WEBVTT - Harnessing the Heat Deep Beneath Our Feet 0:00:15.356 --> 0:00:24.836 Pushkin. Here's the standard story of the energy transition. To 0:00:24.876 --> 0:00:27.756 get to our post carbon future. We just need some 0:00:27.916 --> 0:00:33.156 combination of wind and solar power plus energy storage plus 0:00:33.356 --> 0:00:36.636 nuclear power. Those together ought to do it. That's a 0:00:36.676 --> 0:00:38.636 story I've told on this show. It's a story lots 0:00:38.636 --> 0:00:42.916 of people have told on lots of shows. But I 0:00:42.996 --> 0:00:47.116 recently talked to a guy named Carlos Arake who made 0:00:47.156 --> 0:00:51.436 a compelling case that this story is not true, that 0:00:51.476 --> 0:00:56.116 it's not going to work for a variety of reasons, technical, economic, political, 0:00:56.636 --> 0:00:59.956 Wind and solar plus storage plus nuclear are just going 0:01:00.036 --> 0:01:03.876 to be too slow to build, too inefficient, too politically 0:01:03.916 --> 0:01:07.476 complex to deliver all the carbon free energy that the 0:01:07.516 --> 0:01:12.076 world needs. Or Carlos has another idea. It's kind of 0:01:12.116 --> 0:01:14.076 out there, but he's raised a lot of money to 0:01:14.116 --> 0:01:18.156 do it. His idea is this, shoot a high energy 0:01:18.196 --> 0:01:22.516 beam down into the ground until we've dug a hole 0:01:22.836 --> 0:01:28.396 eight inches wide and twelve miles deep. Basically, he wants 0:01:28.436 --> 0:01:32.396 to reinvent geothermal energy. He wants to harvest the heat 0:01:32.516 --> 0:01:35.836 energy that's just sitting down there all over the world 0:01:36.276 --> 0:01:38.796 waiting for us to get it. He says, if he 0:01:38.796 --> 0:01:41.396 can figure out how to do that, you know, cheaply, efficiently, 0:01:41.516 --> 0:01:46.476 at scale, our energy problems will be solved. But nobody 0:01:46.516 --> 0:01:50.356 has ever dug a hole nearly this deep. Carlos's own 0:01:50.356 --> 0:01:53.516 company hasn't started drilling deep wells yet, and so the 0:01:53.556 --> 0:01:55.756 whole project is, you know, at this point something of 0:01:55.796 --> 0:01:59.716 a long shot. Still, Carlos and his colleagues have raised 0:01:59.716 --> 0:02:03.476 somewhere around one hundred million dollars, and if they succeed 0:02:03.516 --> 0:02:05.916 in what they're trying to do, it will infect be 0:02:05.996 --> 0:02:16.756 this incredible new source of clean energy. I'm Jacob Goldstein, 0:02:16.796 --> 0:02:18.476 and this is What's Your Problem? The show where I 0:02:18.476 --> 0:02:21.196 talk to people who are trying to make technological progress. 0:02:21.676 --> 0:02:24.756 My guest today is Carlos Arake. He's the co founder 0:02:24.796 --> 0:02:29.756 and CEO of Quay's Energy. Carlos's problem is this, how 0:02:29.756 --> 0:02:33.636 do you make drilling for geothermal energy as routine and 0:02:33.716 --> 0:02:38.156 widespread and profitable as drilling for oil or natural gas. 0:02:38.636 --> 0:02:42.076 Carlos knows in great detail how routine and widespread and 0:02:42.116 --> 0:02:45.356 profitable drilling for oil and gas is because he spent 0:02:45.396 --> 0:02:48.756 the first fifteen years of his career working at Schlumberge, 0:02:48.956 --> 0:02:51.756 a giant firm that provides services to oil and gas 0:02:51.756 --> 0:02:55.316 companies and to start. I asked Carlos how he made 0:02:55.316 --> 0:02:57.516 the leap from working at this one hundred year old 0:02:57.516 --> 0:03:00.276 company in the fossil fuel business to starting a company 0:03:00.356 --> 0:03:03.116 that's trying to move the world off of fossil fuel. 0:03:05.556 --> 0:03:10.836 I think it goes back to much before I quit. 0:03:11.036 --> 0:03:13.316 I quit in twenty seventeen, and I think I can 0:03:13.396 --> 0:03:17.036 remember as far back as twenty ten, when I started 0:03:17.036 --> 0:03:21.196 to become very familiar with the oil industry, the amount 0:03:21.236 --> 0:03:23.876 of energy we use as a civilization, how it's growing 0:03:23.876 --> 0:03:27.316 over time, when I started thinking about what it would 0:03:27.316 --> 0:03:30.356 take to transition away from fossil fuels. 0:03:31.516 --> 0:03:35.156 So like, in a way, working in the fossil fuel industry, 0:03:35.196 --> 0:03:37.956 it gave you an appreciation for how hard it will 0:03:38.036 --> 0:03:40.996 be to transition away from fossil fuels. 0:03:41.796 --> 0:03:43.436 Very much so, very much. 0:03:43.476 --> 0:03:43.556 So. 0:03:43.596 --> 0:03:46.156 It's just the sheer numbers how much energy it takes 0:03:46.156 --> 0:03:53.036 to power humanity today. It's just an awakening moment to say, Okay, 0:03:53.116 --> 0:03:56.236 there's no way we're going to be able to do 0:03:56.276 --> 0:04:02.036 this with wings, solar batteries, hydro nuclear, etcetera, etcetera. So 0:04:02.236 --> 0:04:05.596 that's when the search started. It had to be something 0:04:06.796 --> 0:04:12.196 at the scale of oil and gas, and it had 0:04:12.196 --> 0:04:17.076 to be something that solved for the environmental challenge, but 0:04:17.236 --> 0:04:25.756 also other challenges geopolitical, socio economic and environmental emissions, land use, 0:04:26.156 --> 0:04:28.636 mineral use, all of those things need to be sold for. 0:04:30.036 --> 0:04:32.996 And I wasn't seeing anything on the landscape at all. 0:04:33.036 --> 0:04:34.636 So that's the beginning of that inkling. 0:04:35.756 --> 0:04:36.556 And when was that? 0:04:36.676 --> 0:04:38.716 When was it that you left? So I think I 0:04:38.756 --> 0:04:40.876 was living in Norway at the time. I was working 0:04:40.876 --> 0:04:44.196 for somebody in Norway, and that's when I started thinking 0:04:44.196 --> 0:04:47.796 about these things, mostly seeing, you know, reflecting on a 0:04:47.796 --> 0:04:50.316 country like Norway, how prosperous it is, and where that 0:04:50.356 --> 0:04:52.556 prosperity comes from. Oil, which is. 0:04:52.796 --> 0:04:55.556 Oil oil and good institutions. Right, they have a lot 0:04:55.596 --> 0:04:59.076 of oil and they have like very robust civil institutions. 0:04:59.156 --> 0:05:00.076 A rare combination. 0:05:01.156 --> 0:05:04.716 Oh yeah, it's a very blessed combination, you know. So 0:05:04.996 --> 0:05:06.956 that got me thinking about those things, you know, and 0:05:07.076 --> 0:05:09.756 living in there, not not just working, but living living 0:05:09.836 --> 0:05:15.596 in the country, being a direct beneficiary of that way 0:05:15.796 --> 0:05:19.916 of doing things. What's the beginning of that? You know? 0:05:19.956 --> 0:05:23.156 And that country's pristine, is so beautifully pristina. I said, Okay, 0:05:23.196 --> 0:05:26.996 these guys are doing something really, really right. What's behind that. 0:05:27.076 --> 0:05:30.196 So that's the beginning of that search of how much energy? 0:05:30.236 --> 0:05:33.276 How do we do it? It's not just about emissions, 0:05:33.316 --> 0:05:38.596 it's about many other things. But it took seven years 0:05:38.636 --> 0:05:44.436 to develop the deep conviction and to get my families, 0:05:45.956 --> 0:05:48.876 you know, complicity in quitting Stormagy. 0:05:48.636 --> 0:05:51.716 Because like, you had a good job, you p absume 0:05:51.756 --> 0:05:54.596 you were paid well, you could work there your whole life. 0:05:54.916 --> 0:05:58.956 Absolutely, it's I have nothing bad to say about my 0:05:59.436 --> 0:06:03.076 years there. It's nothing but good experiences, good colleagues, good problems, 0:06:03.196 --> 0:06:07.396 never boring. So it really came from a very deep 0:06:07.436 --> 0:06:11.436 conviction of trying to you know, I call it using 0:06:11.476 --> 0:06:16.476 the second part of my career to actually push in 0:06:16.556 --> 0:06:19.236 what I think needs to be the direction that the 0:06:19.276 --> 0:06:21.476 world needs to go into. And don't get me wrong, 0:06:21.476 --> 0:06:23.716 I don't think fossil fueler girt is a beer anytime soon. 0:06:23.756 --> 0:06:27.236 But we need to start pushing in a new direction. 0:06:27.396 --> 0:06:29.876 And I wasn't seeing anything able to do that. 0:06:32.116 --> 0:06:36.156 So you go and work at the venture capital fund 0:06:36.196 --> 0:06:39.636 of MIT, your alma mater, in your in your search, right, 0:06:39.676 --> 0:06:45.516 you're you're now you're on your quest. When you get there, 0:06:45.556 --> 0:06:48.116 I mean, are you sort of in your mind explicitly 0:06:48.196 --> 0:06:50.356 or implicitly be like, Okay, I'm gonna go try and 0:06:50.356 --> 0:06:52.636 find it. I'm gonna go try and find some solution 0:06:52.836 --> 0:06:54.356 to our energy problem. Is that? 0:06:54.476 --> 0:06:58.996 Is that what's happening? I think it is? It is 0:06:59.036 --> 0:07:04.316 like that. Indeed, I quitch lanu Ja without having a job. 0:07:04.396 --> 0:07:07.236 You know, on principle I said, look, I'm just I 0:07:07.276 --> 0:07:10.596 need to get out of here to reinvent myself. Is 0:07:10.636 --> 0:07:13.556 too comfortable to stay in that job. Yeah, so you 0:07:13.556 --> 0:07:17.036 will always postpone it. So we came back. We were living 0:07:17.036 --> 0:07:19.636 in England as a family, my wife and three kids, 0:07:19.796 --> 0:07:25.716 and I decided that I had already decided that energy 0:07:25.716 --> 0:07:34.996 transition was a technological problem first, and if successful, if bridged, 0:07:35.596 --> 0:07:38.796 could become in a socio economical, geopolitical and all of 0:07:38.796 --> 0:07:42.156 the other things. Regulatory problem, but technological problem first, we 0:07:42.396 --> 0:07:46.436 don't have the technologies to transition away from fossil fuels. 0:07:46.636 --> 0:07:49.036 And what year ish is this? 0:07:49.516 --> 0:07:50.996 When did you say twenty seventeen? 0:07:51.196 --> 0:07:56.756 So by twenty seventeen solar powers is already getting much 0:07:56.876 --> 0:08:00.356 cheaper with the Mayan batteries are still expensive, but they're 0:08:00.356 --> 0:08:05.356 starting to get cheaper. Like people are very excited about 0:08:05.396 --> 0:08:09.556 those technologies at that time, like, what's your what's your 0:08:09.636 --> 0:08:10.556 view on them? 0:08:12.796 --> 0:08:18.716 So I think they will play a part in the solution, 0:08:18.916 --> 0:08:21.196 but I think they will play a very small part 0:08:21.436 --> 0:08:22.116 in the solution. 0:08:22.276 --> 0:08:26.036 And if you take solar and wind and nuclear, to 0:08:26.116 --> 0:08:30.796 take the three sort of classic modern classic renewables, like 0:08:31.476 --> 0:08:35.236 those seem pretty compelling plus storage as a package. To me, 0:08:35.716 --> 0:08:38.756 you're clearly less compelled by those as a package. 0:08:38.796 --> 0:08:42.676 Why so it has to do with the premiums we 0:08:42.956 --> 0:08:49.596 incur in transitioning a unit of fossil energy to a 0:08:49.716 --> 0:08:52.756 unit of clean energy from either one of those sources. 0:08:53.116 --> 0:08:55.516 So when you say premium, do you mean cost? By 0:08:55.676 --> 0:08:57.996 different definitions of the word cost, What does premium mean 0:08:58.036 --> 0:08:58.836 when you use it that way? 0:08:58.956 --> 0:09:04.956 Yeah, I define premium as multiple things. So land use 0:09:05.156 --> 0:09:09.836 per unit of energy, that's one mineral U per unit 0:09:09.836 --> 0:09:16.716 of energy, that's two and man hours labor use per 0:09:16.796 --> 0:09:20.436 unit of energy. And I frame it like that simply 0:09:20.476 --> 0:09:24.116 because these are the resources we have available to us. 0:09:24.156 --> 0:09:28.956 You know, think about it. We have time, space, and stuff. Basically, actually, 0:09:29.116 --> 0:09:34.356 I say four things. There's time, there's place, there's natural resources, 0:09:34.436 --> 0:09:38.676 and there's nohow that's it. Those are the resources everything 0:09:38.716 --> 0:09:39.996 else derives from that. 0:09:40.956 --> 0:09:43.716 It's like land, labor, capital, and ideas. Right, it's like 0:09:43.876 --> 0:09:45.436 kind of econ one oh one ish. 0:09:46.196 --> 0:09:51.436 That's right. That's right. So you cannot pretend that you 0:09:51.516 --> 0:09:54.676 can replace twenty five trillion juice per second, which is 0:09:54.676 --> 0:09:59.596 what it takes to power humanity, if in doing so 0:09:59.756 --> 0:10:02.556 you're incurring a one hundred x to one thousand x 0:10:02.636 --> 0:10:06.796 on any of those things. You know, a unit of 0:10:06.956 --> 0:10:12.676 fossil energy takes a certain amount of space, land, a 0:10:12.716 --> 0:10:14.876 certain amount of minerals, a certain amount of labor to 0:10:14.916 --> 0:10:17.436 pull together, to bring together, and if you try to 0:10:17.436 --> 0:10:20.716 do it with solar, that multiplies by about one hundred in. 0:10:20.716 --> 0:10:22.516 Terms of the space in particular. 0:10:22.596 --> 0:10:26.476 Yes, it takes one hundred times more land, it takes 0:10:26.516 --> 0:10:29.036 one hundred times to a thousand times more minerals, depending 0:10:29.036 --> 0:10:30.996 on a mineral, and it takes one hundred to a 0:10:31.036 --> 0:10:33.716 thousand times more man hours. 0:10:34.476 --> 0:10:38.836 To install and versus installing and recovering fossils. 0:10:38.956 --> 0:10:42.276 All things consider and implicitly, and there is cost, But 0:10:42.396 --> 0:10:46.236 cost is deceptive because you can always make up economic 0:10:47.156 --> 0:10:51.436 models and capital cost models to actually bring those casts down. 0:10:51.516 --> 0:10:53.676 We can talk about cost in a second, but the 0:10:53.836 --> 0:10:57.756 bring it more fundamentally, that is that realization. That and 0:10:57.796 --> 0:11:00.236 the same applies for wind, and the same applies for 0:11:00.316 --> 0:11:04.996 pretty much everything that's renewable, diffuse and intermittent. We cannot 0:11:05.476 --> 0:11:10.636 move a jewel or a what of fossil energy to 0:11:10.716 --> 0:11:14.596 the clean space to the emission space, you know, bonus 0:11:14.636 --> 0:11:17.596 points for lower emissions by incurring one hundred to one 0:11:17.596 --> 0:11:20.036 thousand eggs more costs on land use, mineral use, on 0:11:20.116 --> 0:11:22.716 labor use per unit of energy. That's not scalable. The 0:11:22.756 --> 0:11:26.556 externalities will stop it on its tracks. Uh huh. 0:11:26.596 --> 0:11:28.876 Like even though it's so much cheaper to make solar 0:11:29.036 --> 0:11:32.876 panels now there sort of will be land use. Just 0:11:32.956 --> 0:11:38.196 in practical political terms, people won't let us put all 0:11:38.236 --> 0:11:41.276 the solar panels we need to generate the energy. I mean, 0:11:41.356 --> 0:11:42.556 is it that kind of problem. 0:11:42.836 --> 0:11:44.676 Yeah, we won't be able to afford the land use 0:11:44.716 --> 0:11:46.516 for that. I mean, forget about people letting it be 0:11:46.716 --> 0:11:48.476 that that's going to happen, but we just won't have 0:11:48.556 --> 0:11:51.316 the land budget to do it. Because we also need 0:11:51.316 --> 0:11:55.356 to use land for other things like preserving environmental forests, 0:11:55.436 --> 0:11:59.236 right to like feeding ourselves, you know, and people always 0:11:59.236 --> 0:12:01.196 say like, oh, we can put this stuff in the Sahara. 0:12:01.396 --> 0:12:03.916 Sure you can, but it's still intermittent and the energy 0:12:03.956 --> 0:12:07.676 is they're not here. Yeah, So there's this fallacy that 0:12:07.716 --> 0:12:11.116 because you can take energy from somewhere, sometimes you can 0:12:11.196 --> 0:12:15.676 put it everywhere all the time. That is the biggest fallacy. 0:12:15.716 --> 0:12:17.796 I mean people are trying to solve that. I know 0:12:17.876 --> 0:12:21.236 that adds costs, right, but like by some come actually 0:12:21.556 --> 0:12:23.916 building building wires. 0:12:23.676 --> 0:12:25.676 That is the cost. That is the cost. So people 0:12:25.676 --> 0:12:29.836 say WIN and SOT are cheap. Lie, the collection of 0:12:29.996 --> 0:12:33.636 those resources is cheap. But building those into and the 0:12:33.676 --> 0:12:36.596 fixed costs required to bring that energy everywhere all the time, 0:12:36.916 --> 0:12:39.116 these where the true cost takes. You know, the cost 0:12:39.196 --> 0:12:41.356 is not in collecting the energy. The cost is in 0:12:41.516 --> 0:12:45.876 moving it and storing it. And it's massive, massive, massive. 0:12:46.036 --> 0:12:47.916 I mean, so if you're as an engineer think about 0:12:47.916 --> 0:12:50.116 those and you say, look, this is this is not 0:12:50.196 --> 0:12:53.676 going to get us anywhere close to where we need 0:12:53.716 --> 0:12:56.516 to be. Fine, they'll play a solution, there's markets for that. 0:12:56.796 --> 0:12:59.396 People will money, capitalism will play its role. But at 0:12:59.396 --> 0:13:02.956 some point those externalities will smack you in the face 0:13:02.996 --> 0:13:05.436 and it's happening. It's happening. You can see it already 0:13:05.436 --> 0:13:08.276 happening in some places with the penetration. So I don't 0:13:08.316 --> 0:13:12.516 believe and this is not faith. This is not believe 0:13:12.556 --> 0:13:15.156 us in faith. This is believe us in quantitative rigors 0:13:15.196 --> 0:13:19.316 engineering analysis that those things will actually get us to 0:13:19.316 --> 0:13:20.116 where we need to go. 0:13:21.036 --> 0:13:22.796 What about nuclear power. 0:13:23.236 --> 0:13:26.876 Or nuclear can totally do it? Absolutely? Nuclear does not 0:13:26.996 --> 0:13:32.556 incur those premiums. But nuclear has a different problem. From Colombia. 0:13:32.996 --> 0:13:36.556 We have oil. We barely have a refinery in the country. 0:13:36.556 --> 0:13:40.436 Why is that because of value change them because of geopolitics. 0:13:40.876 --> 0:13:45.156 So don't tell me that we will be happy to 0:13:45.436 --> 0:13:50.676 ship radioactive fuel, refine radioactive fuel, and ship back radioactive 0:13:50.716 --> 0:13:54.476 ways on a global scale. We can barely do that 0:13:54.836 --> 0:13:55.956 with oil and gas. 0:13:56.596 --> 0:14:02.676 In particular, you're saying the raw material, the uranium say 0:14:02.756 --> 0:14:06.196 that you need to make nuclear power doesn't exist in 0:14:06.236 --> 0:14:08.436 lots of places, and the notion that there will be 0:14:08.476 --> 0:14:11.596 some kind of globe supply chains shipping uranium around the 0:14:11.596 --> 0:14:14.356 world is implausible' that's the core argument you're making. 0:14:14.476 --> 0:14:16.716 Yeah, and that's just the raw material. The raw matill 0:14:16.836 --> 0:14:19.596 is a simpler problem. It's just the problem of carrying 0:14:19.596 --> 0:14:22.116 a lot of things from point to point B. I'm 0:14:22.156 --> 0:14:27.876 more concerned actually about the refined form of that shipping 0:14:28.316 --> 0:14:32.796 and rich radioactive materials fuel grade not weapon grade fuel 0:14:32.796 --> 0:14:37.156 greade radioactive material to fuel the power plant. You know, worldwide, 0:14:37.836 --> 0:14:42.276 into economies that cannot even control themselves, into very very 0:14:42.316 --> 0:14:46.196 trouble geopolitical systems that cannot even govern themselves. This is 0:14:46.236 --> 0:14:49.436 not going to happen at scale. I think nuclear is 0:14:49.476 --> 0:14:53.036 a solution for the G twenty, but not much beyond 0:14:53.116 --> 0:14:55.916 that because of the geopolitics, not because of the technological 0:14:56.756 --> 0:14:58.556 arguments I made about win and solar. 0:14:58.636 --> 0:15:02.316 The G twenty, the twenty basically richest countries in. 0:15:02.236 --> 0:15:04.516 The world essentially, that's right. That is correct. 0:15:05.676 --> 0:15:10.076 Okay, so you've you've set You've set the table. This 0:15:10.236 --> 0:15:12.796 is what you're thinking about When you leave Schlumberge and 0:15:12.836 --> 0:15:15.796 you're going out looking for the solution that nobody has found. 0:15:15.796 --> 0:15:20.916 You go to mi T good place to look what 0:15:21.036 --> 0:15:22.076 happens when you get there. 0:15:23.636 --> 0:15:28.156 So I got there because I heard about a new 0:15:28.276 --> 0:15:34.996 venture fund being launched by MIT timing. Just I didn't 0:15:35.036 --> 0:15:38.196 plan it that way, It just happened that way. Som 0:15:38.356 --> 0:15:40.716 T was telling the world, Look, the big problems of 0:15:40.756 --> 0:15:47.196 the world are not being solved because capitalism is distracted 0:15:47.236 --> 0:15:49.836 with the near term and little opportunities. So they created 0:15:49.836 --> 0:15:54.556 a fund, the Engine, they called it, to incentivize the 0:15:54.596 --> 0:15:59.716 transition of bold ideas from lab to a commercial life. 0:16:00.596 --> 0:16:04.836 So I went into that environment and I started pitching 0:16:04.876 --> 0:16:06.676 the engine. You know, you know, I let me be 0:16:06.756 --> 0:16:09.876 part of these I want to I want to work 0:16:09.916 --> 0:16:12.916 here because I want to learn venture capital. And the 0:16:12.956 --> 0:16:17.396 reason I did that is because if it's a technological solution, 0:16:18.836 --> 0:16:22.476 only venture capital of that kind is going to allow 0:16:22.556 --> 0:16:27.716 it to flourish outside of the confines and politics of 0:16:28.036 --> 0:16:31.636 large corporations like SMOG. I was amiliar with that. You 0:16:31.676 --> 0:16:34.116 saw the limits, you saw the limits of what legacy 0:16:34.156 --> 0:16:37.876 companies could or would. That's right. The opportunity cost is 0:16:37.916 --> 0:16:40.996 too hire for them to encourage. Their stakeholders don't allow it. 0:16:41.036 --> 0:16:43.236 They do research and development, but not of the kind 0:16:43.356 --> 0:16:45.356 required to bring forth. 0:16:46.156 --> 0:16:48.996 They're not in that business. They're not in that business. 0:16:49.916 --> 0:16:54.116 Christians and innovator's dilemma like why would they do that? Yes, 0:16:54.436 --> 0:16:57.956 their capital cause their opportunity costs doesn't allow them to. 0:16:58.316 --> 0:17:01.996 So that was my conclusion. Venture capital might do these, 0:17:02.956 --> 0:17:06.356 especially of the kind the Engine was proposing. MIT was proposed, 0:17:06.436 --> 0:17:08.236 not any venture capital, because a lot of it is 0:17:08.356 --> 0:17:12.596 very short temper sure, So okay, So that was the 0:17:12.636 --> 0:17:14.356 journey there. I said, okay, let me be here. I 0:17:14.396 --> 0:17:16.396 want to learn venture capital, not because I want to 0:17:16.436 --> 0:17:20.796 be an investor, but because I want to see how 0:17:20.836 --> 0:17:23.316 that game is played, how you pitch an investor in 0:17:23.396 --> 0:17:26.556 venture capital, and in return, I can help you with 0:17:26.636 --> 0:17:28.356 these companies that are coming out of the labs to 0:17:28.476 --> 0:17:33.396 figure out commercialization pathways and I can do diligence. We 0:17:33.476 --> 0:17:36.276 did that for a year to the day. So that 0:17:36.476 --> 0:17:40.476 was that transition, and then one day you meet a guy. 0:17:42.676 --> 0:17:44.996 The first week there by the way, the first week there, 0:17:45.196 --> 0:17:48.396 it's funny. So I joined in July first, twenty seventeen, 0:17:49.036 --> 0:17:51.636 and I think that week, that very week or the 0:17:51.636 --> 0:17:56.916 week after, Paul Oskov walked in with Aaron Mandel saying, Hey, 0:17:57.556 --> 0:17:59.556 here's this idea. We need to pitch the engine. And 0:17:59.636 --> 0:18:02.796 I was the investor representing the investor on the other 0:18:02.996 --> 0:18:04.996 side of that conversation. 0:18:05.196 --> 0:18:08.556 The skeptic, the person saying, why should we give you money? 0:18:08.636 --> 0:18:11.036 Yes, yes, yes, speitch me. 0:18:11.196 --> 0:18:13.436 Why so who are these people? 0:18:14.276 --> 0:18:21.036 Paul is a career long research engineer at MIT, particularly 0:18:21.076 --> 0:18:23.276 the Plasma Science Fusion Center. 0:18:23.796 --> 0:18:27.716 Fusion as in everybody's favorite dream for how to get 0:18:27.796 --> 0:18:30.956 nuclear energy. If we could ever figure it out, it 0:18:30.996 --> 0:18:34.196 would be amazing. But nobody still that fusion. 0:18:34.636 --> 0:18:36.956 That fusion which is also a solution. But I can 0:18:36.956 --> 0:18:38.996 give you a few pointers why I don't think that's 0:18:39.516 --> 0:18:41.876 going to do anything in our lifetimes. But that's another conversation. 0:18:41.956 --> 0:18:46.356 So that's that's Paul was. Then Aaron Mandale is a 0:18:46.396 --> 0:18:50.916 serial entrepreneur. He likes to start companies. He's a good scout, 0:18:51.316 --> 0:18:54.676 and he was looking for solutions in the geothermal space 0:18:55.036 --> 0:19:00.116 and he had concluded that drilling deeper and harder was 0:19:00.236 --> 0:19:02.556 a really, really, really important part of the equation. 0:19:03.756 --> 0:19:07.676 So there's an entrepreneur who has the idea of drilling 0:19:07.716 --> 0:19:11.876 deeper for geothermal energy. What's he doing with a guy 0:19:11.876 --> 0:19:16.036 who studies fusion, Like, what's going on there? 0:19:16.956 --> 0:19:21.916 Paul had been since two thousand and seven, been playing 0:19:22.036 --> 0:19:25.436 with very many of the technologies that are used in fusion, 0:19:26.596 --> 0:19:30.396 but to drill, you know, he was playing with gyrotrons 0:19:30.476 --> 0:19:33.916 and wave guides and energy beams. But that's still two 0:19:33.956 --> 0:19:36.436 years before they I even met them as the investor 0:19:36.476 --> 0:19:37.436 on the other side of the table. 0:19:38.316 --> 0:19:41.556 So okay, so these guys have been working together. They 0:19:41.596 --> 0:19:46.996 walk into the room, your brand new what's their pitch? 0:19:49.076 --> 0:19:53.836 Their page is very much about drilling hotter and deeper 0:19:53.956 --> 0:19:58.436 with energy to unlog geodermal energy at a very large scale. 0:19:59.476 --> 0:20:03.556 They wanted money to form that company. They wanted money 0:20:03.596 --> 0:20:08.116 to start that journey. And I was listening on the 0:20:08.156 --> 0:20:15.716 other side and saying, Okay, this makes sense, sounds far fetched. 0:20:15.796 --> 0:20:19.596 I need to become familiar with these technologies which are 0:20:19.596 --> 0:20:21.956 not using oil and gas. And I was saying, you know, 0:20:21.956 --> 0:20:25.076 but if it works, it really changes everything. But you're 0:20:25.076 --> 0:20:27.916 not pitching me a company. You're pitching me a research project. 0:20:28.756 --> 0:20:31.596 You're pitching me a continuation of the ten years of 0:20:31.596 --> 0:20:33.876 academic work. And this is a venture capital fund. We 0:20:33.916 --> 0:20:36.356 need to see a company, and we need to see 0:20:36.356 --> 0:20:40.116 a founding team. 0:20:38.716 --> 0:20:41.996 On a really basic level. Like you're saying hotter and deeper, 0:20:42.796 --> 0:20:47.036 but like what is the very basic idea about hotter 0:20:47.116 --> 0:20:50.396 and deeper? Like what is sort of status quo geothermal energy? 0:20:50.436 --> 0:20:52.076 And then how is this idea different? 0:20:53.356 --> 0:20:59.236 Yeah, so geothermal energy is relatively shallow. It's no more 0:20:59.276 --> 0:21:02.676 than half a mile maybe a mile into the earth. 0:21:03.396 --> 0:21:06.436 And to put that into perspective, oil and gas routinely 0:21:06.516 --> 0:21:09.636 goes beyond that. They go to two miles maybe three 0:21:09.676 --> 0:21:11.556 miles down. 0:21:12.076 --> 0:21:15.876 So, in addition to the fact that geothermal energy as 0:21:15.876 --> 0:21:18.636 it exists now, not only when you're being pitched, but 0:21:18.716 --> 0:21:23.556 still today, right, it's it's not that deep, and also 0:21:23.596 --> 0:21:26.796 it's fairly limited in where people can do it right 0:21:27.116 --> 0:21:31.716 by the nature of what exists a mile or less 0:21:31.836 --> 0:21:32.516 under the earth. 0:21:32.756 --> 0:21:37.516 That is correct, it's very geographically constrained. But funny enough, 0:21:37.556 --> 0:21:41.996 if you look at those places they do amazing things 0:21:42.076 --> 0:21:45.236 with geothermal, like Iceland and Kenya, they power themselves. They're 0:21:45.276 --> 0:21:49.756 almost you know, Kenny is like fifty percent electricity from geothermal, 0:21:49.876 --> 0:21:52.796 Iceland is like thirty percent electricity, like eighty percent heat. 0:21:53.316 --> 0:21:55.916 And in those places, like at least in Iceland, the 0:21:55.916 --> 0:22:00.156 heat is coming up out of the ground itself almost right, Like. 0:22:00.796 --> 0:22:02.916 I mean, I'm sure they're clever engineers and doing lots 0:22:02.916 --> 0:22:06.276 of work, but when the heat is literally like bubbling 0:22:06.276 --> 0:22:09.036 out of the ground, it seems a lot easier to cap. 0:22:09.156 --> 0:22:13.116 It's a lot easier, it's technologically possible, and it's economically feasible. 0:22:13.276 --> 0:22:17.236 So that's why they exist there. Yeah, So that's the 0:22:17.236 --> 0:22:18.876 status school of geothermal today. 0:22:19.596 --> 0:22:21.996 And what happens if you go deeper just on a 0:22:21.996 --> 0:22:23.756 basic geological. 0:22:23.156 --> 0:22:27.476 Level, so it's very simple. You just access that same 0:22:27.516 --> 0:22:30.036 heat no matter where you are in the world. If 0:22:30.076 --> 0:22:34.036 you go deeper, you can move away from Iceland and 0:22:34.076 --> 0:22:36.996 you can access the same energy source, which happens to 0:22:37.076 --> 0:22:40.116 be everywhere but at different depths. 0:22:41.036 --> 0:22:43.396 So everywhere is Iceland if you go deep enough. 0:22:44.196 --> 0:22:48.876 Everywhere is Iceland if you from a geothermal point of view, 0:22:48.876 --> 0:22:52.116 if you go deep enough, indeed, uh huh. 0:22:52.156 --> 0:22:55.396 And so I mean in the world now, I mean 0:22:55.476 --> 0:22:58.876 Iceland is kind of the classic, and Kenya is pretty 0:22:58.876 --> 0:23:03.516 well known overall. What's the Where is geothermal with current 0:23:03.556 --> 0:23:06.196 technology economically feasible? 0:23:07.276 --> 0:23:11.036 It's very small because of the geographical limitation. To give 0:23:11.036 --> 0:23:14.156 you a sense, not even point five percent of energy 0:23:14.676 --> 0:23:18.876 zero point five one half of one percent of global 0:23:18.956 --> 0:23:24.036 energy comes from geothermal. And that's because it's geographically constrained. 0:23:24.636 --> 0:23:27.356 Huh. Basically in most places you have to go too 0:23:27.356 --> 0:23:30.956 far down to get to the to get to the 0:23:30.996 --> 0:23:31.836 kind of heat you need. 0:23:32.436 --> 0:23:35.196 That is correct. That is correct. So that's why it's constrained. 0:23:35.196 --> 0:23:37.916 Why can't you just keep drilling, like, why can't you 0:23:38.036 --> 0:23:39.916 just do what they're doing in places where they do 0:23:39.956 --> 0:23:41.836 it and just go farther down. 0:23:43.316 --> 0:23:47.076 You can, and people have. It's just very expensive. The 0:23:47.196 --> 0:23:52.556 drilling operation takes over the economics of anything. 0:23:53.116 --> 0:23:56.436 Is it nonlinear in some way? Like? Is it that 0:23:56.556 --> 0:23:59.956 very much deeper you go, the more expensive each marginal 0:24:00.036 --> 0:24:00.676 meter is? 0:24:01.756 --> 0:24:05.916 Yes, So you start at hundreds of dollars per meter, 0:24:06.756 --> 0:24:09.036 and you could very well end up in tens of 0:24:09.196 --> 0:24:12.956 thousands of dollars per meter. Why one hundred x because 0:24:12.996 --> 0:24:16.476 your drill bits where and you have to replace them, 0:24:16.516 --> 0:24:20.036 and if you're very deep down there, it takes a 0:24:20.036 --> 0:24:22.116 lot more time to replace the drill bit. 0:24:22.316 --> 0:24:24.676 To pull it up. Time you got to pull it up. 0:24:25.036 --> 0:24:27.476 Pull it out, change the drill bit, pull it back, 0:24:27.516 --> 0:24:29.956 and push it back in and then drill for that 0:24:30.076 --> 0:24:35.676