Google's research Labs started a project a few years ago that it thought had the potential to slow the impact of man made climate change. It was going to make fuel from carbon dioxide harvested from seawater. This fuel would still release carbon when it was burned, just like oil and gas, but because it was made from carbon taken from the atmosphere instead of taken from underground deposits, it wouldn't end up increasing the overall level of greenhouse gases.
Our world economy is fueled by awfel fuel still, and they have a lot of amazing properties that are hard to replicate, and so we could make renewable fuels, we would the advance substantially as you know, world civilization. That's Kathie Hannon who led the project, which Google called fog Horn, and the Foghorn team actually did succeed in making fuel from seawater, but Google pulled the plug on the project
anyway in early because it was just too expensive. It just didn't look like we would be able to hit a price point on a timeline that would justify the very large investments that would be required to bring that technology to market. Scientists have known for decades that it's theoretically possible to suck carbon from air or water and turn it into all kinds of products. To date, a big problem with carbon removal efforts is that they've been too expensive to justify doing on a large scale on
any practical basis. Three years after fog Horn ended, other researchers think they're coming even closer to cracking the code. One of them is a tiny company named Prometheus. It's not using the exact same technology that Google used for Foghorn, but it does see itself picking up where Google left off. The company even counts the person who was the technical lead on Foghorn as an advisor. But for any of this to matter, these new companies are going to have
to act quickly. Here's Julio Friedman, an expert on carbon management at Columbia University. If you're getting into this business because you want to help on climate, here on the clock, we need to keep in emissions very very quickly. If it takes those seventy years to displace the incumbent we loose like that, that's not good. A growing number of experts now believe that carbon capture technology is a necessary
part of any plan to confront climate change. The problem is moving it out of the laboratory and up to the kind of scale that could make a difference at a planetary level, and doing it fast enough to avoid the potentially disastrous effects of climate change. It's a daunting prospect, but there's never been more support from private investors and policymakers. Maybe this is the rare case where the biggest business opportunity is also a chance to save the world. I'm
Pia Gadkari and I'm Joshua Brewsting. You're listening to Decrypted. If you want to know what's hot in the tech startup world, there may not be a better place to look than why Combinator Demo Day. Twice a year, several dozen hand picks startups give two minute pitches to a room full of investors, media types, and industry insiders. It's a big deal. Y SEE as a tech investment firm that's famous for its role launching companies like Airbnb, drop Box,
and Reddit. Every founder that takes the stage oozes with optimism that they're about to hit it big. No one else, Because no one else, no one else. It's InCred ten. But in recent years y C has also begun testing out its own sweeping social projects. It said it was going to begin experimenting with the concept of paying people a universal basic income. That year, it also said it was going to build a city from the ground up.
Y C side projects serve as a barometer of the big questions that Silicon Valley is fixated on at any one moment in time, and this year, why C said it was specifically seeking pictures from startups working to remove carbon from the atmosphere. It was overwhelmed with responses. Sixties startups applied to the program. It accepted just two of them, and one of those was Prometheus. The company was started
by a guy named Rob McGinnis. A demo day, Rob took the stage and told the audience that he had built a machine that could make gasoline from thin air, and that it could do it at a profit. This was an idea with the potential to be the undepenning of a huge business and a real force in the fight against climate change. It was also pretty audacious coming
from such a small company. After demo day, I visited Rob in his coworking space about two hours south of San Francisco, formed a company, and I started building our first proaches. Would you say, we it's really just to do at this point. Yeah, but I had health. So it's like people have been working as if they're going to have jobs and now they are. Rob's machine is a six ft tall box, three ft on each side.
It's the size of a real big refrigerator. So you know, I had this open and have you looked at it since it came back from San Francisco, haven't? Really, this is the first unveiling. Everything's still here in the racks. That's good, Okay, Um, well that's go through and make sure nothing lose. I mean, is this your only one at the moment? Yeah, this is so we were really nervous loading and unloading it, you know, but it was important to have it there for people to be able
to see what we're talking talking about. So these are power supplies. Um. So we opens it up and I can see that there's a cooling unit on the top and a little screen that shows a video feed from what's going on inside the machine. That's just bubbles coming out of water, and there's some piping and some wires, and then at the bottom there's a little spicket where the gas can come out. Rob asked me not to
take pictures. We don't want people to see kind of exactly are piping and instruantation design because, um, you know, eventually people will compete doing things that may be similar, and we don't want to give anybody any you know, shortcuts. The clever thing about Rob's machine is that it ends up at exactly the same place that traditional gas companies
end up. It just starts somewhere different. Traditionally, the process of making gas starts with drilling something out of the ground, You refine it, you put it in your car, and you burn it. This releases carbon into the atmosphere, and that's the problem. The more fossil fuels we burn, the more the carbon builds up in our atmosphere, and that's ultimately contributing to climate change. But if you can use the carbon that's already in the air to make your gasoline,
your carbon footprint can theoretically be zero. You just create a circular process that recycles the same carbon over and over, and that's what Robs trying to do. What's cool about this is it's reverse combustion, right, So when you burn fuel, you make water, carbon oxide, and energy in some sort of work. Hopefully um and those three things can be combined back into um into gasoline, but the byproducts oxygen. So this thing is like a little mechanical forest, just
like trees. Rob's machine would remove carbon dioxide from the air. Of course, there are some caveats. The process requires a significant amount of energy. If that energy doesn't come from renewable sources like wind or solar energy, you'll just end up burning carbon to make your carbon neutral fuel, and that defeats the whole purpose. It can also be really expensive. I contacted Matt Eisman, who was the technical lead on Foghorn for Google. He's advising Robin. I was interested in
what he had to say about Prometheus. Matt said people regularly approach him with ideas for carbon removal companies, seeking his endorsement or his advice. Prometheus stood out to Matt because of advances Rob had made in material sciences. These would allow him to turn carbon into fuel in liquid stage. Before then, people have been heating it up and doing this in gaseous form. This would mean that Prometheus can conduct his process at a lower temperature that requires less power,
and that makes everything cheaper. Rob's machines can also be small enough to be portable, so he could physically move them around based on where the power is cheapest at
any time. In the weeks after Demo Day, Rob said he was able to raise all the money he was off to and that he'd use it to hire a few employees and move the project onto the next phase, but he didn't want to say how much he had raised or from whom Prometheus is entering a growing carbon capture industry, there's a number of stages that companies are focused on. There are the companies that want to perfect the process of sucking the carbon out of the air
that's known as direct air carbon capture. Climb Works, Global Thermostat, and Carbon Engineering have all been working on that project for years. Then there are companies like Opus twelve who want to use the technology to make not only fuel, but other industrial chemicals like carbon monoxide. And then there's another set of businesses that want to use repurposed carbon
to build alternatives to concrete and other construction materials. Meanwhile, Rob wants to go off to another huge market, which is the gasoline market, and he believes that it will be possible for him to start producing gasoline at profitable rates within a year. He's told us about three dollars a gallon at first. Of course, for now he's just
asking us to take his word for it. We've been building, um, both this prototype system and also the economic model that we're basing our assumptions on during that And have you actually produced any gasoline during that period? No? No, we just finished the machine on Friday. But um, there's no question it will make fuel because everything in it has already been used to do what it's done before, So there's no there's no like, no new part in this system.
It's really just things that have been done but done before independently. What most climate scientists agree on is that the planet needs more carbon capture. Last fall, the u n s Into Governmental Panel on Climate Change said carbon removal would be a necessary part of the response to the problem. Estimates of how much carbon we need to be removing from the atmosphere every year are in the
range of ten giga tons. That's ten billion tons of carbon, or about a quarter of the current annual level of global CEO two emissions. That means companies like robs have to start having some real successes and real soon. But not everyone in albed in. Carbon removal is necessarily building new machines. Say that absolutely, thanks for having me. The same week I met Rob, I also met with Diego
sized Gill, the founder of Pachama. That's the other carbon removal company that got into y S. Diego didn't have a machine to show me. His company makes software that's meant to improve carbon offset markets. These are transactions in which someone, usually a business that releases a lot of carbon into the atmosphere, would pay someone else to remove or prevent the release of a similar amount of carbon.
So the software Diego is writing might one day allow people to pay Prometheus, for example, for the greenhouse gases that it eliminates. Remember how Rob had described his machine as a kind of mechanical forest. The carbon removal technology that most interest Diego are actual forests. You know, we need energy breakthroughs too, We need to reduce emissions and transition to a low carbon uh energy matrix. All those
efforts need to be explored. Um. You know, we're just starting with with what we think is the easiest and cheapest. The more plan, Madris, You know, Diego told me he spent his whole career in technology up to this point, doing things that he looks back and fields are kind
of inconsequential. So much of the tech industry has been focused on making life convenient around the edges, helping us our tackos from our phones or whatever, and Diego thinks that this is his chance to do something bigger than that. But he also knows that if a real carbon economy emerges, there's gonna be a lot of money to be made as a middleman. I strongly believe that it is an
amazing economic opportunity as well. Right, it might be the economic opportunity of the twenty one century to fix climate change. Of course, a lot has to happen for those economics to pan out. Most businesses won't start paying for the carbon they're a missing until there's a law saying they have to. Diego's business really depends on governments taking action in order to work. This runs counter to a lot of what you've heard from the tech industry in recent years.
It says that government regulation is often an impediment innovation, not its spark, and betting on politicians is always risky. But that's not even the only big question hanging over this industry. There's something a little strange about just letting the biggest climate offenders buy their way out of the problem. And with all of these carbon capture technologies. On one hand, it's good because we can keep doing things the way we always have without adding to the emissions that are
already in the atmosphere. But critics would say, ultimately we have to develop technologies that don't create emissions at all. Right, So this is the view that carbon removal technologies are a fantasy that allow us to count on some easy way out to emerge so that we don't have to make the tough decisions that we'd have to make otherwise. It's definitely been a part of the discussion around them.
I asked Julio Freedman about this. He's the Columbia professor we heard from at the top of the episode who has studied carbon management for nearly two decades, and these arguments about moral hazards really don't hold water with him. He says, it's unclear what kind of technologies are going to work, and so we should really be trying everything. The more technologies we try, the greater the chances we
have of finding something that works. Because so many of these ideas are doomed to fail, often for reasons we don't quite understand yet, and history has proven repeatedly that finding something that's better than fossil fuel is going to be really, really hard. So there are many companies that have broken their spears on. There are many companies that were like, we're going to make something that's going to
compete with gasolies and their debts, you know, Josh. One of the things that has kind of intrigued me most is the fact that despite this incredibly urgent need for the technology, the market is still in such early phases. Yeah. I think when you start looking at any new project, it's a discovery and you think, wow, people are just starting down this road and it's exciting. But one of the first things I found out was that the main direct air carbon capturing companies have been around for years.
They're just still very early. And I think that's a reminder of how difficult the technological problems are here. I mean, Google gave up. There is a real question about can you do this in a way that makes any economic sense, And even if you do that, then the scale up has to be so rapid and so big. That is a really daunting problem. In and of itself, and that's
a technological and a sort of economic problem. I think one interesting example of kind of where we are with this industry right now is one of the other applications that companies have focused on, and that's selling bubbles to beverage makers. They need to buy carbon, and so direct carbon capture companies have been trying to strike deals with these bottling companies to say, hey, we'll sell your bubbles.
We can do it at close to a reasonable price right now for this application, and then they can start learning about how maybe they get to some of these broader applications. And that's one of the things that's notable about Rob's company is that he's actually going off to a much bigger, more established market, which is the gasoline market. Yeah. Absolutely, Rob is a very convincing proponent of this idea. Obviously
you have to be. He says, Look, if I can make gasoline that's the same as the gasoline that goes into your car, then there's already pipes to move that gasoline. I don't know if to convince people to buy that gasoline. Because there's a commodity market, I can just sell into it and will be there as fast as I can grow. At the same time, his main competition is going to be the big oil companies, and that that's pretty daunting competition. Yeah. Absolutely.
I asked him about that as well. Obviously he said he hopes to work with them at some point. When I brought this up with Julio, he said that he thought these startups, a logical endpoint for them would be to figure out the technology and then be acquired by the large gas companies or oil companies, because you're going to need such a massive amount of infrastructure investment to get these things going, and they just have so many resources at their disposal that they might be willing to
do it. And Rob actually had a number for how much he thought it would cost to build out his sort of direct air carbon capture gas for the United States market, and that was eight hundred billion dollars. Okay, so let's imagine that you know, whether by acquisition by an oil company or through tech investment, Rob's company Prometheus is able to kind of succeed and scale up. Do you foresee at that point unintended consequences down the road?
There must be, I mean, it always happens if something gets to global scale, there's gonna be negative consequences that you haven't out of beforehand. I think some of them are kind of obvious already. If you started having fuel made this way at such a large scale, that will require a massive amount of energy. In some ways, it's just converting solar and wind energy into gasoline, if you think about it, and that's going to distort those markets,
or at least impact those markets. Another thing that might happen is just the amount of land that some of this would require has been something that's been brought up. If you need to build wind farms, you know, from horizon to horizon, it's going to be a problem. And then also with anything that gets to the scale, the big problems are you know, yet to be determined. And that's it for this week's episode of Decrypted. Thanks for listening.
If you're involved with carbon capture technologies, I'd love to hear from you. You can write to us at Decrypted at Bloomberg dot net or I'm on Twitter at Joshua Broosting and I'm at pa Gatkari. And please help us spread the word about our show by leaving us a race thing or a review wherever you like to listen to podcasts. This episode was produced by Pierre Gadkari and Lindsay Cratterwell. Our story editor was Anne Vandermay. Thank you also to Akio, Emily Busso, and Brad Stone. Francesco Levi
is a head of Bloomberg Podcasts. We'll see you next week.