same skill, the same business opportunity

745
00:44:14,876 --> 00:44:18,396
Speaker 2: as they do oil on gus, You've won because at

746
00:44:18,396 --> 00:44:21,156
Speaker 2: that point they will take it over and do it

747
00:44:21,196 --> 00:44:24,476
Speaker 2: at the tutor awatskill plus and then you transition energy

748
00:44:25,076 --> 00:44:29,516
Speaker 2: until then we're playing another manitude out of the league

749
00:44:29,556 --> 00:44:30,636
Speaker 2: that we need to be playing at.

750
00:44:34,236 --> 00:44:47,316
Speaker 1: We'll be back in a minute with the lightning round. Okay,

751
00:44:47,316 --> 00:44:51,956
Speaker 1: we're gonna finish with the lightning round. It's gonna be

752
00:44:52,036 --> 00:44:56,156
Speaker 1: much more random. What one thing you did when you

753
00:44:56,196 --> 00:44:58,356
Speaker 1: served in the Colombian Army after high school?

754
00:44:59,556 --> 00:45:04,236
Speaker 2: I trained to be a soldier, so I very much

755
00:45:04,276 --> 00:45:10,036
Speaker 2: went through weaponrytraining, military approaches and assaults, and I actually

756
00:45:10,076 --> 00:45:16,796
Speaker 2: went into operations totally, not into a war zone, but

757
00:45:16,876 --> 00:45:21,036
Speaker 2: that was my military training. I was a soldier for

758
00:45:21,116 --> 00:45:22,916
Speaker 2: a year before coming to m T.

759
00:45:24,276 --> 00:45:26,276
Speaker 1: Yeah, so what's that like. You grew up in Medigan,

760
00:45:26,636 --> 00:45:28,956
Speaker 1: you were a soldier, and then you went to M

761
00:45:29,036 --> 00:45:33,836
Speaker 1: I t like what was what was one surprising thing

762
00:45:33,876 --> 00:45:34,916
Speaker 1: to you when you got there?

763
00:45:36,556 --> 00:45:40,716
Speaker 2: Life changing? So I think I fell at home at

764
00:45:40,796 --> 00:45:46,196
Speaker 2: MIT in many many ways. I was always very curious

765
00:45:46,196 --> 00:45:49,076
Speaker 2: about physics, engineering. I would do many things by myself,

766
00:45:49,716 --> 00:45:51,676
Speaker 2: and I would never feel quite at home in Columbia.

767
00:45:51,636 --> 00:45:53,916
Speaker 2: I would never find the groups or the university for

768
00:45:54,036 --> 00:45:56,396
Speaker 2: the classes that would satisfy me. MIT, for the first

769
00:45:56,436 --> 00:46:00,756
Speaker 2: time ever in my life, gave me that what's one

770
00:46:00,756 --> 00:46:03,956
Speaker 2: thing I should do if I go to Medagan, Oh,

771
00:46:04,036 --> 00:46:07,276
Speaker 2: my god, one thing impossible. We have to do one

772
00:46:07,356 --> 00:46:12,236
Speaker 2: hundred things. You should go and get into the rich

773
00:46:12,316 --> 00:46:14,516
Speaker 2: songs of the city, the bosons of the city, and

774
00:46:14,636 --> 00:46:17,836
Speaker 2: just so giddling. Then you should also eat because there's food,

775
00:46:17,916 --> 00:46:18,756
Speaker 2: good food everywhere.

776
00:46:18,756 --> 00:46:19,756
Speaker 1: What's one thing I should eat?

777
00:46:20,956 --> 00:46:24,756
Speaker 2: But they have AISA, but you should share that because

778
00:46:24,796 --> 00:46:27,596
Speaker 2: it's probably five thousand calories at least.

779
00:46:28,116 --> 00:46:28,636
Speaker 1: What is it?

780
00:46:30,516 --> 00:46:37,436
Speaker 2: Combination of rice, beans, meat, pork, rins, plantains, avocado, and

781
00:46:37,596 --> 00:46:40,316
Speaker 2: arib which is a corn patty.

782
00:46:40,596 --> 00:46:43,436
Speaker 1: Very basically it's everything. It's basically everything.

783
00:46:43,796 --> 00:46:46,596
Speaker 2: Oh maybe a Friday too, So yes, it's everything. It's

784
00:46:46,676 --> 00:46:50,236
Speaker 2: very large, very satisfying, very delicious, not to be eaten

785
00:46:50,276 --> 00:46:50,796
Speaker 2: every day.

786
00:46:53,396 --> 00:46:56,156
Speaker 1: What was the second best idea you heard when you

787
00:46:56,196 --> 00:46:58,476
Speaker 1: were working as a venture capitalist at.

788
00:46:58,316 --> 00:47:02,796
Speaker 2: AH It must have been the approach to fusion. I

789
00:47:02,876 --> 00:47:06,116
Speaker 2: was in the room with Bob Momtguard first approached the

790
00:47:06,196 --> 00:47:09,956
Speaker 2: engine to say, hey, we have these tape to make

791
00:47:09,996 --> 00:47:12,316
Speaker 2: a stronger magnet. And I say, oh, this is a

792
00:47:12,436 --> 00:47:15,036
Speaker 2: very very good idea, because that's a very good approach

793
00:47:15,076 --> 00:47:18,916
Speaker 2: to actually get going with fusion single handedly. If I

794
00:47:18,956 --> 00:47:21,396
Speaker 2: were not doing ways, that's where I would probably be

795
00:47:21,436 --> 00:47:23,196
Speaker 2: putting my life forcings.

796
00:47:23,596 --> 00:47:27,796
Speaker 1: I mean, it's maybe even more of a long shot,

797
00:47:28,036 --> 00:47:30,516
Speaker 1: but even bigger if it works.

798
00:47:30,596 --> 00:47:34,916
Speaker 2: Right, Oh, I think so that is the ultimate energy source.

799
00:47:35,156 --> 00:47:38,436
Speaker 2: Ultimate We didn't talk about it. Why not fusion? Well, yes,

800
00:47:38,516 --> 00:47:40,596
Speaker 2: fusion is the way to do it, But why not

801
00:47:40,676 --> 00:47:44,196
Speaker 2: fusion has to do simply with building the infrastructure, the

802
00:47:44,236 --> 00:47:47,516
Speaker 2: human capital. Everything needs to be built. It doesn't exist.

803
00:47:47,636 --> 00:47:51,596
Speaker 2: The industry needs hasn't been born, the humans haven't been

804
00:47:51,636 --> 00:47:53,996
Speaker 2: born at skill to do it. And I think geo

805
00:47:54,076 --> 00:47:57,196
Speaker 2: politics will play a very strong role. These are devices,

806
00:47:57,236 --> 00:47:59,836
Speaker 2: These are machines. To me, they are like an F

807
00:47:59,916 --> 00:48:02,516
Speaker 2: twenty two and F thirty five. These are things that

808
00:48:02,556 --> 00:48:06,356
Speaker 2: you don't give to everybody or seldom. They're not for sale. Yeah,

809
00:48:06,436 --> 00:48:08,996
Speaker 2: they're not for sale, and yes, but we'll probably agree

810
00:48:09,036 --> 00:48:10,316
Speaker 2: with I mean, you can make them go for sale,

811
00:48:10,356 --> 00:48:13,316
Speaker 2: but think about it. You sell airplanes to other nations,

812
00:48:13,316 --> 00:48:15,476
Speaker 2: but you don't sell f thirty fives. You know, these

813
00:48:15,476 --> 00:48:19,276
Speaker 2: are so differentiated that they become geopolitically sensitive.

814
00:48:19,756 --> 00:48:22,396
Speaker 1: Like whatever country figures it out is going to say,

815
00:48:22,396 --> 00:48:24,396
Speaker 1: we're not giving this to anybody, We're keeping it. We're

816
00:48:24,436 --> 00:48:26,556
Speaker 1: only going to give it to our friends, something like that.

817
00:48:26,676 --> 00:48:30,476
Speaker 2: It's the ultimate company of advantage, the ultimate company.

818
00:48:30,436 --> 00:48:31,716
Speaker 1: Free unlimited energy.

819
00:48:31,836 --> 00:48:37,116
Speaker 2: Yeah, yes, yes, forget about everything else. That's it. You've

820
00:48:37,276 --> 00:48:37,676
Speaker 2: done it.

821
00:48:39,596 --> 00:48:43,196
Speaker 1: What pun are you most tired of hearing related to

822
00:48:43,356 --> 00:48:44,796
Speaker 1: Quays to your work?

823
00:48:45,556 --> 00:48:50,956
Speaker 2: The funds make themselves in geotheraphone, Yeah right, I enjoy

824
00:48:50,996 --> 00:48:51,476
Speaker 2: them all.

825
00:48:51,636 --> 00:48:53,356
Speaker 1: But what's your favorite? Then?

826
00:48:54,076 --> 00:48:57,156
Speaker 2: My favor is we we gotta keep digging deeper to

827
00:48:57,196 --> 00:48:58,196
Speaker 2: solve energy transition.

828
00:49:05,356 --> 00:49:08,956
Speaker 1: Carlos Arake is the co founder and CEO of Quays And.

829
00:49:10,436 --> 00:49:13,716
Speaker 1: Today's show was produced by Gabriel Hunter Cheng. It was

830
00:49:13,996 --> 00:49:17,436
Speaker 1: edited by Lyddy Jean Kott and engineered by Sarah Bruger.

831
00:49:17,916 --> 00:49:21,436
Speaker 1: You can email us at problem at Pushkin dot Fm.

832
00:49:21,676 --> 00:49:23,996
Speaker 1: I'm Jacob Goldstein and we'll be back next week with

833
00:49:24,076 --> 00:49:35,476
Speaker 1: another episode of What's Your Problem.