About this episode
In this episode, we continue our discussions with Paul Martin exploring the challenges of clean hydrogen scale up, the market forces and Hopium driving current government and industry activity. We discuss distributed production of ammonia and urea and the impact of diseconomies of scale and consequences of parallelisation. We reflect on alternative feedstocks, such as lignocellulose, with a passing nod to our mutual colleague Paul Bryan, and how Wright’s Law of the cost benefits arising from increasing scale and experience may not apply as anticipated by many in the race to scale green hydrogen production.
We close out our discussions reflecting on the next journey with Spitfire Research, the joy and hazards of providing ‘unvarnished advice’, maintaining a healthy scepticism as part of the technology transfer journey and making sure the right resources flow into the right opportunities.
Transcript
CB: Welcome to Tech Transfer Talk. My name is Cameron Begley from Spiegare, and joining us again today is Paul Martin, picking up the second of our conversations around hydrogen and technology transfer. Paul, welcome back.
PM: Hi. Glad to be here.
CB: So, we’ve certainly explored scale in the discussion around we make hydrogen, what do we do with it? And scale in the verticals is going to work would be more preferred based on industrial experience and costs and things. But to come back round to that other notion that’s been doing the rounds, I guess, around the concept of distributed production, whether it’s distributed hydrogen or ammonia or subsequent derivatives, and most specifically urea, from an ag and food production system perspective. Wow, wouldn’t it be great if I could make my urea on site on demand, rather than having to be on the end of a supply chain from the Black Sea or from the Middle East or wherever your supply happened to come from? I gather from certainly the way you’ve described the scale of things that really, cost competitiveness is going to be exceptionally unlikely. So there has to be some other policy, regulatory, security of supply driver, to even start to consider making sense of that.
PM: Yeah, so I think that’s absolutely right. I think the concern – we look specifically at ammonia; ammonia has some peculiarities and actually through my little consultancy, I’m working with some green ammonia proponents that are looking at doing projects that are much smaller scale than these big suckers that dominate the world market right now. And the reasons for that are several. But the biggest one happens to be that they’re all in the United States, and the United States is paying $3 a kilogram in subsidy through the Inflation Reduction Act for $1.50 cent hydrogen. And that’s a very compelling case if you get… and these guys are smart, so they’re after it.
But the thing about ammonia that a lot of people don’t realise is that ammonia is used, it’s the basis of the whole nitrogen chemicals industry. But in agriculture, it’s used largely as either anhydrous, which is used directly on fields of certain kinds, especially in the Midwest and the Canadian prairies, for instance, they will anhydrous fields directly, or used as nitrates, or it’s used as urea, or it’s used as UAN urea, ammonium nitrate solution. And the thing about this is that, of course, these uses are seasonal so that means that there has to not only be a distribution infrastructure to get the ammonia that’s being produced 24/7, 365 on the Gulf Coast, where natural gas is cheap to the farmers in Iowa, Nebraska, and Saskatchewan, and the like. But there also has to be a storage infrastructure for all this stuff, and the distributors have to store it. And actually, a good chunk of the retail cost, if you will, the commercial cost to farmers of these fertilisers is for the storage and the distribution. If you can cut out that middleman, the economics might be exciting, but it’s challenging because, of course, if in order to cut out the middleman, you have to reduce the scale of your production by a lot, the trouble you run into is this problem of physics that leads to – there’s a problem of physics that leads to the economy of scale. And putting it the other way around is as you get smaller, things get harder to afford. And the reason is pretty straightforward. It’s very easy to understand if you think of a pipe. Simplest thing possible, a pipe. A pipe will carry a certain amount of a commodity at a certain pressure drop, right? If it’s at a certain diameter. If you double the diameter, the amount of commodity that it can carry just quadrupled. Right. And quadrupled for nowhere near four times as much material and labor to make a pipe.
CB: To make a pipe, yeah –
PM: To buy the material, to make a pipe out of it, to weld it together, to install it, to paint it, to insulate it, all that stuff. It’s nowhere near four times. And that’s where the economy of vertical scale comes from. And it happens not just to pipes, but pipes and tanks and heat exchangers and everything. And then on top of it, you get all this. The thing that we used to run into building pilot plants was that on a pilot plant, you can spend as much money on instrumentation as you spend on major equipment – very easily, because the instruments like pressure gauges and flow meters and so on, they don’t get significantly cheaper or fewer on a plant just because of its scale. Right. So, all of that secondary cost starts to pile up on small projects and kill them. So as a consequence, your diseconomy of small scale really does you in, unless you’re making something that either can’t be transported, because by the time you get it there, it’s gone. And an example of that is ozone, for instance. So, we have to make ozone on site. You have no choice because 90 minutes later it’s gone. Exactly. Or it’s too dangerous to move. Or there’s a regulatory requirement that does not permit you to move it, like hazardous waste, as an example. So you know you can’t move PCB waste, for instance, across international borders because people are worried about getting stuck or whatever. So, this distributed manufacturing doesn’t work for fungible commodities. Where there are a kilogram of ammonia here and a kilogram of ammonia there, they’re exactly the same. They’re undifferentiated. And it doesn’t matter where in the world it comes from. Those commodities, those commodity materials that can be moved, you’re going to produce them in centralised facilities. That’s where you’re going to get your cheapest cost. And just distributing them sometimes has a cost that you can play with. But most of the time, the notions that we’re going to get around the problem of funding large projects or citing them or permitting them or the time that it takes to build them by multiply producing small units is based on a misunderstanding of engineering economics. And we used to run with this all the time. We’d have people come in sometimes a couple of times a month, and they’d say, hey, we’re the first people to ever have ever thought of this thing. And we’d heard somebody last week do the same thing. They would say, yeah, there’s all this gas in the world being flared, and we’re going to monetise it by turning it into whatever chemical –
CB: Whatever, yeah.
PM: And we’d say, yeah, your marginal capital intensity is going to be way too high. You will not make money because we did the studies for them originally when the first people walked in, we went okay. And we’d do a study and it’s like, your marginal capital intensity is going to be way too high. Even if everything works to plan right. So, they’d go away and then you’d do another study. Oh, we’ve got a better catalyst or better reactor or whatever. We’ve got some wrinkle, let’s get to change it. And you’d run the numbers and it’s like, yeah, but everything else on the plant still costs too much, so you’re still stuck. People would walk in and say, hey, we’ve got this great idea. And we’d say, ‘no, go away’.
CB: Don’t waste our time.
PM: Don’t waste our time because you’re not going to build a plant. And we make money from building plants. Where it gets particularly hairy and interesting, however, is on occasion you can find kind of a purple squirrel of a problem in the world, and if you can solve it, you can really do some good. And one example of that, is another one of these weird colors of hydrogen. So, a couple of guys walked into our facility back in 2013 or early 2014 and they said, ‘Hey, there’s all this natural gas being flared. Oh, no, that’s not what we’re talking about. What we’re talking about is that there’s all this natural gas that’s so cheap that people think that they can flare it and get away with it and it’s structurally cheaper per joule than petroleum and it’s going to be that way for quite a while. And we think this is a business opportunity’. And we went, ‘oh no, these guys are going to be on the same thing’. So, it’s like, ‘no, we looked at all that crap and it’s all junk and we rejected it and we decided on the least sexy thing you could think of. We’re going to make carbon black out of it’.
CB: That’s right. I read about that on one of your blogs there, Paul. Yeah.
PM: So, we went, oh, that’s interesting. Carbon black. Gee, that really is very deeply unsexy. I mean, it’s a commodity material. It’s made from dirty bottom of the petroleum barrel by part-
CB: Absolutely.
PM: And they said, yeah, we’re going to make it from natural gas, and we’ll produce hydrogen as a byproduct without any CO2 emissions and we’ll beat the pants off the carbon black producers. We’ll make low emission hydrogen as a byproduct. We’ll make that into ammonia. And so, they set themselves up in Nebraska, next to a power plant that had been built in anticipation of electrical demand. That didn’t happen because, I guess, people didn’t want to move to Nebraska and the – nice enough place, but they didn’t want to move there. So, the plant was producing excess power and they didn’t want to shut it down. And these guys came along, got a really good power purchase agreement. It’s clean electricity, no CO2 emissions associated with it. And they happen to be, if you draw a circle around their plant within 100 miles radius of their plant are 40% of the ammonia users in the United States, so they get rid of all of that distribution, transportation-related stuff that the guys from the Gulf Coast have to deal with. Pipelines running all the way from Louisiana to Iowa. The trouble with this thing is, although this is awesome, and they got a million dollars from US DOE to commercialise, go from their first commercial plant to one that’s much bigger, and we’re quite proud of them. We designed to build their pilot plant back in 2014 and we’re very delighted to see them succeed after putting many years and many millions of dollars into getting this to work.
CB: Yeah.
PM: The thing is, though, that if you were to decarbonise carbon black production entirely by this process, you’d only make, I don’t know, ten or 15 million tons of hydrogen. In fact, if you decarbonised all of carbon black and all of the graphite production in the world, it’s still only ten or 15 million tons. I forget what the exact number is. And if you did the 90 million tons that we were talking about needing by this process –
CB: you’d kill the black market.
PM: You’d make 270,000,000 tons of carbon products, and the entire world market for graphite and carbon black aren’t even the 10th of that. So, 90% of it would be going into reverse coal mines that you’d be paying somebody to bury on your behalf. And needless to say, it’s dumb, right?
CB: Yeah, absolutely. That notion of flooding a market was something we’ve talked about a lot in the bio-based economy conversation, where people are looking to extract their piece of pixie dust, and then, of course, they flood the market with pixie dust because the scale of things gets away from them. So that’s a familiar a familiar narrative about balancing supply and demand. Very familiar narrative.
PM: On the other side, though, a fun story. There was a company that was developing pyrolysis technology for wood, trying to go after –
CB: A few of those, a few of those around.
PM: … after fuel. And these guys got smart. And this was back in the 80s. This is in the early days of Zeton before I joined them. They said, well, why are we screwing around trying to make something that’s cheaper than bottled water? This is kind of dumb. Why don’t we make something of higher value? So, they did. They made liquid smoke for barbecue sauce, and they didn’t flood the market you know, and generated revenue. And by so doing, they actually had a nice revenue stream which they could fritter away on trying to make fuels out of wood or they could give to their shareholders.
CB: Yeah, nice.
PM: There are smart ways using niche markets to help you.
CB: Yeah, absolutely. But I think that what the diseconomies of scale tells us, Paul, is that the concept of distributed manufacture is really going to be by force of policy or supply chain security, rather than driven by economics or even convenience, for these sorts of ag inputs, given that they are fungible, tradable, transportable, commodities. There needs to be some sort of strategic or regulatory intervention to drive production at farm or even a regional town scale to actually make sense of it.
PM: Right. You do have to be a little bit careful with – let’s say that your feedstock is, as an example, you’re going to use cellulosic biomass as a feedstock. There’s only so far you can move that.
CB: That’s right, yes.
PM: Worth nothing. And so, as a consequence, sometimes processes are killed by the fact that they don’t have access to sufficient vertical scale in order to make them economic. The product is not valuable enough in order to pay for the capital intensity of the distributed collection and monetisation equipment that’s required.
CB: Very much so, Paul. And this is something that we’ve been wrestling with for a while, and this is something that Paul Bryan and I talked about a few podcasts ago, about this concept of stuff and distributed stuff, and how do we get enough stuff to the refinery or the chemical plant gate to actually get the process, the economics right. So, yeah, we’re very alert to that problem. And if you’re in regional, rural areas, the compelling natural feedstock will be that excess cellulosic material that comes off either off the land or out of some local upgrading or processing facilities, in the absence of having a whole lot of panels and wind available to actually get the process going in the first place.
PM: Correct, yeah. Paul Bryan is somebody that I have a lot of respect for. He’s very knowledgeable, experienced guy. And I’ve had many conversations with him back and forth on LinkedIn, but unfortunately, LinkedIn eventually kind of (unintelligible)… and he never went back. He said okay, forget it. This is just a crazy platform. And the world lost, in my opinion, as a result of losing Paul.
CB: Totally agree with you on that. Completely agree,
PM: Though, that I thought was really quite hilarious is in these discussions about hydrogen, Paul said, yeah, that’s exactly it. Hydrogen is the world’s greatest faith-based energy commodity.
CB: He did say that didn’t he? Yeah, indeed. Paul’s a terrific thinker. I’ve had the privilege of knowing him for about 20 years now, so he’s been a terrific guy to have to talk to about these things. So, Paul, just with regards to that notion of scaling up and you’ve obviously got a world of expertise from your time at Zeton. And you touched on this a little bit when we were talking about the diseconomies of scale and the challenges of trying to go from that small pilot plant to larger or even the concept of distributed production systems and making the economics work. I was just interested to quickly touch on the idea around electrolysers, in particular. And there’s a lot of work going into improving electrolysis and electrolyser performance. What scale up challenges are there in front for the green hydrogen journey, be it electrolysers or some other things that have struck you that are going to be challenges in this scale up?
PM: Yeah, I’ve got a bone to pick here, too. Remember, I’m not anti-hydrogen. I’d be mad to be anti-hydrogen after spending so much of my career making and using the stuff in syn gas and the like. So I really do think that green hydrogen is extremely important, and that doing electrolysis better, getting better at it, making electrolysers cheaper and more reliable, more responsive to changes in availability of electricity and all that stuff, that’s all extremely important work. And I laud people that are working on it, when they’re working on it intelligently. And that said, a lot of people are thinking about it wrong, okay? There’s an awful lot of simple-minded thinking out there. And it drives me crazy because I see these otherwise very smart people saying things like, well, wind and solar got cheaper, so electrolysers are going to get cheaper. And it’s like, yeah, okay, great. Yeah, that’s true. They will get cheaper. That’s true. But, let’s look at what an electrolysis plant is about.
There’s a stack of electrodes, a stack of electrodes and membranes and so on. And they vary in type and the nature of the materials and all that stuff. Different technologies have different advantages and disadvantages. But let’s set all that crap aside for the moment and just look at the stack. Well, the stack is a bunch of parts that need to be put together and it’s basically an area-based process, right? One of the characteristic parameters is the energy transfer, current density per unit area. And that’s extremely important to the economics of these things. Well, one can imagine automation and bigger factories and all that sort of thing reducing the cost of electrolysis stacks by a lot. And that’s good. So yes, they’re dead right about that. Electrolysis stacks are going to get cheaper. But electrolysis stacks are only part of the cost of a hydrogen plant. A hydrogen plant, like all plants, consists of that major piece of process equipment and then the balance of ..
CB: balance of plant. I see where you’re going.
PM: The outside battery limits stuff. Okay? So outside battery limits, parts of a project include everything from the electrical substation to the parking lot to the change room for the operators to whatever, right? And the balance of plant is, as my old boss Dave Beckham would say, tanks and pumps and shit. It looks complicated, but in reality, it’s just pretty straightforward. It’s tanks and pumps and heat exchangers and piping and instruments and valves and a control system and this sort of thing. And the problem is that that stuff doesn’t get cheaper the more of them we make. Okay? So, there’s this thing called Wright’s Law and calling it a law just makes me frustrated. But anyway, they call it Wright’s Law. And the idea behind Wright’s Law is that every time that we make a new thing, every time we double how many of them, we made, we learn a bit and they get cheaper. So, we make the first super expensive and then we make a second one and we learned a bit, so it’s cheaper. And then we make two more and those two are cheaper and we make four more and they’re cheaper.
CB: Yes. And then we come down a nice smooth curve. That brings us to this crazy reduction in the cost of solar and wind.
PM: Brings us to the magic place where solar and wind are. Because it was really the truth for solar and wind. Because in solar, what happened was we made bigger and bigger plants with closer and closer to optimal manufacturing conditions, to make first polysilicon, and then to make the silicon into PV modules, and then to make modules into panels and so on. So really what we did there is we scaled up the means of production, the plants that built these things, and the product called solar panels. Remember, the solar panels are not the plant here. The solar panels are the product from the plant. They’re the equivalent of a kilogram of hydrogen or a kilogram… So, they got cheaper as a result of economy of vertical scale and rights law. The learning curve, right, getting better, optimizing, reducing energy input and waste, and gang saws that cut thinner and thinner, wafers with less waste and all that stuff. It’s all waterage and it’s still going, it’s still getting cheaper.
And with wind turbines, vertical scale got bigger and bigger and bigger. And that did two beneficial things. One of them is it reduced the marginal cost of a kilowatt hour as a result of the usual things, that a bigger unit costs less per megawatt to build. But the other thing that it does is, as they get taller, they get access to better resource, to better wind, more consistent, higher speed. So, wind got cheaper for the same reasons. The trouble is that people are applying this totally inappropriately to electrolysis, where half the cost is OSBL imbalance of plant. So, half the cost of the electrolysis stack and maybe the electronics associated with putting power into that stack, is going to get cheaper and the other half isn’t. Is not because we’ve already built billions of them. So, the only way you can make that cheaper per kilogram of hydrogen is doing the projects bigger and bigger, hundreds of megawatts –
CB: Economies of scale –
PM: Tens of gigawatts on a single site, which is economies of scale.
CB: And the thing that struck me as you drew that distinction, Paul, and I just want to make sure that I’ve got it right in my head, you’ve made a distinction there that a solar panel or a wind turbine is the product. The distinction here is that an electrolyser is, in fact a manufacturing process where hydrogen is the product.
PM: Correct. The wind turbine less so than the solar panel. The solar panel itself is the product of a solar panel factory. The wind turbine is a product of a wind turbine factory, too. That’s also true. But the big thing about a wind turbine is that as you make them bigger, you get more vertical scale and vertical scale drops the marginal cost. But the thing about electrolysis is that electrolysis is – we can mass produce part of the plant that makes hydrogen by electrolysis. And that’s the stack. But the rest of it, the tanks and pumps and crap, as Dave would say, that stuff follows the usual economics. And we’ve made billions of them already. They’re not getting cheaper.
CB: Yeah, the Wright’s Law has already been applied to pumps and tanks and crap. We’re already done there ,long ago in a galaxy far, far away.
PM: Correct.
CB: All that stuff’s done, so the balance of plant stuff is not going to follow Wright’s Law. It has already followed Wight’s Law. That’s the distinction that we’re teasing out here.
PM: I have some electrolysis clients. And some of them are doing non hydrogen related things, and some of them are doing hydrogen-related things, but because they’re getting good advice from somebody that does understand engineering economics. And some of them had come to these conclusions long before they met me, so I don’t want to take credit for that. But they basically looked at it and said, I guess economy of vertical scale is what we need here. Let’s figure out how we can make electrolysis stacks as big as possible. And then there are some dummies who are working on some pretty interesting technology. It’s an exchange membrane electrolysis, which has some advantages relative to PEM and alkaline. Kind of a hybrid of advantages and disadvantages. And these guys – company in Italy or Germany, I forget exactly where, their idea is let’s mass produce giant quantities of 2.3 kilowatt electrolysers. And I called them out, I wrote an article about this stuff and said, yeah, and this is how you fail.
CB: Yeah, but what you’ve just described there, ties beautifully back to that notion of distributed production, which the economies of scale or dis economies of scale, the group you just described out of Italy or Germany, they’re playing right into the diseconomies of scale where the other clients you referred to have recognised the phenomena of let’s get bigger and stack more of these things together.
PM: Yeah.
CB: Really interesting.
PM: The guys in Italy or Germany, company’s called Enaptor, their thesis is, well, we’re going to make these things like refrigerators or laptop computers or whatever. We’re going to mass produce them in a factory and hence, they’re going to get really cheap per unit, and then we’re going to number them up by the tens of thousands on, you know, in equipment. And because they’re all identical, you know, we’ll just plumb them all together. And that’s how we’ll get low cost, low marginal cost of hydrogen. And it’s just dumb, it’s just dumb, tens of thousands of connections.
CB: Yeah, so that kind of works when you’re in the microfluidics world where you’ve got high value compounds and you’re flange. So, it works where the value of the compound or the product you touched on this earlier as well, Paul, where there’s value in the molecule, you can get away with that sort of thinking. There’s not a lot of value in a hydrogen molecule from an economic standpoint. There’s lots of value in it for an industry. Philosophically, it’s very valuable, but economically, it’s not a very high value compound.
PM: Oh, the number of times I’ve said that Cameron, it just blows my mind, the number of times I’ve had people come in and they’ve got this ridiculous flow sheet. It’s got a million pieces of it. And I say, Guys, you’re not making interferon on here. You’re not making inkjet printer ink.
CB: Yeah. You can’t take this balance of plan…
PM: … 250 pieces of major equipment on your flow sheet and make money. It’s just not going to happen.
CB: Just not going to happen.
PM: You got to think about simplifying this or maybe get into another line of business. And that’s the beauty of doing what I’m doing now at Zeton. Man, I love Zeton and I wish them very well. I think they’re still most awesome place to get a pilot plant built. But one of the frustrating things about working at Zeton is that people would on occasion foolishly ask me while I was working there, hey, what do you think of our idea? And should we be piloting this? And I’d have to say to them, look, I build pilot plants, okay? And if I build a pilot plan for you, I make money. And if I don’t build a pilot plan for you, I don’t make money. So, I’m the wrong person to ask whether or not you need a pilot plan. Of course, you need a pilot plan. Right. The analogy I would use is that if people would walk in the door and they’d say, hey, we’ve got this great idea, we are going to take a million sow’s ears and use them to disassemble them molecularly to make one silk purse. And they would come into Zeton and we’d say, okay, so what’s your funding like? Oh yeah, breakthrough Energy Ventures has given us tens of…
CB: Yeah, lovely people.
PM: Fantastic. When do we start? Right? Yeah. And now as Spitfire Research, because I don’t actually make plants and sell them and I’m not in that position of moral hazard anymore, somebody walks in and says, hey, I’m going to make a million thousand sow’s ears into a silk purse, I’ll say, look, you’re in the wrong business. You want to be in dog food. Yeah, you’ve got a million, you’ve got awful lot of dog food.
CB: Yeah, absolutely.
PM: It makes way more sense to be in the dog food business. I don’t think having moral hazard anymore, and I can offer the unvarnished advice, and of course, I do that in a brutally frank way, which some people find refreshing and useful, and some people find off-putting. And, of course, I don’t do business with the people that find it off putting.
CB: Which sort of brings us in towards the close of things here, Paul, because you’ve really captured the essence of what I really like about reading your blogs and indeed, what I’ve enjoyed about this conversation is that you now avoid the moral hazard. And I absolutely understand that now, having been independent myself for eight or so years, you can now call things as you see them. And, yes, that does cause discomfort. And it’s a bit glib saying this, but it really isn’t we don’t actually play the scientist. We rarely say to the science, listen, the work is really rubbish. It’s not about that, it’s actually about, listen, nothing wrong with the science here, but there’s no pathway forward – like the thinking here, the thinking here on a scientific basis, in a pure sense, is not the issue, it’s the application of it to solve a real-world problem that it’s not going to find its way through. And the beauty of, I think what you’ve described there, and indeed what we do is, we can actually say, listen, we’re not sure you’re going to get there. You got to think about, here’s a list of 6, 7, 10, 20 things that really need some thought, because as wonderful as the technical work is, the science and the rigour you’ve put into it, there are all these other factors that are going to not allow you to make the commercial headway you aspire to.
PM: Yeah. And sometimes people come in and you just shake your head. I mean, I have seen people come forward and say we want to make chemical C by reacting chemical A with chemical B. And I don’t know if it’s where I went to school or what or who I was mentored by when I was young in my career. But the very first thing we would do in that circumstance is go the Chemical Marketing Reporter, back when it was a paper magazine that you subscribed to. And you find out what tank car quantities of chemical A and chemical B cost and what chemical C sells for in tank car quantities.
CB: And see if A and B is less than C.
PM: Yeah, exactly. And I can’t tell you there have been occasions where people have not done that. And yeah, there is no business here and never will be because people don’t make C that way. They make it this other way because they use D and E and D and E are much cheaper than..
CB: Much cheaper.
PM: Yeah. So that’s why they have a business and why you never will have one doing it the way that you think. And there’s this wonderful article in a news magazine out of Silicon Valley called The Verge, which is well worth a read. It’s pretty easy to come across if you Google The Verge and the article is titled ‘The Inventor of Everything’. And it’s about a serial pump and dump stock scam artist who has now passed away, so we can speak ill of the dead if we wish. And he basically, since the late 1970s up until he died in the mid-teens somewhere, he had managed to take a large number of sometimes very good ideas, the kernel of a very good idea, and turn them into popcorn with hyperbole and then use the resulting hyperbolic claims to sucker investors, sometimes as illustrious as Google Ventures and BP and companies that you would think have pretty strenuous due diligence and this sort of thing. And he managed to hornswoggle all of them. And anyway, in this article there’s this wonderful presentation by a guy who I wish I knew, like I know Paul Bryan. His name is Bill Banholzer, and Banholzer is a former VP of Dow Chemical, and he teaches a course in techno economics, I think. And he has a presentation in the middle of this article, this Verge article. Bill’s presentation is in there, and Bill says, okay, all we need is a calculator, knowledge of a couple of laws of thermodynamics, and knowing conservation equations and things like that – you know, matter is conserved, energy is conserved, and Google in five minutes in a working brain, and we can disassemble some of these claims. And as an example, there’s this company, one of the inventors of everything’s companies called Cool Planet, where the idea was pyrolise agricultural biomass.
CB: Yeah, I’ve heard of them.
PM: Make fuels from it. And then do a fungal treatment on the char and use the char in agriculture that’ll increase yields, and you end up with carbon negative fuel, which honestly is not a bad idea. Now, of course, the way this guy was going about it was just ridiculous. And the claims he was making were nuts. And what Bill does is he goes through, and he says, okay, this is the guy’s claim. Let’s see if it’s within half an order of magnitude of believable. And within five minutes he says, yeah, this guy’s off his rocker. There’s no way. And yeah, Google Ventures and so on put all this money into it. And yeah, it’s remarkable to watch and very frustrating because of course, that money that went from…
CB: Don’t say it, Paul. It could have gone somewhere else, right?
PM: Yeah, it really could have. Now, of course, we built a pilot plant for these guys. So, you know, and fair enough, the people that were in charge at the time, this the guy who had set the place up, had been dispatched and sent on his way to his next venture, which he always had in his back pocket, by the way, as part of his scheme. And the people that were left behind were like, okay, well, can we turn this into something that works? Oh, let’s call up Zeton, and a friend of mine actually was working there, called us up, and we on a crash course, built them a pilot plant to try the thing out. And of course, it didn’t turn into much. But the point here is that, if we’re more mature and reasonable and realistic and we do a better job of stage gating and techno economic evaluation, and we’re more skeptical and more critical, we will have better outcomes and we’re more likely to achieve what we want in the world, decarbonisation or improving standards. The objective, there’s a million things that we need to do. We need to do them better. And the only way we’re going to do them better is if we stop believing our own rubbish quite so much and focus on solving real problems.
CB: And I think that’s a terrific thought to finish on, that healthy skepticism is a necessary part of tech transfer, but it’s a necessary part of making sure that the right sort of resources flow into the right sort of opportunities. Not only to address hydrogen, which we’ve largely focused on today, but a whole lot of these other challenges that we’re trying to wrestle our way through at the moment to keep carbon under control, and a whole lot of other challenges as well.
PM: Absolutely. It’s really important to do this stuff right, and if we do it right, we will be more efficient in time and money, and we’ll get better outcomes.
CB: Absolutely. So, with that, Paul, I want to thank you for joining us today. It has been a terrific conversation and really look forward to staying in touch with you and continuing to talk about not only green hydrogen and hopium, but some of the other areas we’ve touched on today.
PM: Absolutely. It’s been a great pleasure.
CB: Thanks a lot.