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Using Oil-Industry Tech to Create Clean Energy · What's Your Problem?

• 0:15
  Speaker 1: Pushkin. In the first years of this century, there was
• 0:22
  Speaker 1: a wave of technological innovation in the way people get
• 0:26
  Speaker 1: oil and gas out of the ground. It was popularly
• 0:29
  Speaker 1: referred to as fracking, but in fact fracking had been
• 0:32
  Speaker 1: around for a long time. What was going on was
• 0:35
  Speaker 1: a combination of techniques that people in the industry called
• 0:39
  Speaker 1: the shale revolution. This boom brought down the price of
• 0:43
  Speaker 1: natural gas, and it turned the United States into the
• 0:46
  Speaker 1: world's biggest producer of oil and gas. It also arguably
• 0:51
  Speaker 1: extended human being's ability to live in a fossil fuel
• 0:56
  Speaker 1: powered world, slowed the transition to carbon free energy, and
• 1:00
  Speaker 1: so made climate change worse. But what if you could
• 1:06
  Speaker 1: take the technological innovations of the shale revolution and use
• 1:11
  Speaker 1: them to generate a different kind of energy, energy that's
• 1:14
  Speaker 1: carbon free energy, that helps get the world off of
• 1:18
  Speaker 1: fossil fuels. I'm Jacob Goldstein and this is What's Your Problem,
• 1:27
  Speaker 1: the show where I talk to people who are trying
• 1:29
  Speaker 1: to make technological progress. My guest today is Tim Latimer.
• 1:33
  Speaker 1: He's the co founder and CEO of Fervo Energy. Tim's
• 1:37
  Speaker 1: problem is this, how do you use innovations from the
• 1:40
  Speaker 1: oil and gas industry to generate carbon free energy. Tim
• 1:46
  Speaker 1: told me he started his career deep in the heart
• 1:49
  Speaker 1: of the shale revolution.
• 1:52
  Speaker 2: I grew up in Texas and then I went to
• 1:54
  Speaker 2: college at the University of Tulsa, both places where you know,
• 1:59
  Speaker 2: sort of the oil and gas industries in the blood
• 2:01
  Speaker 2: of the people here. And I happened to graduate at
• 2:06
  Speaker 2: the very advent of the US oil and gas shale boom.
• 2:12
  Speaker 2: And I think probably almost everybody I knew went into
• 2:16
  Speaker 2: the oil and gas industry out of my college class
• 2:18
  Speaker 2: as kind of a consequence of it being a boom
• 2:20
  Speaker 2: time in Oklahoma. And so I took a job back
• 2:23
  Speaker 2: in what was my original hometown of Houston, started my
• 2:26
  Speaker 2: career as a drilling engineer, and in that role, I
• 2:30
  Speaker 2: mostly worked out on the rigs themselves as a site supervisor.
• 2:33
  Speaker 2: So I've spent the majority of my time with the
• 2:35
  Speaker 2: oil field, either in South Texas or West Texas, supervising
• 2:39
  Speaker 2: field crews.
• 2:40
  Speaker 1: So what was the turn? Why aren't you still doing that?
• 2:44
  Speaker 2: You know, it's interesting even when I joined the industry,
• 2:47
  Speaker 2: already had some questions about, you know, what is the
• 2:50
  Speaker 2: future in this industry in a world where we all
• 2:53
  Speaker 2: know that climate change is a much more serious energet
• 2:55
  Speaker 2: problem than we had previously understood. And so what I
• 2:59
  Speaker 2: found is that the more time I spent in the industry,
• 3:02
  Speaker 2: the more passionate I was about climate change, and the
• 3:05
  Speaker 2: less I was seeing the industry adapt around me the
• 3:09
  Speaker 2: way I thought was necessary to face the urgent crisis
• 3:12
  Speaker 2: of climate.
• 3:12
  Speaker 1: So what's the move? What do you do? Well?
• 3:15
  Speaker 2: I was looking at clean energy, and I thought what
• 3:20
  Speaker 2: can I do? And so when I looked at solar
• 3:23
  Speaker 2: or wind or automotive, I thought, you know, in electric vehicles.
• 3:26
  Speaker 2: I thought, these are all important things, but what do
• 3:29
  Speaker 2: I have to add there? And so I was always
• 3:32
  Speaker 2: kind of looking for my move. And then actually an
• 3:34
  Speaker 2: early project I worked on when I was a drilling
• 3:37
  Speaker 2: engineer in South Texas. The wells we were drilling are
• 3:40
  Speaker 2: actually a little bit higher temperature than normal oil and
• 3:43
  Speaker 2: gas wells, and so one of my first jobs was, hey,
• 3:46
  Speaker 2: research how we can make high temperature drilling work. And
• 3:51
  Speaker 2: all of the literature I found on researching high temperature
• 3:54
  Speaker 2: drilling came from this field called geothermal, and this was
• 3:57
  Speaker 2: about a decade ago, and to be honest, I'd never
• 4:00
  Speaker 2: heard of geothermal before at that point in time, and
• 4:03
  Speaker 2: I read more about it, and it was like, Oh,
• 4:05
  Speaker 2: you drill wells, but you just produce steam and you
• 4:08
  Speaker 2: make carbon free electricity from it. And that's where I
• 4:11
  Speaker 2: became incredibly excited about the opportunity. I was like, wait,
• 4:14
  Speaker 2: I can do what I already know how to do,
• 4:16
  Speaker 2: but for a carbon free and sustainable energy resource, and
• 4:20
  Speaker 2: that to me just seemed too good of an opportunity
• 4:22
  Speaker 2: to pass up.
• 4:22
  Speaker 1: Yeah. I mean, one of the most interesting things to
• 4:25
  Speaker 1: me about what you're trying to do at a certain
• 4:28
  Speaker 1: level is you're trying to take this innovation that came
• 4:34
  Speaker 1: out of the fossil fuel industry, probably the most important
• 4:37
  Speaker 1: innovation of the twenty first century in the fossil fuel
• 4:39
  Speaker 1: industry right and use it to get energy without fossil fuels,
• 4:43
  Speaker 1: to move us away from fossil fuels. Is there something
• 4:45
  Speaker 1: really elegant about that?
• 4:48
  Speaker 2: There is, and that was something that always appealed to
• 4:50
  Speaker 2: me in the job of oil and gas. I mean, honestly,
• 4:52
  Speaker 2: if it wasn't for climate change and sustainability challenges, I
• 4:56
  Speaker 2: would have never left that career because it's a very
• 4:58
  Speaker 2: exciting thing. You're working with really bright people and solving
• 5:01
  Speaker 2: major technical challenges and one of the things that was
• 5:03
  Speaker 2: exciting for me is a decade ago, the advent of
• 5:07
  Speaker 2: things like horizontal drilling was still so new that the
• 5:10
  Speaker 2: innovations were coming out fast and furious. You know, when
• 5:13
  Speaker 2: you work in the field, I was working a two
• 5:15
  Speaker 2: week on, two week off rotation. You know, you go
• 5:17
  Speaker 2: live on the rig for.
• 5:18
  Speaker 1: Two out you live on an oil rig, yeah.
• 5:20
  Speaker 2: Yep, and then you have two weeks off. And the
• 5:21
  Speaker 2: number of times I came back from my two weeks
• 5:23
  Speaker 2: off and there was a new piece of equipment out there,
• 5:26
  Speaker 2: or a new function or a new software program that
• 5:28
  Speaker 2: had been developed in our time off was just shocking.
• 5:32
  Speaker 2: It was just so invigorating to work in a place
• 5:33
  Speaker 2: where the technology advancement was happening so rapidly. And so
• 5:38
  Speaker 2: that's one of the things that clicked for me whenever
• 5:40
  Speaker 2: I looked at geothermal is geothermal is an industry that
• 5:44
  Speaker 2: historically has been much smaller than oil and gas, and
• 5:47
  Speaker 2: they just don't drill as much many wells as oil
• 5:49
  Speaker 2: and gas. And for a variety of reasons. Right when
• 5:52
  Speaker 2: the shale boom and fracking was taking off for oil
• 5:55
  Speaker 2: and gas in America fifteen years ago, it became a
• 5:58
  Speaker 2: really tough market for geothermal. So right when the drilling
• 6:02
  Speaker 2: technology breakthroughs were coming fast and furious, no one was
• 6:05
  Speaker 2: actually drilling geothermal wells anymore because of economic challenges. So
• 6:10
  Speaker 2: I think as a result, there wasn't this technology transfer,
• 6:13
  Speaker 2: this natural dissemination of information from oil and gas drilling
• 6:17
  Speaker 2: to geothermal drilling. And I started looking at things like
• 6:20
  Speaker 2: the cost assumptions that went into what people thought it
• 6:24
  Speaker 2: would cost to drill geothermal well and I realized that
• 6:27
  Speaker 2: they were somewhat frozen in time from before the advent
• 6:33
  Speaker 2: of the shale boom, and as a result, it was
• 6:36
  Speaker 2: using performance targets that were a decade too old, and
• 6:40
  Speaker 2: with as fast as the innovation was happening in our sector,
• 6:43
  Speaker 2: a decade too old and it was ten times too conservative.
• 6:46
  Speaker 1: Huh. It would be like if you were trying to
• 6:48
  Speaker 1: build something with AI right now and we're sort of
• 6:51
  Speaker 1: using assumptions about AI five years ago or something exactly.
• 6:55
  Speaker 2: To give you an example of that, you know, when
• 6:57
  Speaker 2: you think about the year Tesla was founded in two
• 6:59
  Speaker 2: thousand and three, nobody, not the big automotive companies, not
• 7:02
  Speaker 2: the Department of Energy, No one assumed that electric vehicles
• 7:06
  Speaker 2: were going to actually be a meaningful part of the
• 7:08
  Speaker 2: energy mix. And the big reason was that they thought
• 7:10
  Speaker 2: the battery storage was going to be too expensive. And
• 7:13
  Speaker 2: you know what, if we had to start an industry
• 7:15
  Speaker 2: from scratch where the only use case for batteries was
• 7:20
  Speaker 2: electric vehicles, it would have never come down the cost curve.
• 7:23
  Speaker 2: But what happened in the nineties. We came out with
• 7:25
  Speaker 2: cell phones and laptops, and all of a sudden, lithium
• 7:28
  Speaker 2: ion batteries got incredibly cheap and incredibly high quality because
• 7:32
  Speaker 2: there was a huge manufacturing production system that grew up
• 7:36
  Speaker 2: around providing a nice battery for your laptop and phone.
• 7:39
  Speaker 2: And so the innovation Tesla had was, OK, everybody was
• 7:43
  Speaker 2: using decade old assumptions on battery technology, but there's been
• 7:48
  Speaker 2: a boom in battery technology driven by consumer electronics. What
• 7:51
  Speaker 2: if we just tape them all together and put them
• 7:53
  Speaker 2: in a car. And so it's amazing how often you
• 7:56
  Speaker 2: see innovations where you know, if geothermal had to completely
• 8:00
  Speaker 2: reinvent the way that wells were drilled to be successful,
• 8:03
  Speaker 2: it'd be really tough to do. But whenever we can
• 8:05
  Speaker 2: look at an industry like oil and gas that drills
• 8:08
  Speaker 2: one hundred times as many way else the geothermal industry does,
• 8:11
  Speaker 2: and then cherry pick the innovations from that to advance
• 8:13
  Speaker 2: our cost curve forward. It can be have dramatic results.
• 8:18
  Speaker 1: So let's talk a little bit about geothermal energy. I mean,
• 8:24
  Speaker 1: what it is is kind of right there in the name,
• 8:26
  Speaker 1: but let's start there. Anyways, what's geothermal energy?
• 8:29
  Speaker 2: Yeah, the name, you know, basically means earth and hot,
• 8:32
  Speaker 2: and that's sort of the basic premise of what we're
• 8:35
  Speaker 2: going for. You know, the world is very big, and
• 8:38
  Speaker 2: the world is very hot, and the deeper you go,
• 8:40
  Speaker 2: the hotter it gets, and so you know, the energy
• 8:44
  Speaker 2: content in the heat of the Earth is so large
• 8:47
  Speaker 2: that it's essentially inexhaustible. And so geothermal really has been
• 8:51
  Speaker 2: around for millennia. You know, you can go and visit
• 8:54
  Speaker 2: these you know, Roman baths all over Europe or elsewhere
• 8:58
  Speaker 2: that were built on thermal hot springs, and if you
• 9:00
  Speaker 2: think about it, that's geothermal energy at work. You're swimming
• 9:03
  Speaker 2: in a nice heated pool because the hot water is
• 9:06
  Speaker 2: flowing up from the heat of the Earth. And then
• 9:08
  Speaker 2: around one hundred years ago in Italy, actually in Tuscany,
• 9:12
  Speaker 2: the very first geothermal power project worked where some a
• 9:15
  Speaker 2: brilliant team came up with the idea that, you know,
• 9:18
  Speaker 2: if there's steam coming out of the ground because it's
• 9:20
  Speaker 2: really hot here, what if we use that to power
• 9:22
  Speaker 2: a turbine and make electricity. So the first ever electricity
• 9:26
  Speaker 2: from geothermal came from tapping into some of these natural
• 9:29
  Speaker 2: steam vents over one hundred years ago. And that's sort
• 9:32
  Speaker 2: of the idea of geothermal as it's advanced. You know,
• 9:35
  Speaker 2: you know, the number of spots where steam literally comes
• 9:37
  Speaker 2: out of the ground on its own is a little
• 9:39
  Speaker 2: bit limited. So people began using the idea of drilling
• 9:43
  Speaker 2: and so starting back in New Zealand and the northern
• 9:46
  Speaker 2: California in like the nineteen fifties and sixties, people started
• 9:49
  Speaker 2: drilling wells in areas where they knew the geology was hotter,
• 9:53
  Speaker 2: which replaces that are basically so hot that steam is practically,
• 9:57
  Speaker 2: you know, bursting to come out of the ground, and
• 9:58
  Speaker 2: then you drill into those areas. And that was really
• 10:01
  Speaker 2: what the industry took off on, and you know, began
• 10:05
  Speaker 2: sixty years ago with that kind of geothermal development, and
• 10:07
  Speaker 2: it's progressed now to be and twenty five countries all
• 10:10
  Speaker 2: over the world there's twenty five countries more that have
• 10:13
  Speaker 2: geothermal projects and development. As a total percentage of the
• 10:18
  Speaker 2: energy mix, it's less than one percent of the world
• 10:20
  Speaker 2: energy mix, so it's still not huge, but it's really
• 10:24
  Speaker 2: meaningful in certain markets.
• 10:26
  Speaker 1: Like there just aren't that many places where everything lines
• 10:30
  Speaker 1: up so that with this sort of twentieth century technology
• 10:33
  Speaker 1: you can get energy from the heat of the earth
• 10:36
  Speaker 1: in an efficient and useful way. Right, it's quite limited
• 10:39
  Speaker 1: in the end.
• 10:39
  Speaker 2: Exactly exactly what we found with geothermal is that as
• 10:44
  Speaker 2: we tapped those really low hanging fruit resources and stuff
• 10:48
  Speaker 2: that was shallow and hot and highly productive. As we
• 10:51
  Speaker 2: tapped that and we tried to move to deeper resources
• 10:54
  Speaker 2: that maybe wouldn't flow as much or not be as hot,
• 10:56
  Speaker 2: the technology wasn't there to be able to still produce
• 10:59
  Speaker 2: that power and to do so economically, because drilling is
• 11:02
  Speaker 2: costs are very dependent by how deep you have to go.
• 11:05
  Speaker 2: And as we started tapping the shallow geothermal resources and
• 11:09
  Speaker 2: having to move on to the deep ones, the technology
• 11:11
  Speaker 2: couldn't keep up, and those deeper resources became uneconomics. So
• 11:15
  Speaker 2: the industry, at least in the United States kind of
• 11:17
  Speaker 2: stalled out. In the nineties, once these natural hotspots had
• 11:21
  Speaker 2: been tapped and really really had been a bit of
• 11:24
  Speaker 2: a period of stagnation ever since then.
• 11:27
  Speaker 1: And I understand that by the time you wanted to
• 11:29
  Speaker 1: start a company, you know, to make geothermal energy, harvest
• 11:33
  Speaker 1: geothermal energy, it was sort of out of fashion, right,
• 11:37
  Speaker 1: People had kind of given up.
• 11:39
  Speaker 2: It was very much out of fashion. And so early
• 11:41
  Speaker 2: on I was looking for funding. And I remember going
• 11:43
  Speaker 2: to an investor conference, an energy investor conference, and I
• 11:47
  Speaker 2: walked up to somebody that I knew was a big
• 11:49
  Speaker 2: investor in the space, and I introduced myself to him,
• 11:53
  Speaker 2: and this would have been about twenty seventeen, and I said, Hey,
• 11:55
  Speaker 2: I'm Tim. I'm working on Fervo Energy. It's a startup
• 11:58
  Speaker 2: I co founded that does geothermal energy. And he holds
• 12:01
  Speaker 2: his hand up and says, I'm going to stop you
• 12:03
  Speaker 2: right there and save us both some time. I'm not
• 12:06
  Speaker 2: interested in geothermal energy. Thanks for the converse, and walked away.
• 12:12
  Speaker 2: And that was a lot of the sentiment around what,
• 12:14
  Speaker 2: you know, what what was the future for geothermal is is?
• 12:17
  Speaker 2: That was sort of the reaction that we got on
• 12:19
  Speaker 2: energy conferences. It was a bit of a bit of
• 12:21
  Speaker 2: a punchline.
• 12:22
  Speaker 1: Because people had tried it and it seemed like it
• 12:24
  Speaker 1: didn't work exactly. So how do you how do you
• 12:30
  Speaker 1: how do you get going in that environment? How do
• 12:33
  Speaker 1: you get from the guy putting his hand in your
• 12:34
  Speaker 1: face to actually building a company?
• 12:36
  Speaker 2: I realized that there was such a gap between how
• 12:39
  Speaker 2: quickly the technology for drilling had advanced an oil on
• 12:42
  Speaker 2: gas and what the geothermal industry was used to that
• 12:44
  Speaker 2: people just didn't know what the performance was really like.
• 12:47
  Speaker 2: And I remember having some very bizarre conversations where people
• 12:50
  Speaker 2: would tell me things like you can't drill horizontally, and
• 12:53
  Speaker 2: I'm like, I just got off a rig, you know,
• 12:56
  Speaker 2: a few weeks ago where that's what I was doing,
• 12:59
  Speaker 2: and we were doing it for the thousandth time, like,
• 13:01
  Speaker 2: and it was just amazing the gap and understanding of
• 13:03
  Speaker 2: technology there, and so I knew we were onto something.
• 13:07
  Speaker 1: Do you think part of that is like the culture gap?
• 13:10
  Speaker 1: I mean that even if the technical skills are kind
• 13:13
  Speaker 1: of overlapping, the culture gap between people who were fracking
• 13:17
  Speaker 1: on an oil rig in West Texas or whatever and
• 13:19
  Speaker 1: the people who are trying to geothermal start up in
• 13:21
  Speaker 1: Northern California, they're just not talking to each other, because
• 13:24
  Speaker 1: why would they No.
• 13:26
  Speaker 2: I think that's I think that I think there's a
• 13:28
  Speaker 2: lot of that. You know, one piece of advice I
• 13:30
  Speaker 2: got from a mentor early on who'd invested in a
• 13:34
  Speaker 2: bunch of different sectors is that if you want to
• 13:36
  Speaker 2: be the leader in a sector, you need to be
• 13:38
  Speaker 2: at the geographic center of where that sector works. You know,
• 13:41
  Speaker 2: if you're starting an AI company, you're probably going to
• 13:44
  Speaker 2: be really well served to be in the Bay Area.
• 13:46
  Speaker 2: If you're starting a medical device or pharmaceutical company, you're
• 13:49
  Speaker 2: going to be well served to be in Boston. If
• 13:51
  Speaker 2: you're starting a drilling company, you should probably be in Houston.
• 13:55
  Speaker 2: And one of the things that I found is when
• 13:57
  Speaker 2: we started Fervo, there was zero geothermal companies in Houston.
• 14:01
  Speaker 2: They were all in places all over the world, but
• 14:04
  Speaker 2: in America they were not. None of them were close
• 14:06
  Speaker 2: to Houston.
• 14:07
  Speaker 1: And Houston is like the intellection rual center of this
• 14:11
  Speaker 1: shale fracking drilling revolution. Right, there's this incredible innovation coming
• 14:15
  Speaker 1: out of there. It is like the Bay Area for
• 14:17
  Speaker 1: AI or something exactly right.
• 14:19
  Speaker 2: All the big companies, all the big suppliers, some of
• 14:22
  Speaker 2: the best research institutions, whether you're talking about in Houston,
• 14:26
  Speaker 2: like the University of Houston or Rice, or in the
• 14:29
  Speaker 2: area like the University of Texas or Texas A and
• 14:31
  Speaker 2: M all kind of centered around this intellectual hub of
• 14:34
  Speaker 2: subsurface that is in Houston. And there was no geothermal
• 14:39
  Speaker 2: here and no geothermal presence here. And I think it
• 14:42
  Speaker 2: is Yeah, you could say it's cultural, but it's also
• 14:44
  Speaker 2: just geographical. There weren't the same number of water cooler
• 14:47
  Speaker 2: conversations or people bump into each other and in the
• 14:50
  Speaker 2: hallway in these other areas where that knowledge share can happen.
• 14:54
  Speaker 2: And so that was actually something being somebody from Houston
• 14:58
  Speaker 2: and I actually part of my journey. We did move
• 14:59
  Speaker 2: out to the Bay Area to start the company, and
• 15:02
  Speaker 2: that's where we founded the company, but always with a
• 15:05
  Speaker 2: lens of making Houston the headquarters because we wanted to
• 15:08
  Speaker 2: be in and the center of that intellectual hub.
• 15:12
  Speaker 1: Well why start the company in the Bay Area?
• 15:13
  Speaker 2: Then, briefly, it's gets to an interesting question speaking about geography.
• 15:18
  Speaker 2: I mean the Bay areas where startups happen, you know,
• 15:21
  Speaker 2: And it sort of is interesting even to this day.
• 15:24
  Speaker 2: And Houston has an actually incredible and vibrant and growing
• 15:27
  Speaker 2: innovation ecosystem.
• 15:29
  Speaker 1: You need, like the hybrid DNA you need, the startup
• 15:31
  Speaker 1: DNA in the Bay Area, and the fracking DNA of Houston.
• 15:35
  Speaker 1: Basically you do.
• 15:36
  Speaker 2: That's part of the magic. And the amount of capital
• 15:40
  Speaker 2: available for people with wild ideas that could change the
• 15:43
  Speaker 2: world is still so concentrated in the Bay Area.
• 15:47
  Speaker 1: That's the It's like when they ask the guy, why
• 15:49
  Speaker 1: do you rob banks, and he said, that's where the
• 15:50
  Speaker 1: money is. That's why the Bay Area. That is exactly right,
• 15:54
  Speaker 1: and that said, right now, where are you talking to
• 15:57
  Speaker 1: me from?
• 15:58
  Speaker 2: I'm in Houston, Texas net right now in twenty twenty
• 16:01
  Speaker 2: and our third year of existence as a company. We
• 16:04
  Speaker 2: still have an office in the Bay Area and a
• 16:05
  Speaker 2: lot of great people that work there. But we made
• 16:08
  Speaker 2: the decision that now it's time to scale up. Now
• 16:10
  Speaker 2: it's time to start drilling these wells. Now is the
• 16:12
  Speaker 2: time where it's most important that we're located here in Houston,
• 16:15
  Speaker 2: and so I relocated back here and our corporate headquarters
• 16:19
  Speaker 2: are here in Houston.
• 16:22
  Speaker 1: In a minute, Tim and his company build a real
• 16:25
  Speaker 1: geothermal power corner. So where are you now? I mean,
• 16:38
  Speaker 1: you have this thesis several years ago, which is basically
• 16:42
  Speaker 1: if we bring the technology from the shale boom, if
• 16:45
  Speaker 1: you're fracking technology to bear on geothermal, we can make
• 16:48
  Speaker 1: it work.
• 16:49
  Speaker 2: Where are you now, Yeah, we're making it work. That's
• 16:53
  Speaker 2: where we are now. So in twenty twenty two, we
• 16:57
  Speaker 2: drilled three wells at a site in northern Nevada as
• 16:59
  Speaker 2: part of a development agreement with Google Google pay It
• 17:02
  Speaker 2: played a major catalytic role in this. Google is one
• 17:05
  Speaker 2: of the first people to bring up an awareness of
• 17:07
  Speaker 2: something that is a recognition in the market that's benefitted
• 17:11
  Speaker 2: Fervo a lot, which is that solar and wind are
• 17:14
  Speaker 2: going to be the workhorses of a decarbonized electric cred
• 17:18
  Speaker 2: but cannot do the job all on their own, and
• 17:20
  Speaker 2: we need a complementary resource like geothermal that can work
• 17:23
  Speaker 2: twenty four to seven to complement wind and solar so
• 17:25
  Speaker 2: we can get all the way to decarbonized electric cred.
• 17:29
  Speaker 2: And I think the exciting thing for us as a
• 17:30
  Speaker 2: company is we began that project in twenty twenty two.
• 17:34
  Speaker 2: We published results from a very successful test phase of
• 17:37
  Speaker 2: that project a just over the summer, and after the
• 17:42
  Speaker 2: results of that test phase, we move forward with commissioning
• 17:45
  Speaker 2: that project and that product is now producing electricity. We've
• 17:48
  Speaker 2: now just finished and brought onto the Electric cred our
• 17:51
  Speaker 2: very first ever electricity producing project using advanced geothermal technology.
• 17:55
  Speaker 1: Great, so you have this project in Nevada that just
• 18:01
  Speaker 1: turned on, just started producing real electricity for real people
• 18:06
  Speaker 1: in the last few months. Right, Yes, how does it work? Like,
• 18:10
  Speaker 1: just tell me what's going on there? How's it work?
• 18:13
  Speaker 2: Yeah? So the way our kind of geothermal works. And
• 18:17
  Speaker 2: again I told you earlier that we had the tech
• 18:21
  Speaker 2: fifty years ago to do these perfect shallow hot productive resources,
• 18:25
  Speaker 2: but it's always been a struggle to make the other deeper,
• 18:28
  Speaker 2: less productive resources work.
• 18:29
  Speaker 1: Most of the world, the vast majority.
• 18:31
  Speaker 2: Of the most of the world, every place that's not Iceland, basically.
• 18:36
  Speaker 2: And so what we do differently is we drill our
• 18:39
  Speaker 2: wells deeper, for one. And then when we drill these
• 18:42
  Speaker 2: wells deeper, not only do we drill them down vertically,
• 18:44
  Speaker 2: but we then drill them horizontally as well. So to
• 18:46
  Speaker 2: give you some depths to think about the project that
• 18:50
  Speaker 2: we did in Nevada, we drilled that well eight thousand
• 18:53
  Speaker 2: feet straight down and then four thousand feet horizontally.
• 18:56
  Speaker 1: Wow, so like a mile and a half down and
• 19:00
  Speaker 1: almost a mile over, So like an L. I should
• 19:04
  Speaker 1: be thinking of a capital L.
• 19:06
  Speaker 2: Yes, a giant capital L. And then we but a
• 19:09
  Speaker 2: second giant capital L right next to it in parallel.
• 19:12
  Speaker 2: So a few hundred feet away is another well that's
• 19:15
  Speaker 2: as deep in parallel.
• 19:16
  Speaker 1: Two l's running parallel giant under the.
• 19:19
  Speaker 2: Two big pipes in the ground. Exactly how big the
• 19:23
  Speaker 2: pipes themselves are seven inches across.
• 19:26
  Speaker 1: Not big long, but narrow long.
• 19:29
  Speaker 2: But narrow that I think about them like really big
• 19:31
  Speaker 2: pipes that we've stuck into the ground.
• 19:33
  Speaker 1: Yeah, okay, and it's just rock all the way through there.
• 19:38
  Speaker 1: You're just going down and over in the rock.
• 19:41
  Speaker 2: It's rock all the way through there. And importantly for us,
• 19:44
  Speaker 2: it's hot rock.
• 19:46
  Speaker 1: Okay, yes, hot, right, that's the key, both geo and thermal.
• 19:49
  Speaker 1: Then what happens?
• 19:51
  Speaker 2: Okay, so let me tell you how this works. Now,
• 19:53
  Speaker 2: we just have the pipes in place, and the pipes
• 19:55
  Speaker 2: go through the rock. And what we end up doing
• 19:58
  Speaker 2: to create the geothermal electricity, you know, because those rocks
• 20:00
  Speaker 2: are hot, but the he just won't move on its own.
• 20:03
  Speaker 2: What we do is we actually pump cold water down
• 20:05
  Speaker 2: the injection well, and then that injection well has about
• 20:07
  Speaker 2: one hundred different ports in that water can flow out
• 20:10
  Speaker 2: and it flows across the rock over to the production well.
• 20:14
  Speaker 1: They're like holes in the side of the pipe basically yep, yeah,
• 20:18
  Speaker 1: and the water goes out of the pipe. Now in
• 20:19
  Speaker 1: my mind, it's just rock down there. Yeah, So like
• 20:22
  Speaker 1: what happens? What, like what's going on there? Yeah?
• 20:26
  Speaker 2: Water can always flow through rock. I mean, this is
• 20:28
  Speaker 2: the same way that oil is produced or water wells work.
• 20:31
  Speaker 2: Water can always flow through rock. In our case is
• 20:33
  Speaker 2: we have actually created these fractures that go from one
• 20:37
  Speaker 2: well to the other. So think about these giant cracks
• 20:40
  Speaker 2: in the rock that now that water flows through. So
• 20:43
  Speaker 2: it connects the injection well to the production well and
• 20:46
  Speaker 2: its own isolated system. So it goes out the ports,
• 20:50
  Speaker 2: flows through the rock hundreds of feet and in that
• 20:54
  Speaker 2: hundreds of feet it heats up and the wells. We're
• 20:56
  Speaker 2: doing it around four hundred degrees fahrenheit, So by the
• 20:59
  Speaker 2: time that cold water reaches the other well, it's already
• 21:02
  Speaker 2: heated up to about four hundred degrees fahrenheit. Even though
• 21:04
  Speaker 2: it's four hundred degrees fahrenheit, we actually produce it still
• 21:07
  Speaker 2: in a water in a liquid phase.
• 21:08
  Speaker 1: Wo, So it's highly pressure as water that can be
• 21:11
  Speaker 1: four hundred degrees and not yet.
• 21:12
  Speaker 2: Steam exactly, and so then it gets to the surface
• 21:16
  Speaker 2: it's hot water. And then what we do is we
• 21:19
  Speaker 2: actually can pump that water over to the electric the
• 21:23
  Speaker 2: power plant that we have at this site, and then
• 21:26
  Speaker 2: we take the water and we run it through a
• 21:28
  Speaker 2: heat exchanger, so that heat then goes into the power cycle,
• 21:32
  Speaker 2: and then we collect the cold water after it's giving
• 21:35
  Speaker 2: up all of its heat again and pump it right
• 21:37
  Speaker 2: back down the injection well. So all we're doing is
• 21:39
  Speaker 2: circulate in the same water over and over and over again.
• 21:42
  Speaker 2: In the system. It goes down cold, heats up in
• 21:46
  Speaker 2: the rock, comes up hot. We then gather that heat
• 21:50
  Speaker 2: at the surface to create electricity, and then we pump
• 21:53
  Speaker 2: the cold water back again, and we do that for
• 21:54
  Speaker 2: decades and decades and decades. And the key here is
• 21:57
  Speaker 2: we're getting this heat not by burning something, not by
• 22:00
  Speaker 2: burning natural gas or coal, but by the natural heat
• 22:02
  Speaker 2: of the earth itself. And so it's a zero emission technology.
• 22:05
  Speaker 1: Great, and you have a sort of small version working
• 22:09
  Speaker 1: now right.
• 22:10
  Speaker 2: It's on the order of around two to three megawatts
• 22:13
  Speaker 2: of production, and so it's not big when it comes
• 22:16
  Speaker 2: to power infrastructure. But that's still enough electricity to power
• 22:20
  Speaker 2: several thousand homes worth of electricity generation. But it really
• 22:24
  Speaker 2: is just the beginning of what we are planning to
• 22:27
  Speaker 2: do as we scale this technology.
• 22:31
  Speaker 1: So if that's the beginning, what's the middle This summer?
• 22:35
  Speaker 2: Actually, after we had these really successful results from our
• 22:38
  Speaker 2: first ever pilot, we move forward to a site in
• 22:42
  Speaker 2: southwest Utah and we broke the ground on our next project,
• 22:46
  Speaker 2: which is going to be roughly one hundred times bigger
• 22:49
  Speaker 2: than our first project.
• 22:50
  Speaker 1: So how do you increase the power output by one
• 22:53
  Speaker 1: hundred x? What do you got to do to do that?
• 22:56
  Speaker 2: We drill more wells. Well one thing. The wells that
• 22:58
  Speaker 2: we're going to drill now are going to be bigger,
• 23:02
  Speaker 2: for one, and so we're going to get actually more
• 23:04
  Speaker 2: power output for every well that we drill, and then
• 23:06
  Speaker 2: we're going to drill more of them. And I tell
• 23:09
  Speaker 2: you one thing that's exciting about this in terms of
• 23:11
  Speaker 2: again a sustainability standpoint, one of the really attractive things
• 23:15
  Speaker 2: about geothermal power is the actual land you need to
• 23:18
  Speaker 2: do it is very minimal compared to almost any other
• 23:20
  Speaker 2: type of energy resource.
• 23:22
  Speaker 1: It's a low footprint on the ground, but a big
• 23:24
  Speaker 1: footprint under the ground exactly.
• 23:26
  Speaker 2: So it's a very you know, you can be at
• 23:28
  Speaker 2: a very small pad that's only a few acres, but
• 23:31
  Speaker 2: then underneath you are can be dozens of wells that extend,
• 23:35
  Speaker 2: you know, across miles and miles.
• 23:38
  Speaker 1: What are you worried about in that next project?
• 23:41
  Speaker 2: What are we worried about? You know, it's interesting, I'd
• 23:45
  Speaker 2: say the first thing is policy support. You know, geothermal,
• 23:50
  Speaker 2: as you noted when you were asking me how it
• 23:51
  Speaker 2: works earlier, nobody knows about it. Nobody knows how it works.
• 23:54
  Speaker 2: Before I read some random paper ten years ago, I
• 23:57
  Speaker 2: didn't know about it. And as a result, it's sort
• 24:00
  Speaker 2: of this forgotten renewable and we end up in a
• 24:02
  Speaker 2: situation where again and again it gets left out of
• 24:05
  Speaker 2: the same incentive schemes and government grants and supportive policy
• 24:09
  Speaker 2: that almost any other energy resource you have. We're structuring
• 24:13
  Speaker 2: to compete with technologies that get significantly more government funding
• 24:17
  Speaker 2: and policy support.
• 24:18
  Speaker 1: Tell me about price, Like this project you're working on
• 24:22
  Speaker 1: in Utah, Like what's it going to cost to get
• 24:24
  Speaker 1: electricity out of that project? And how does that compare
• 24:28
  Speaker 1: to other sources? Of electricity.
• 24:30
  Speaker 2: Yeah, so we'll end up investing well over a billion
• 24:34
  Speaker 2: dollars in this project in southwest Utah. But it's a
• 24:37
  Speaker 2: very sizable project. It's four hundred megawatts from a price standpoint.
• 24:43
  Speaker 2: It's really interesting to think about the electric grid because
• 24:46
  Speaker 2: everyone always thinks about the electric grid. Is electricity, it's
• 24:50
  Speaker 2: a commodity. Well it sort of isn't It isn't. The
• 24:53
  Speaker 2: thing about electricity is that when people want electricity, they
• 24:57
  Speaker 2: want it now, right, and so the reliability is incredibly
• 25:01
  Speaker 2: important for electricity. So it's one thing to produce electricity,
• 25:05
  Speaker 2: it's an entirely different thing to produce electricity when it's needed.
• 25:09
  Speaker 2: So whenever you look at how utilities construct portfolios, they
• 25:14
  Speaker 2: find that you know, of course you want solar, and
• 25:17
  Speaker 2: of course you want wind, and of course you want
• 25:18
  Speaker 2: batteries because those are very low cost resources. But you
• 25:21
  Speaker 2: also need stuff that works when those resources don't, and
• 25:25
  Speaker 2: historically in this country that has been coal or natural gas. Increasingly,
• 25:29
  Speaker 2: less coal and more natural gas. But if you want
• 25:32
  Speaker 2: to do it both keep the lights on and do
• 25:34
  Speaker 2: it in a sustainable and carbon free way, we need
• 25:36
  Speaker 2: to find a substitute for that natural gas part of
• 25:39
  Speaker 2: the portfolio as well. And so all this to say,
• 25:41
  Speaker 2: whenever you look at a portfolio approach, geo thermal offers
• 25:44
  Speaker 2: things that other energy resources don't. It's always there when
• 25:47
  Speaker 2: you need it, and it doesn't produce carbon emissions.
• 25:51
  Speaker 1: Yeah, so I feel like you're telling me it's more expensive,
• 25:54
  Speaker 1: but you can use it when it's dark out and
• 25:57
  Speaker 1: the wind isn't blowing. Is that what you're saying.
• 25:58
  Speaker 2: Yeah, I would say that's right. And what you find
• 26:01
  Speaker 2: is that a little bit of what we sell. You know,
• 26:03
  Speaker 2: if you are trying to figure out for your business,
• 26:07
  Speaker 2: or for your city, or for your utility, you know
• 26:09
  Speaker 2: what's the least cost way to provide electricity. It turns
• 26:12
  Speaker 2: out buying twenty percent of your electricity from US, even
• 26:15
  Speaker 2: at a premium price, ends up allowing you to have
• 26:18
  Speaker 2: a much lower overall cost because it provides these really
• 26:22
  Speaker 2: high valuable attributes to the grid.
• 26:24
  Speaker 1: And you don't have to have like a gas peaker
• 26:25
  Speaker 1: plant that you build and only use a few hours
• 26:29
  Speaker 1: a year or whatever.
• 26:31
  Speaker 2: Exactly exactly what else.
• 26:33
  Speaker 1: You worried about. You're about to build a billion dollar plant.
• 26:36
  Speaker 1: Surely your worries cannot solely be outward facing.
• 26:40
  Speaker 2: So we always joke about the fact that we really
• 26:42
  Speaker 2: smashed two types of companies together. We're and so we
• 26:45
  Speaker 2: hire a lot of people from renewable energy developers, and
• 26:48
  Speaker 2: we hire a lot of people from oil on gas,
• 26:50
  Speaker 2: and we smash us together in one big company to
• 26:53
  Speaker 2: execute these goals.
• 26:54
  Speaker 1: It's like the hippies and the roughnecks basically, that's right.
• 26:57
  Speaker 2: Yeah, that's what that's Yeah, you could you could say
• 26:59
  Speaker 2: that maybe that'll be our next like holiday party theme.
• 27:02
  Speaker 1: Or something like that. I like it.
• 27:03
  Speaker 2: I like it, the hippies and the roughnecks, and we
• 27:05
  Speaker 2: try to make it work. But the reason I say
• 27:07
  Speaker 2: this is, yeah, we're about to we're in the process
• 27:09
  Speaker 2: of doing a billion dollar plus project. But the nice
• 27:13
  Speaker 2: thing is that everybody that we've hired to work on
• 27:15
  Speaker 2: our team has done projects of that size and scale before.
• 27:18
  Speaker 1: When you're going to turn on this big plant in Utah.
• 27:20
  Speaker 2: Twenty twenty six is the first time we'll be making
• 27:23
  Speaker 2: electricity from this facility. So it's going to come online
• 27:26
  Speaker 2: in a few phases. That full four hundred megawatts will
• 27:28
  Speaker 2: be done by twenty twenty eight. We'll be producing our
• 27:33
  Speaker 2: first electricity there. Really in just a couple of years.
• 27:36
  Speaker 2: Looking at the date now, I guess it's almost twenty
• 27:39
  Speaker 2: twenty four already, which I find hard to believe. So
• 27:42
  Speaker 2: just around the corner, twenty twenty six, we'll be making
• 27:44
  Speaker 2: first electricity from our facility in Utah.
• 27:48
  Speaker 1: We'll be back in a minute with the lightning round.
• 28:01
  Speaker 1: I want to finish with the lightning round.
• 28:03
  Speaker 2: Okay.
• 28:04
  Speaker 1: What's the best thing about working on an oil rig.
• 28:08
  Speaker 2: There's no substitute to actually physically seeing your progress when
• 28:13
  Speaker 2: you work. You know, I grew up in the countryside
• 28:15
  Speaker 2: and we would farm, and I worked on a rig
• 28:18
  Speaker 2: and we do things, and I can tell you it's
• 28:20
  Speaker 2: a little funny sometimes to do work and just have
• 28:23
  Speaker 2: like a PowerPoint presentation and email at the end of
• 28:25
  Speaker 2: the day to show it, and you know there's things
• 28:26
  Speaker 2: going on out there, but you can't see it. To
• 28:29
  Speaker 2: be able to start your shift and say, you know,
• 28:30
  Speaker 2: when I started, we were seven thousand feet deep, and
• 28:33
  Speaker 2: when I got off shift, we were eight thousand feet deep,
• 28:35
  Speaker 2: and I can see the difference that we've made is
• 28:38
  Speaker 2: something that like, you know, that's that's a really nice
• 28:41
  Speaker 2: tangible thing about the work that I always appreciated.
• 28:45
  Speaker 1: What's the worst thing about working on an oil rig.
• 28:47
  Speaker 2: It's hard to be away from home. You know. You
• 28:50
  Speaker 2: spend weeks out there sometimes without without coming home, and
• 28:54
  Speaker 2: you end up building a great community of people that
• 28:57
  Speaker 2: you work with, your co workers. But you know, there's
• 29:00
  Speaker 2: no substitute for seeing your friends and family and sleeping
• 29:02
  Speaker 2: in your whole, in your own bed.
• 29:05
  Speaker 1: When I typed Fervo into my phone, I was just
• 29:08
  Speaker 1: like making some notes when I was preparing for this interview.
• 29:11
  Speaker 1: It auto corrected it to Gerbo. You have an idea,
• 29:15
  Speaker 1: what's going on with that? What is Gerbo?
• 29:17
  Speaker 2: I don't know about Gerbo. I can tell you Fervo.
• 29:19
  Speaker 2: We picked the name because it's a It's a word
• 29:22
  Speaker 2: that means energetic and boiling, which is kind of what's
• 29:26
  Speaker 2: our what our business is in what language? All of
• 29:29
  Speaker 2: them really any Romance language.
• 29:31
  Speaker 1: So it's like fervent. Does the word fervent come.
• 29:33
  Speaker 2: From the same exactly, fervent. We're in the business and
• 29:36
  Speaker 2: making steam, so our name is steam.
• 29:38
  Speaker 1: If you were not working on geothermal energy, what would
• 29:41
  Speaker 1: you be working on?
• 29:44
  Speaker 2: Good question. I am obsessive about urban design and transportation.
• 29:51
  Speaker 2: I think you start working in energy, then you start
• 29:53
  Speaker 2: working in climate and it becomes a foray to thinking, Wow,
• 29:57
  Speaker 2: what we could design our cities so much better in
• 30:00
  Speaker 2: a way that would be more sustainable and fun and
• 30:02
  Speaker 2: and uh, you know, even though I live in Houston, Texas,
• 30:05
  Speaker 2: which is famous for our driving, I bike to work
• 30:09
  Speaker 2: every day. I live right by our light rail line,
• 30:11
  Speaker 2: and I'm just obsessed with ways we can design our
• 30:15
  Speaker 2: cities better. And if I wasn't doing for oh, I'd
• 30:17
  Speaker 2: probably be doing that.
• 30:19
  Speaker 1: Okay, last one, what's one thing you understand about geology
• 30:24
  Speaker 1: about the Earth that most people don't? Oh?
• 30:29
  Speaker 2: Ah, can I half answer your question?
• 30:32
  Speaker 1: Oh? Yeah, anything you want.
• 30:35
  Speaker 2: So here's a question. Here's the thing about geology not
• 30:37
  Speaker 2: on the Earth that I've become obsessed with. Fascinating project
• 30:43
  Speaker 2: that NASA ran a couple of years ago where they
• 30:47
  Speaker 2: actually drilled into Mars and installed a seismometer in Mars,
• 30:52
  Speaker 2: and as a result, we know way more about Mars
• 30:55
  Speaker 2: geology than we did a couple of years ago, and
• 30:58
  Speaker 2: they detected regular and frequent Mars quakes there, which were
• 31:01
  Speaker 2: totally unexpected. And so just in the last couple of years,
• 31:05
  Speaker 2: we've completely rethought our understanding of Mars geology, and it
• 31:11
  Speaker 2: seems to be much more geologically active than we thought
• 31:15
  Speaker 2: even two or three years ago, and I don't know,
• 31:18
  Speaker 2: maybe to make a bit of a business proposition for it.
• 31:20
  Speaker 2: Geologically active means that it probably has a higher thermal
• 31:23
  Speaker 2: gradient than we've anticipated. So my team always has to
• 31:27
  Speaker 2: remind me to focus on Earth first. But it's a
• 31:29
  Speaker 2: funny thing to think about. You know, if we ever
• 31:32
  Speaker 2: make it to Mars, geothermal might be the way to
• 31:35
  Speaker 2: be the way to make our power workout there.
• 31:38
  Speaker 1: I love it. I love the fifty year vision. Well,
• 31:42
  Speaker 1: it's great to talk with you. Thank you for your time.
• 31:45
  Speaker 2: Thanks so much for having me. I appreciate the invitation.
• 31:49
  Speaker 1: Jim Latimer is the co founder and CEO of Fervo Energy.
• 31:53
  Speaker 1: Today's show was produced by Joey Fishground and Edith Russilo.
• 31:58
  Speaker 1: It was edited by Karen Chakerji and engineered by Sarah Bruguier.
• 32:03
  Speaker 1: You can email us at problem at Pushkin dot FM.
• 32:07
  Speaker 1: I'm Jacob Goldstein and we'll be back next week with
• 32:10
  Speaker 1: another episode of What's Your Problem. Mhm mm hmm.