Startup Series: Quaise Energy
Today's guest is Carlos Araque, co-founder and CEO of Quaise Energy. Quaise is seeking to unlock the power of geothermal energy by drilling into deeper and hotter parts of the earth than ever, using microwave-based technology rather than traditional mechanical drill bits.
Carlos has a fascinating background; he grew up in Medellin, Colombia, during the turbulent 1980s and 1990s, matriculated to MIT, and then found himself working in oil and gas for a while before transitioning to geothermal and Quaise. In this episode, Carlos walks us through how geothermal energy is harnessed today and what has held it back from a scale perspective. He also offers a unique futurist point of view that there are only three forms of energy that have the potential to offer abundant clean energy to humanity at scale on a multi-decade or century-scale timeframe: fission, fusion, and deep geothermal. From his perspective, the energy density profiles of wind and solar relative to their land use requirements will eventually cause them to hit limitations.
If you’re curious about geothermal but need a primer on how it works, this one eases into the topic by going into the state of geothermal today, then spending some time on Quaise's tech solution and business model. We conclude by getting Carlos' take on the future of energy. Enjoy the show!
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Episode recorded on January 6, 2023.
In this episode, we cover:
[2:50] Carlos' background and serendipitous path to starting Quaise
[9:22] How Carlos became interested in geothermal and his thoughts on the three solutions for deploying clean energy at scale
[14:25] An overview of geothermal
[18:04] Different use cases and geothermal's potential
[21:37] Tthe different types of geothermal, including hydrothermal and EGS systems
[23:32] What's holding geothermal back today
[25:40] Quaise's approach
[29:55] How Quaise repurposes oil and gas capabilities to deploy their different technology
[35:28] Core assumptions the company is working towards in the lab
[38:37] Challenges associated with scaling
[40:58] The role of regulation
[45:37] Quaise's business model
[48:37] How Carlos evaluates risks associated with his business
[52:44] Geographic footprint required for other forms of renewable energy
[55:01] Where new skills are needed from a talent perspective
[57:01] What's next for Quaise and where they need help
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Jason Jacobs (00:00:01):
Hello everyone, this is Jason Jacobs.
Cody Simms (00:00:04):
And, I'm Cody Simms.
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We appreciate you tuning in, sharing this episode, and if you feel like it leaving us a review to help more people find out about us so they can figure out where they fit in addressing the problem of climate change.
Cody Simms (00:00:40):
Today's guest is Carlos Araque, Co-Founder and CEO of Quaise Energy. Quaise is seeking to unlock the power of deep geothermal energy by drilling into deeper and hotter parts of the earth than ever using a microwave based technology rather than traditional mechanical drill bits. Carlos walks us through how geothermal energy is harnessed today and what's held it back from a scale perspective.
(00:01:04):
He also offers a unique futurist point of view that there are only three forms of energy that have the potential to offer abundant, clean energy to humanity at scale on a multi-decade or century scale timeframe. Fission, fusion, and deep geothermal. From his perspective, the energy density profiles of wind and solar relative to their land use requirements will eventually cause them to hit limitations. If you're curious about geothermal, but need a primer on how it works, I tried to ease us into the topic by going into the state of geothermal today, a primer that I needed as well.
(00:01:39):
And then, we make sure to spend some time on Quaise's tech solution and business model and the whole deep geothermal phenomenon before concluding by getting Carlos's take on the future of energy. Carlos has a fascinating background. He grew up in Medellin, Columbia during the turbulent 1980s and 1990s, matriculated to MIT, and then found himself working in oil and gas for a significant time before finding his way to geothermal and Quaise. I learned an absolute ton during our conversation, and I hope you enjoy it. Carlos, welcome to the show.
Carlos Araque (00:02:10):
Thank you. Glad to be here.
Cody Simms (00:02:11):
So, Carlos, we get to talk about lasers, we get to talk about digging to the center of the earth. We get to talk about abundant, perpetual, and near perpetual energy. I feel like we're about to dive into a Marvel movie or something here.
Carlos Araque (00:02:24):
Oh, pretty close. That's an exciting story. Geothermal is a very, very exciting story. Glad to tell you about it.
Cody Simms (00:02:30):
And one that hasn't been told a whole lot. It's sort of this silent, potential, renewable energy source that, frankly, I think doesn't get as much of its story told. And so, excited today for us to dive in to just broadly setting the table about geothermal and then diving really into the Quaise solution as well and what it is that you all are hoping to achieve in the space. But, maybe to set the table, even before we set the table, let's start with your background. So, as I understand it, you grew up as a kid in Medellin, Columbia in a very interesting time, I'm sure, to say the least. Maybe recount a little bit about your childhood and kind of the path that took you from there to MIT and into, ultimately, the work that you started to do on exploring the subsurface of the earth.
Carlos Araque (00:03:19):
All right. Let's do 45 years in a minute. So, I was indeed born in Medellin, Colombia. I lived there until my 19th birthday, so I did high school. I did the army there, and indeed, was a very interesting time, the mid-nineties. Very violent, very troubled from the violence. But, as I finished high school, I got the wonderful opportunity to go to MIT. I applied just like anybody else, and I got accepted, so I had to go. I came into MIT in '97 and spent the next five years in my undergrad and my master's there in mechanical engineering. I'm an engineer at heart. It's a passion of mine to build things, to design things, and to build machines. So, I wanted to stay very close to that in my career.
(00:04:01):
I went to work for oil and gas for 15 years. I worked for a company called Schlumberger. They make technology for the oil industry. They're not an oil company. They make the technologies, and that was in line with my desire to be very close to technology. So, 15 year career with them. From 2002 to 2017, I lived in Houston, Norway, England. And, towards the end of that time, I decided to change directions. I was very motivated by the idea of the energy transition. I knew it had to happen in our lifetimes, in our careers, and I knew that I could maybe use the next half of my career to participate. So, I decided to come back to the United States, I was living in England at that moment, and learn venture capital. I figured if you're going to do something big in energy, it's going to be new technology, and if you're going to finance new technology not in a corporation, it's going to be through venture capital. So, let's learn that.
(00:04:56):
And, that was the beginning of that journey that we're going to talk about today. So, I spent a year at The Engine, which is a venture fund from MIT, and it was in that role that I came across Paul Woskov, who had been working on these ideas for very deep drilling for 10 years. And, the rest is history, as they say. I liked the idea. I couldn't find a way to put it down. And, after a year of being a venture capitalist, I decided to start a company with Paul and with Matt Houde, who is my Co-Founder, to call on that commercial journey
Cody Simms (00:05:29):
So much we can unpack in all of the different things you just shared. I'm sure we could probably spend in an hour just talking about your childhood in Medellin, Columbia in the, well, I'm, I'm guessing eighties and nineties. We'll hold that story for another day. I'm curious, you were sitting at The Engine, you were thinking, "Hey, I want to learn VC. I want to be surrounded by deep tech innovation," and how did you go from there to, "I'm going to start a company," did someone slide an idea across your desk? Did a founder pitch you and sort of pitch this idea, but they didn't have a team, they didn't have a business going yet, and you said, "Okay, maybe this VC thing isn't for me. I want to do that." What did that look like for you?
Carlos Araque (00:06:06):
Yeah, so it was very serendipitous. So, I cannot say that I went to venture capital to watch for what to join. I didn't do that. I said, "Let me go to venture capital to learn venture capital, and let's see if I like actually being a professional in venture capital." But, serendipitously, in that role, you can imagine the venture fund from MIT, you get a front row seat to amazing ideas and amazing people pitching you on everything from biomedical sciences to hard sciences to chemistry to material sciences, physics.
(00:06:38):
So, one of those was indeed an idea from the Plasma Science Fusion Center, Paul Woskov in particular. He had been working at the Plasma Science Fusion Center all his career, and he had been talking about geothermal energy and in particular about very deep drilling for geothermal energy for 10 years. I met him in 2017, and he had started all that work in 2007. That was one of those where I said, "Okay, I can help Paul articulate a real company out of this research program."
(00:07:12):
So, at the beginning, I was truly helping this idea become an investible company. No other motivation. How do I make The Engine? How do I build the case for The Engine to invest in this because this just makes sense? It ticks all the boxes. It's transformational, it's hard tech, it's just prime for the mission of The Engine. And, over the course of a year, of course, doing my full-time work as a person in a fund, but also helping Paul Woskov, I convinced myself that this was not only plausible, but absolutely necessary, and non-negotiable. And, we can unpack that a little bit more over the next few minutes. So, at the end of that year, I decided to, basically, help Paul, not anymore as an investor, but as a founder. Let's build a company out of these ideas, and let's start that commercial journey. Paul wasn't going to leave MIT, he's an MIT person, but I was a free agent to become the founder and the CEO of the company.
(00:08:13):
I also met Vinod Khosla, who was instrumental in the beginning of, in the birth of the company. We met very early on. I met him only a month after I met Paul Woskov, and he had been watching this space for geothermal deep drilling for a long time. So, we talked several times throughout the year, and at some point, he offered the first funding for the company. He said, "Carlos, start the company. I'll give you a million dollars. If you need more, we'll give you more, but let's go. Let's do it. And you are the founder, and you're the CEO." So, that's how it all came together. 2018, July, basically a week after I left The Engine, Quaise Inc. was incorporated in the state of Delaware, and that's the beginning of that story.
Cody Simms (00:08:52):
And, did Paul Woskov join you on the journey, or he became sort of a silent contributor on the initial technology inspiration?
Carlos Araque (00:09:00):
He remained at MIT, an MIT person, so he didn't leave MIT for the company, but he then became a foundational advisor to the company. And, to this day, he's still involved in the company through a federal grant that we have through ARPA-E. So, he's very much close to everything we're doing, but he's not an employee, not an official member of the company because he's an MIT person.
Cody Simms (00:09:22):
And, when you were sitting there at The Engine, had you been specifically focused on geothermal solutions? Were you, specifically, trying to look for... Again, you were looking to invest, not join a company, but were you looking broadly across hard tech energy solutions? What had been your focus that enabled you to say, "Oh, this is the one," and, I guess, maybe a second question to that, which is when you were at Schlumberger, and you were working building solutions, was the notion of using plasma lasers for this something you'd even heard of? Was this something that had been talked about for years, but was like, "Oh, this is science fiction," or you were sitting there at The Engine and you've never heard of this, and it blew your mind from the second you heard about it for the first time?
Carlos Araque (00:10:08):
When I first identified geothermal, I mean, I wasn't sold on geothermal from the beginning. It took me more than a year of personal diligence to start saying, "Okay, this actually makes a lot of sense." I had looked at geothermal in my oil and gas career, and I had said, "Okay, this actually doesn't make sense." And, it's very simple. It doesn't make sense because number one, it's harder and more expensive to do than oil and gas. And, number two, it produces a heck of a lot less energy than oil and gas. So, you're never going to be able to bring this into the commercial market. So, I really wasn't very convinced about geothermal.
(00:10:42):
So, I wasn't looking for geothermal specifically, but I was looking for a solution to energy transition. I was thinking like an engineer saying, "Okay, the world runs on 20 terawatts of power. How do we come up with 20 terawatts without destroying the biosphere in the process, mining every single meter allowed out of the biosphere or using every single acre of land to deploy massive, massive renewables. And, that's what first brought me to geothermal. Understanding that it's not just about reducing emissions, but also preserving materials and preserving land for future generations.
(00:11:13):
So, at that point, I converged on three solutions. I said, "Only fission, fusion, and deep geothermal, not just normal geothermal, but deep geothermal can do it." And, that was a very rational engineering like process. Me doing the numbers, calculating the implications, and saying, "What can actually meet the requirements?" So, geothermal started to grow in me as I met Paul and I started thinking more deeply about deep geothermal, more carefully about deep geothermal and doing the numbers. So, that's how I came to that. And, it has only strengthened since because from every single angle that I look at it, it just makes a lot of sense.
(00:11:46):
Now, the second question, Schlumberger. So, I had looked at many technologies for improving drilling within Schlumberger, everything from laser drilling to jet drilling, water jets, electro crushing, preclusive hammers, you name it, including microwave drilling, but not quite in the embodiment that Paul was proposing. Paul was proposing something very radical, which is let's not put anything complex in that hole. Let's not put electronics, let's not put microwave sources. Let's not put electric cables. Let's not put anything complex. Let's just put a pipe and beam energy, raw electromagnetic energy through a pipe. We're talking about a megawatt of EM energy going from the surface to the bottom of the hole and then burning the rock to vaporize and then blowing the ash out of the hole. Nothing like that had ever come in front of me.
(00:12:45):
And, I said, "Is that even possible? Are the physics even possible?" And he said, "Of course, they are. Here they are. I've been working on this. Here's the basis of design, the scientific basis. And, by the way, I've been playing with it in the lab, and it works. Here." So, that was very different. That was new. And, I've been unpacking that for four and a half years now, and the more we unpack it, the more remarkable it seems. In the end, the true breakthrough is the ability to pipe all that energy through a very simple system and minimizing the complexity of the in-hole hardware. That just changes what's possible.
Cody Simms (00:13:16):
So, laser-based drilling has been a, I mean, I have no idea. Laser-based drilling has been a thing in the industry. The notion of using microwaves as the energy source was really a relatively new innovation that Paul brought to the table is what I'm hearing you say.
Carlos Araque (00:13:31):
Yeah, laser drilling had been around. There's a company that's been around for a long time, more than 15 to 20 years that's been doing laser drilling. But, when you start unpacking that as a platform to drill these big holes, you realize the limitations. Lasers are tiny, you need to drill big holes. So, it's very hard to drill a big hole with a tiny light beam. When you move to microwaves, you can do that. But, not only that, because people had been playing with microwaves even in oil and gas for a long time. It's just the elegance of the system design that Paul was proposing. A lot of those ideas were borrowed from fusion. So, fusion gave birth to these ideas that Paul put forward, and it's just that packaging that actually changed the game. So, what's new, really, was connecting the dots in a very particular way. It wasn't about microwaves. It wasn't about lasers. It was just connecting the dots in a very unique and novel way.
Cody Simms (00:14:25):
Let's maybe then take a step to define geothermal for everybody and for me. I think of geothermal in a few ways. One, naturally occurring geothermal in the form of geysers and volcanoes where energy is coming up from the core of the earth and making its way to the surface. And, when I think of drilled geothermal, I think of it, really, in two forms. One, there are, I believe, places in the world where it's used as a heat source, so you're using it as a heat pump to heat buildings. And two, there are places in the world where it's used as an energy source. In most cases, I think you have water that you're injecting down into a well. That water hits the hot earth's core or center of the core, and then comes back up as steam which powers turbines or powers heat source. Is that generally how geothermal works?
Carlos Araque (00:15:17):
Yes, with some modifications. So, it is about thermal energy. The mass of the earth, the planet itself is the largest thermal battery you can possibly think of. It's the size of the planet, and it holds unimaginable amounts of thermal energy. So, geothermal energy, in all of its manifestations, is about reaching into the earth to pull some of that heat out and make something useful out of it, normally, in the form of hot water or steam, which can then make electricity or power an industrial process. So, it is that. You need water as a carrier of that energy, as a thing that's going to go and reach into the earth and pull that thermal energy out.
(00:16:02):
Now, it's nowhere close to the center of the earth. The earth is 6,000 kilometers in radius. 6,000 kilometers, that's as 4,000 miles. That's the size of the United States across from the northeast to San Diego, from Massachusetts where I live, to San Diego. So, we're only drilling 5, 10, 15, 20 kilometers. So, it's not even 1% of 1% of the way there. So, it's a 10th of a percent, actually. So, much less than that. So, it's like pricking the skin on the apple. It's that deep. We're barely going into the earth, but that's enough. That's enough to bring enough heat out that we can power a power plant, that we can power any industrial process, most industrial processes you can imagine. So, that's the general idea with geothermal.
(00:16:49):
Now, it's very hard to reach into the earth, even if it's five to 20 kilometers, it's very, very hard and very costly. I mean, the world record is 12 kilometers, and it took 20 years to do. So, what we're trying to do, in a sense, is to make that process more economically viable and faster, more efficient. If we can do that, it doesn't matter where you're in the world, you can actually reach into the earth and pull some of that heat to power civilization.
Cody Simms (00:17:17):
Am I correct in understanding with current geothermal instances, you're typically drilling two wells? You have an injection well, and you have a production well that's actually, so something putting water in, and something bringing steam out. Is that the typical setup of a geothermal well today?
Carlos Araque (00:17:32):
It can be even simpler than that. It can be just one well. So, if you drill into a geyser, for example, a subsurface water formation that's under pressure, you poke a hole, and out comes steam. So, it's that simple. That situation doesn't exist widely, so you have to make it a little bit more complex. You actually have to go and drill one, not one, but two wells, one to put water in, one to take water out, and you have to fracture or connect across the rock down there to mine the heat to sweep the heat out of the rock.
Cody Simms (00:18:04):
Ah. So, when you hear of horizontal drilling from a geothermal perspective, that's that fracturing from well A to well B so that the steam can traverse across the heat source and come back up. Is that correct?
Carlos Araque (00:18:16):
That's right, yeah, that's one of the embodiments. So, Fervo, for example, does that and Eavor does a different embodiment of that. But, the general idea is that there's a way in for the water, the water sweeps the rock to mine the heat out, and then another well for the water to come out. Now, in our case, we do actually one well for the water to go in and two wells for the water to come out. And, the reason we have to do that is that our water is so hot because we're going so deep and so hot that it changes density significantly. So, we put liquid water in and out comes super critical steam. And, you need two wells for each well going in because you just have so much expansion of that steam and so much power.
(00:19:00):
So, a typical triplet for us is 200 megawatts of thermal energy. That's what we're aiming for, and that starts to look like an oil field type power density, very different from normal geothermal. To give you an idea, when you poke a hole into a geyser, you're going to get maybe one, two or three megawatts out of that. We're talking about a hundred megawatts from one well. It changes the economics, and it changes what you can do with geothermal.
Cody Simms (00:19:23):
And, you mentioned it costs roughly a megawatt to do the drilling once you've kind of gotten through the technical challenges and whatnot. How are you typically, I mean, that's a lot of power just by itself to drill down. How are you typically thinking about powering that with a power source?
Carlos Araque (00:19:39):
So, when you drill for oil and gas, or when you drill in a water well, or when you drill to make a tunnel, the machines out there are usually sized around that range. So, you'll find machines that are typically one megawatt, two, up to five megawatts, maybe. When you're drilling a big tunnel like a big Bertha type machine grinding through the rock like a mole and digging a tunnel, you're talking about 20 to 30 megawatts.
(00:20:07):
And, the way you power that, there's two main ways that you power those industrial processes. The first one is you connect it to the grid. If you have electricity nearby, you just plug it in. The second one is you burn diesel. You'll actually burn a fossil fuel to make electricity on site and power through. And, you're going to invest a megawatt for, let's say a hundred days. That's a lot of energy, but once you're done, you're going to produce back a hundred megawatts for 30 years. So, you're going to make up many, many, many times over the investment. And over time, when you have enough of these things going around, you probably don't need to use the diesel anymore. You just plug it into the next geothermal field to power the next, build out of the second one, the third one, the fourth one.
Cody Simms (00:20:52):
Great. That's super helpful and good context for me. Thanks. And so then, if I understand, today, in the world of geothermal, you mentioned there are some wells where you're basically poking into a geyser. The water source already exists there. You're pulling energy back up. You said there aren't very many of those just because it requires a specific geological feature to exist. And then, we talked about other use cases where there are two wells. You're fracturing across the bottom of the well, the steam's coming back up on the top of the second well. That process is still mostly in development? Are there very many deployments of that scale today, or is that also technology that's primarily just now starting to be explored, leveraging maybe what we learned over the last decade or two with hydraulic fracking and whatnot?
Carlos Araque (00:21:37):
So, let's split the answer into two categories. So, the first category is spoken into a geyser. That's been done for more than a hundred years to make power, to make electricity. You go back to Larderello, Italy, 1905 was the first such thing. You poke into a geothermal field, the radiological conditions exist, and out comes power, electricity. And, those things are remarkably durable. I mean, they go on for decades without fuel and without waste. Now, that's hydrothermal. That form of geothermal is called hydrothermal, and that does exist, and it's prolific in places with the right geological conditions. For example, Iceland, 30% of Iceland's power comes from that type of geothermal, and 70% of Iceland's heating comes from that type of geothermal. The geysers in California, three gigawatts, the largest by far in the world. Kenya, 44% of electricity comes from geothermal because they have the right conditions.
(00:22:33):
Moving to the second type of geothermal. That's no longer called a hydrothermal system, that's called an EGS system, enhanced geothermal system. For that, I could say that's a lot newer. The first real attempts at that go back to the seventies in Los Alamos in New Mexico, and over the decades, the last 50 years, you've seen attempts, some successful, some unsuccessful, but it's very much in development. Companies like Fervo, for example, are actively pushing the knowledge gained through oil and gas shale into that form of geothermal. I think that they'll succeed. There's no reason for them not to succeed because the market is there because these techniques are well known. All we're trying to do is to elevate the game to higher temperatures and larger global scale. So, when you drill deeper, you do all of that stuff in more places at a higher power rating. But, that second category, you could call it still in development, relatively new and still to demonstrate its full promise to the world.
Cody Simms (00:23:32):
And, what's holding back, again, we know what's holding back hydrothermal, which is just access to geological features that have underground water sources. What's holding back enhanced geothermal today, whether it be from an economics perspective, whether it be from a regulatory perspective, whether it be from a talent perspective? Are there certain things that are causing it to not... If I'm a drilling company, that's what I do, I can drill an oil well, I could drill a gas well, I could drill a geothermal. Well, what's stopping resources from going from the first two into the third right now?
Carlos Araque (00:24:07):
Economics. Economics. I mean, as I said before, I've looked at geothermal before, and the economics are just very lukewarm compared to oil and gas. It costs more to develop geothermal, and it pays less. So, it's as simple as that. I mean, you can blame other things like regulation, but it's really just economics. So, what's different now? Why do we care about geothermal now is because we have to decarbonize.
Cody Simms (00:24:35):
Before we go into the climate benefits, which we're going to spend a lot of time on, I guess, also, when you are pumping oil or gas out of a well, it's a portable resource. You put gas in a pipeline, you can send it anywhere. You put oil in a barrel, you send it anywhere. You're pumping steam out of a geothermal well, you need something there to use it. You actually have to have the production infrastructure sitting there right on top of the well to take advantage of it, which I'm presuming that has something to do with the economic inefficiency of geothermal relative to oil and gas if you're a drilling company just comparing A and B. Is that a correct assumption?
Carlos Araque (00:25:10):
Spot on. Imagine if you had to build a refinery in every single oil field. It radically changes the economics of oil and gas. But, luckily, you don't have to do that because you can pipe it across the ocean if you need to. So, yes. Very much so. Hot water doesn't travel well, it cools down. So, you need to build something that takes advantage of the steam or a power plant to make electricity right on the spot. So, yeah. That's another big one. They all play into the economics. It's just the economics are very, very different.
Cody Simms (00:25:40):
So then, when we look at Quaise and what you're doing, which is you're going deeper, presumably at lower cost and lower time horizons than traditional drilling, which we should probably talk about why, then you're able to unlock higher density energy is what I'm understanding. But, you still have this portability issue. You're still, it's steam coming out of a hole. You have to hook it up to something. So, how are you all engaging in that in a way that is more economic once you've got the energy coming out of the ground?
Carlos Araque (00:26:09):
So, you do it right where the thing that's going to take advantage of this thing is already built. So, if there is an industrial process, like a pulp and paper process or a chemical manufacturing process or a power plant or a hydrogen hydrolysis process, water hydrolysis process for hydrogen, no matter where they are built, you can do geothermal right there and then. So, you don't need portability anymore because the resource is truly global. Oil and gas is not available globally. You do have to pipe it across the ocean because if you drill down here, you may not find oil, but if you drill there, you will. Now, heat is everywhere, so you just drill here. It's just a matter of how deep you need to drill. And, once you do that at the right economics, you just co-locate the power source with the load source, the generation with the load, and that's just nothing has been able to do that until today in human history, nothing. For everything else, you have to bring something in or move something. Not in this case.
Cody Simms (00:27:06):
What I'm hearing you say is if your use case is I need heat because I'm building a cement plant or I'm creating a steel mill, you presumably could drill a geothermal well right there on your source and have access to natural heat without having to burn something to get it. Or, if your use case is, I need electricity, then presumably, you could have some kind of turbine created thing that sits on top of the geothermal well. That still requires a lot of infrastructure, but I would presume anything that has an existing turbine, like an existing coal power plant or whatever, could also tap into that, presumably.
Carlos Araque (00:27:40):
Yeah, I mean, there's 10,000 fossil fire power plants all with rotating turbines. So, how about we repower them because they're all fitting from steam. So, yeah, indeed, indeed. That is a big part of the play. And, existing infrastructure, repowering existing infrastructure with a heat source that's clean, it's massively important because I don't think there's many alternatives. Now, you mentioned cement and you mentioned steel. The heat grade of those two in particular is very, very high, much higher than any geothermal can do. So, to get to those temperatures, you probably won't do geothermal. You will probably convert the steam to electricity and then do an electricity driven process to get to those temperatures, which is a lot of what the companies are doing today to decarbonize those two. But, for many other things, 500 degrees Celsius and below, it's plenty.
Cody Simms (00:28:23):
Got it. You mentioned paper mill as an example, I think.
Carlos Araque (00:28:26):
And, chemical manufacturing. Those two are typically very large load centers all throughout the world, and they just need heat. They don't need electricity even.
Cody Simms (00:28:35):
And, hydrogen electrolysis, I think you said also.
Carlos Araque (00:28:37):
Yes, indeed. Direct air capture, hydrogen electrolysis, water desalination. Many of these things you can power on the spot with an abundant firm source.
Cody Simms (00:28:46):
We're going to take a short break right now so our partner, Yin, can share more about the MCJ membership option.
Yin Lu (00:28:53):
Hey folks, Yin here, a partner at MCJ Collective. Want to take a quick minute to tell you about our MCJ membership community, which was born out of a collective thirst for peer-to-peer learning and doing that goes beyond just listening to the podcast. We started in 2019 and have since then grown to 2000 members globally. Each week, we're inspired by people who join with differing backgrounds and perspectives. And, while those perspectives are different, what we all share in common is a deep curiosity to learn and bias to action around ways to accelerate solutions to climate change.
(00:29:22):
Some awesome initiatives have come out of the community. A number of founding teams have met, nonprofits have been established, a bunch of hiring has been done. Many early stage investments have been made as well as ongoing events and programming like monthly women in climate meetups, idea jam sessions for early stage founders, climate book club, art workshops, and more. So, whether you've been in climate for a while or just embarking on your journey, having a community to support you is important. If you want to learn more, head over to mcjcollective.com, and click on the members tab at the top. Thanks and enjoy the rest of the show.
Cody Simms (00:29:55):
All right, back to the show. And so, let's talk about what it is that you are using to do this wonder drilling, for lack of a better term on my end that you're doing relative to the mechanical drills that exist today. So, maybe talk about what exists today from a geothermal drilling perspective, and then as you were first sitting there at The Engine, and you came across this research, what about this millimeter wave drilling was enticing to you, and how does it work?
Carlos Araque (00:30:26):
The basic idea is repurposing the oil and gas capabilities. So, oil and gas drilling have been evolving for more than a hundred years and are highly optimized for the first layer of the lithosphere, what we call the sedimentary rock. So, oil and gas, water aquifers, all of those things are in the sedimentary layers, and we have very good drilling technologies for that. You take a drill bit, you rotate it, you grind the rock, you make a hole, you produce those fluids. When you talk about geothermal, especially high grade heat geothermal and global geothermal, that level of heat is only available in the basement. It's not in the sedimentary rock, but in the basement, and that's no longer the domain of oil and gas. They don't drill into the basement because they hardly ever find any oil and gas there.
(00:31:21):
So, at that point, you're doing things very differently, and you're in new territory. So, the way we're going to drill is we start by conventionally drilling with co-oil and gas to drill through the basement. Once we're in the basement, we're going to deploy millimeter wave drilling, and I'll explain what that looks like. So, the best analogy I like to use is people are familiar with fiber optics on lasers. You and I are recording this podcast in real time because there's fiber optic all over the place, and information travels at the speed of light with very little attenuation. So, now imagine that the fiber is no longer a tiny piece of glass, but a, let's say five inch diameter metallic pipe, pipe that looks exactly like oil and gas pipe. That is your fiber. And, by the way, there's hundreds of thousands of feet of that fiber being produced every year because oil and gas is there. So, that's the first big idea.
(00:32:15):
The second is in the same way that the laser travels through the fiber very long distances with high fidelity, well, this pipe can actually carry a millimeter wave beam, which is in the 30 to 300 gigahertz range very efficiently over very long distances. So, that's the second analogy there. We're just going to pipe energy from point A to point B with very high fidelity, very low attenuation. So, at that point, we have the first big requirement of making a hole. You have to put energy into the rock to destroy the rock, and as you go deeper, it's harder to do that with mechanical drill bits because you lose energy on the way down. This is an entirely different way to do it. You beam the energy at the speed of light, and it evaporates the rock just like your microwave kitchen boils water.
(00:33:03):
The second is we're going to have to remove that material to make a hole. If you don't remove the material, the hole plugs itself. So, you're going to have to take out this stuff from down there. In oil and gas you use mods. You basically circulate a thick, viscous fluid to pick up the cuttings and pull them out, float them to the surface. In our case, we do something very similar but different. We vaporize the rock, so the vapors condense back into volcanic ash. It's literally a very fine volcanic ash, and we blow it. We don't have to pump a thick liquid fluid to push it out of the hole, we just blow nitrogen or air, and it blows out of the hole. So, it basically pulls it out, and you can do that over very long distances.
(00:33:48):
So, it's just a way to, number one, put a lot of energy down in that hole, and number two, take material out that hole very efficiently in a very different way. So, that's the big idea behind millimeter wave drillings. But, the important thing to remember is that it leans on the existing infrastructure of the oil gas industry. It starts with that, and only when it's necessary it switches to something very novel and different.
Cody Simms (00:34:07):
And, I have to ask. If you're blowing a bunch of volcanic ash out of a hole, presumably, it's ending up in the air around us. Are there local environmental concerns at the site of the drilling instance that you're having to think about as you do this?
Carlos Araque (00:34:22):
Yeah, so when you drill a well, you're not allowed to dispose of the fluids into the environment. In the same way, when we drill one of these wells, we're not allowed to just blow the ash out into the air. You have to run it through a separation system and neutralization system, and then you'll probably pack it into raw material. What comes out is put in a form that is built into blocks. It's not vented into the air, and it's not good to breathe volcanic ash, so we're not going to do that. We're going to put into block form, and them use a secondary raw material for many, many industrial processes.
(00:34:57):
Now, we haven't done this in the field, so let's calibrate on that. The company is still quite early. What we've done is taken the technology out of the lab into a larger scale. We've scaled the technology by 10x and very shortly 100x, but we're now building the first fuel deployable systems to go and do it for the first time ever in the open, under the open sky. But, that comes in 2023. Now, luckily for us, 2024. Luckily for us, there's a lot of precedent in oil and gas to know how to do this, and the whole team comes from that industry. So, we know exactly the technology's available to do that properly.
Cody Simms (00:35:28):
And, when you're doing these lab scale tests, you're testing at millimeter, centimeter depth. What are you having to learn there versus when you're ultimately deployed in the future? I think you said you're drilling a 20 kilometer hole, which is very different than centimeter depths in the lab. So, what are the kinds of things you're trying to validate right now? What are the core assumptions that you're needing to prove to yourselves as you're in the lab and/or just starting to move into real world test use cases?
Carlos Araque (00:35:59):
So, in the lab, it's all about making the process work as efficiently as possible. You can burn a hole through rock. Paul Woskov showed that a long time ago. That's not the challenge. The challenge now is how do you do it as fast as possible with the least amount of energy possible and end up with the best possible cylindrical, useful hole? So, tweaking the parameters, how much energy to put in, how much gas to put in, how quickly to advance it. Those things are very much at the heart of the lab work, making the best hole we can possibly build. As we move into the field, the challenges first start to be around reliability and operational lab time. It's very different to take a gyrotron, which is the microwave source in the lab as it is to package it and put it in our truck and go in the middle of nowhere and drill a hole.
(00:36:57):
So, a lot of engineering challenges around making the equipment, packaging the equipment and making it robust enough. As you go deeper, and I have to make a comment here. We talk about 20 kilometer deep holes, but it's important to realize that that's not where you start a business. If you can extend existing geothermal holes by one kilometer, you just made them much, much better. So, you start there. One kilometer is plenty to be in business, and as you go to two kilometers and three kilometers, all that means is you can go to more and more and more places.
Cody Simms (00:37:31):
And, remind me, what's the typical depth of geothermal today, is roughly how deep under the surface?
Carlos Araque (00:37:36):
One to two kilometers. It's rare for it to be three.
Cody Simms (00:37:40):
So, you need to basically 2x the performance of existing geothermal depth to get significantly more energy out of the holes that you're drilling is what I'm hearing you say.
Carlos Araque (00:37:50):
Indeed. Imagine you go to a geothermal field in Iceland, for example, and it's already two kilometers down. Well, what if we extend it to three kilometers? Well, all of a sudden your bottom hole temperature just went up from maybe 300 to 500, and that just changes the grade of the heat. So, indeed, you're talking about doubling, but that is also hard because if you try to take a drill bit to rock that hot, it wears very, very quickly, and that's where the economics start to play out. So, it's first about drilling hot, and it's second about drilling deep. So, as we go to one kilometer, two, three, we extend more and more around the world, and that's how we take the business. Ultimately, we want to do 20, because when you do 20, it means all of humanity can enjoy geothermal, all of humanity without exception.
Cody Simms (00:38:37):
And, what I'm hearing you say on the assumptions to prove is the ability to drill a hole with a millimeter wave, microwave instance is relatively known, though I don't know, is that true even at extreme depth? I guess, bookmark that. But, I'm hearing you say that a lot of the challenge is on the process around how to actually continue to put materials down into that depth of a hole, how to, I guess, presume extract the steam properly out of the hole, out of the other holes that you've drilled. So, it's not the drilling itself, it's the actual well creation that sounds like the work that is very technically challenging, though I'm probably massively oversimplifying that.
Carlos Araque (00:39:19):
But, you're right. I mean, the challenges around scaling are not just about drilling. It's about extracting the heat and making useful energy. So, there's many, but there's a lot of precedence to many of these challenges. What's really new and unprecedented is the ability to go into 400, 500, 600 degrees Celsius rock and drill. That is unprecedented. That's something humans don't know how to do, and that's perhaps the thing we're bringing forth is the ability to go into that horizon. Everything else already exists in some form or some fashion. There's challenges with scaling that, but those are incremental challenges. The real evolutionary disruptive challenge is going to higher temperatures, and that's what we intend to do.
(00:40:01):
Now, there's another challenge as you go deeper and deeper. So, at some point, wellbore integrity, the ability for this host to stay open over decades. It's a challenge. And, we have ideas about how to do that, but remember, our first well is not going to be 20 kilometers deep, not even close. It's going to be one kilometers. So, why do we talk about 20? Because we think the technology can scale to 20, and within the physics scale to 20. So, we're going to get there, but we're not going to start there.
Cody Simms (00:40:27):
Got it. The ultimate vision that I'm hearing you articulate is at massive scale decades from now, if we can reliably drill at these depths, this can be, essentially, a full scale fossil fuel replacement that can leverage a lot of the existing infrastructure that fossil fuel maybe already has in place.
Carlos Araque (00:40:44):
I believe so, and I believe it's one of the very few things that can do that. And, we're talking about tens of terawatts of capacity that could never possibly be built with wind, solar, and batteries because we just don't have enough materials, enough land, enough labor to do that.
Cody Simms (00:40:58):
On the short term horizon, how much is regulation a reality in your world? I presume, in the US at least, most drilling, geothermal drilling is done on public lands where there are geysers and national parks and things like that. Is that correct?
Carlos Araque (00:41:12):
It is. So, normally, prime geothermal locations are coincident with prime federal lands like Yellowstone. It's the prime example of that. But, when you divorce yourself from the need to go to those locations, then everything changes. You're going to go to private lands, and some of it can be expedited. Now, don't get me wrong. Regulation still gets in the way, and I'll tell you a case in point, not an imagined case, but we already attempted to do the first field demonstrations, not of the millimeter wave drilling, but before we do millimeter wave drilling in one of the locations we have in the West coast, specifically in Oregon, in Newberry, we already started doing geophysical prospecting.
(00:41:54):
We're talking about shallow drilling with existing technologies, seismic monitoring to understand the subsurface structure and listen, you want to listen to the ground for the next year to know what's there before you go in and do a millimeter wave drilling campaign. We already attempted that in November, and the BLM wasn't able to come through with the permit, so we had to wait the winter season, and now we're going to go there in spring to actually be able to go back there. So, it does get in the way. Luckily for us, it's not critical path yet, but as we get into 2024 and '25, it can become critical path, indeed.
Cody Simms (00:42:29):
I'm curious thinking back to what oil and gas went through over the last two decades as hydraulic fracturing became the key technology in that space. Was there ever any, for lack of a better term, innovation permitting that happened, which is, "Hey, we're not looking for permitting to do this project permanently forever in this location. We're using it because we're trying to test a new technology." Does that matter when you're going to seek a permit for something?
Carlos Araque (00:42:58):
To some extent. So, what oil and gas was doing in the very early days of the fracking revolution, the shale revolution was in many ways not very different to what they were already doing to stimulate wells in conventional reservoirs. They were pumping pressure, they were pumping proppants and improving, they call it the skin factors, that's what they were trying to do. Now, regulation caught up to them because they started to push that process so much that you started getting into contaminated, cross-contamination of aquifers and you started getting into induced seismicity. So, it's the kind of thing that, "Hey, oil and gas seems to be doing their thing as usual, business as usual," but all of a sudden these issues pop up, and regulators have to come in and catch up and say, "Hey, stop it. You can't do that. You have to do the better ways," and the industry is very good at coming up with better practices and very quickly deploying those practices.
(00:43:47):
So, I think with geothermal, there's going to be a little bit of that. So, I think regulation will not precede the first pilots. We're going to go and attempt these very hot drilling systems, and it's going to look just like normal drilling, but a little bit deeper, a little bit harder, and we are going to have to make some checks. But, it's only after we start pushing that boundary repeatedly and consistently all over the place that regulators might come in and say, "Hey, there might be aspects about this that we might need to regulate." So, you always have to be very mindful and very cooperative. You cannot ignore it. You have to be proactive, and you have to preemptively work with regulators to actually clear the way and not shoot yourself in the foot five, 10 years down the road because it's going to slow down your growth if you don't proactively manage this.
Cody Simms (00:44:31):
And, you do have the, I guess, regulatory risk or the environmental risk that I'm hearing where, from what I understood what you said earlier, you are planning to inject water down at one well in order to extract steam out of the other wells that you're drilling. So, there is that potential aquifer cross contamination and whatnot wherever you fractured the under surface of the earth, that you also are going to have to deal with much like the hydraulic fracking industry is how to deal with,
Carlos Araque (00:44:57):
Yeah, yeah. The only difference I could say between the oil and gas situation and our situation is that we're not going to be doing that where there's oil and gas. So, if you cross-contaminate, I mean, you're just basically pumping water into water. You're not pumping gas into water, and that's quite different, but you still need to be careful because the water that's down there may not be the same quality as the water you pump. So, you got to be mindful about geo chemistries, water chemistries, and be very carefully monitoring your fracture propagation. But, these are just things we're going to have to do, and we cannot shy away from them. Everything has an impact. Everything humans do have an impact. We cannot shy. We just need to learn and do it properly.
Cody Simms (00:45:37):
Shifting gears a little bit, what does the business model look like for you? Are you a drilling company? Are you a technology licensing company? Are you working to build into contracts with the end consumer of what's coming up out of the well where you're sharing their future revenues or profits? What is the, and I know you're at bench, lab scale testing mode right now, so you probably haven't figured all that out yet.
Carlos Araque (00:46:00):
No, no. We know exactly what we want to be. We want to be the provider of steam. We sell steam at cost parity with the steam equivalent in fossil fuels. That's the product. The product is steam. And, who buys steam, you ask? Well, a power plant buys steam. Today, they don't buy it because they buy gas or coal to burn in their boilers and manufacture their own steam, but we're going to sell them the steam so they don't have to buy the coal or the gas, and we're going to do it at cost parity or better than that fossil fuel equivalent. Who else buys steam? Well, a chemical manufacturing, we go and ask a chemical manufacturing plant. A lot of the load's, the energy load's actually steam. And, again, they have to burn a fossil fuel to make that steam to do that process. We're going to remove that from the equation. So, that's the product.
(00:46:47):
Now, should we be in the business of making electricity? Maybe. Only if it's necessary to mobilize the sale of the steam. If there's not a power plant, we're not shy to do a power project development with the right equity partners and the EPC contractors to actually build the power plant and create the vehicle for the electricity to find a market. But, that's not the intent. Do we want to be a drilling services provider? I mean, only at the very beginning while we're a small company. Only at the very beginning when you have to build up revenue basis would you consider that temporarily. But, the real prize in the energy transition is in selling energy, and that's what we intend to do. We are an energy company, not a drilling company.
Cody Simms (00:47:26):
That's clear. I mean, I love when founders have a really clear view of not what you're selling, but what the customers are buying. And so, being able to articulate very clearly that what they're, ultimately, buying is the ability to turn their turbines or whatever they need to do to generate the power they need to run their operations. The risks that I see are a few. One is technology doesn't work. There's that risk. There's the drilling technology works, but the ability to scale it from a well infrastructure perspective and whatnot doesn't work. There's some risk that it doesn't pencil out, the amount of infrastructure you have to build to extract the steam for the buyers of the steam doesn't pencil out, but it almost feels like...
(00:48:09):
The tech risk is real. I don't want to dismiss that. But, there's also a risk that other forms of massively abundant energy beat you to market. There's so much going on in fusion, for example. Is there a chance that the world just looks so different 20 years from now that by the time this is scalably ready, it's just not the best way to generate power? And, I don't know if that's a ridiculous way for me to think about things, but I'm curious how you articulate the risks in your business.
Carlos Araque (00:48:37):
Yeah, yeah, very happy. I think about this a lot. So, on the technical side, you're right. The technology could not work, it could not scale. We know it works. It works in the lab, and as we scale it to 10x, 100x, it works. It works even better, but there's always a risk until you do it. But, that's exactly why you build a company, you capitalize a company. So, put that aside.
(00:48:57):
So, abundant clean energy. I am a firm believer that for the rest of our lifetimes, we live in a supply constrained world when it comes to energy, clean energy. The only reason that statement is not true is if we allow fossil fuels into the mix. Only then, we have indeed more supply than demand, potentially. But, if you remove that, we live in a supply constrained world. Can there be an energy source, let's look at primary energy sources, primary energy sources that can potentially provide the 300,000 terawatt hours that the world will need, all things considered, not just electricity, all energy considered by 2050? I don't think so. I can only come up with three. Three that have the scalability, the abundance, and the global reach necessary. Fusion, fission, and deep geothermal.
(00:49:53):
Why not wind? Why not solar? Why not batteries? Well, they're very low power density. We don't have enough land. We don't have enough materials, and we cannot afford to deploy as massive workforces to do that. It's just a step backwards. They'll play a role in the 2020s, but as much role as they play, we'll get to 2030s not having made a dent on the energy mix. So, I don't think those are the solutions. What about fission? Geopolitically sensitive. You have to move fuels, nuclear fuels across the globe to do it everywhere. So, I don't think that's going to pan out, not at the global level. I think the G7, maybe G20 countries will have that to a significant extent if we go for fission, but I don't think Colombia, Melledin will have a fission power plant. It's just not possible. We don't even have refineries for God's sake.
(00:50:39):
What about fusion? Well, I'd love nothing more because I think we need to be a fusion civilization, but even if fusion worked today at 5:00 PM, 6:00 PM the workforce doesn't exist. Building, deploying, operating, maintaining the number of fusion reactors that are necessary to power civilization, it's just something that's going to take us a better part of the next two generations to build, just the human power and the expertise. And, that's just that. So, how is geothermal different? Well, the workforce is there, infrastructure is there, and it's proven to work for a hundred years. I think it's the best chance we have at actually getting it done.
Cody Simms (00:51:22):
Yeah. Let's talk about the workforce transition, but I just want to underscore what I heard you say, which I think you're the first person I've ever heard say this, which is your perspective is that wind and solar are essentially a bridge fuel to get to these other three more abundant forms of energy. Am I interpreting that correctly? Which is a super interesting point of view, for sure.
Carlos Araque (00:51:41):
Yeah. I don't know if I call it a bridge fuel because a bridge fuel kind of holds the fort in the meantime. And, I don't think they're holding the fort. I think they're just trying their best to replace a tiny, but they're chipping away with a tiny little chisel at this massive problem. I think the bridge fuels are probably more like gas, even though it's not clean, but it's less carbon intensive. So, I wouldn't call them a bridge. I think they're just what we can do now, and we should do it because every watt we move is good.
(00:52:09):
But, when you look at the immensity, when you look at the numbers, terawatts, thousands of terawatt hours we need as a species. And, as hydrogen succeeds or synthetic fuels succeed or direct air capture succeeds or a clean steel, clean cement, all of the above. There's billions of dollars of venture going into these things. And, some of these things will pan out. To power all of that stuff, we need so much energy, so much energy that wind, solar batteries, any of the low form, low power density renewables, it's a step backward, not forward.
Cody Simms (00:52:44):
And, with the deep geothermal use case, you're also... Presumably, the surface of the earth geographic footprint is significantly lower. The amount of energy you're able to get relative to the amount of land space that you're taking up, I would presume is significantly lower.
Carlos Araque (00:53:02):
Well, it's significant. Let me put it this way. This is the simplest way I've been able to explain this. If you look at the total amount of habitable land on the planet, that's 150 million square kilometers. 150 million. 1% of that, only 1% is what humans have taken on its build space, cities, infrastructure, shipping lanes, railroads, et cetera. 1% of that is taken up by humans in the build space, and that includes the energy system, power plants. Put a pin on that for a second. So, let's look at the power density, the land use per unit of energy of fossil fuels, which is what dominates the energy mix today. It's about a thousand watts per meter square. Solar is 10, a hundred times less, and wind is one, a thousand times less. So, it means that to replace a unit of fossil with solar, you command a premium of a 100x in land or a 1,000x in land if you use wind. Is that a problem?
(00:54:00):
Well, I just told you 1% is used for the build space, so multiply 1% by ten, it's 10%. Can we afford to use 10% of the habitable space for the energy system alone? And, the answer is no, not by a long shot. People say things like, "Well, if we cover the Sahara and solar panels, we could do it," but it's just not going to happen. And, if we start spreading it over the place, it's just never going to happen.
(00:54:22):
Third statement, the World Resources Institute will say things like, "To feed the world by 2050, we have to cultivate an area the size of India, globally, to just keep up with the need for food." So, look at the pressures on land use, biodiversity dwindling. Do we have the land to do it? I don't think we do. I don't think we can afford to do it. We need to move forward by using less, not more to procure energy and to procure much more energy to move civilization forward. So, I firmly believe we're not going to succeed unless those three that I mentioned before, fission, fusion, and deep geothermal actually scale. Just not going to happen. Physics won't allow it.
Cody Simms (00:55:01):
Super interesting perspective, Carlos. And, just to make sure we don't skip over the talent perspective that you had, which is fusion requires an entirely new wave of knowledge and talent in order to scale it, assuming it someday reaches its latent potential. Deep geothermal, I would assume, mostly leverages existing drilling talent that has been cultivated over the last hundred years of oil drilling. Where are the direct parallels from a talent perspective, and where are new skills going to be needed?
Carlos Araque (00:55:31):
So, let me put numbers first to this. If you look at, let's look at how much capacity different industries can put into the world mix. And, let's start with renewables because you talk about exponential deployment of renewables. So, wind and solar combined have deployed about 1.5 terawatts. That's very remarkable over 30 years. 1.5 terawatts combined in 30 years. That's significant. The world runs on 20, so that's significant. It's not insignificant. Let's look at oil and gas. Oil fields decline because they lose pressure. So, the oil and gas is constantly drilling and discovering and producing more oil and gas. If you just look at the delta required to keep up with demand, that's about one terawatt. So, the oil industry for the last 30 plus years have been consistently putting a terawatt just to keep up, not even to increase, but to keep up in the world.
(00:56:27):
So, that means the workforce, the infrastructure, the supply chains, the regulatory frameworks are proven to exist. Wind and solar are scaling very healthily, but they still have decades to get to the level of deployments required. And, fission and fusion, forget it. They're nonexistent. Fission because it's been dwindling, and fusion because it hasn't been proven to work yet. So, even if after it proves to work, it's still going to take the better part of the next two generations to actually build a three to 10 million people strong workforce to globally deploy these things at scale.
Cody Simms (00:57:01):
Carlos, I think we'll wrap up here, but you've recently raised a significant sizable series A of north of 50 million dollars from both a combination of venture capital and strategic investors, folks that have energy experience and skillsets. What's next for you? You mentioned you're moving beyond the lab, starting to do tests in the real world. What does the next year or two look like for Quaise?
Carlos Araque (00:57:27):
There's two big mandates to the team, and the team is awesome. The first one is let's get out of the lab. Let's build the field deployable systems, and let's start doing these under the open sky. That is the next massive milestone for the company, and you can unpack that into a very hard engineering undertaking. We're doing that in Houston. We're building those machines in Houston. The second one is, let's go and talk to the power plants. Let's talk to the steam load centers. Let's actually start to build a case. We have extensive daily economic analysis for many load centers. And, no matter how we look at it, if you assume the technology works, I mean, it's just a no-brainer.
(00:58:08):
So, we want to bring those load centers and start landing the first pilots. Who is the first power plant, and what sort of structure, capitalization structure, partnership structure do we choose to actually go and do it? Because it's going to take two to three years of pre-work even before you move any equipment into the field to actually go and convert that power plant. So 2023, '24, which is the capital we have right now. It's all for that. Let's get into the field, let's get in front of the client so that the next phase, the B round is going to be about making first geothermal steam and repowering that first asset.
Cody Simms (00:58:43):
And, where do you need help? For anyone listening who's intrigued by what you're doing, maybe has all sorts of different technical or business skillsets or relationships, what are the highest priorities for you right now that you think potentially listeners of the pod might be able to help out with?
Carlos Araque (00:59:00):
So, on the technical, I mean, we're working with a very thermodynamically intense process. We're vaporizing rock, so pretty much the whole breadth of physics apply. We need expertise with engineering. We need expertise with physics, with chemistry, with material science, with modeling and simulation, you name it. I mean, this is hard stuff. This is hard tech at its best, and we actively look for and hire people in those spaces. Now, on the business side, it's something that always lingers in my head. What is the value of a company in a world that's supply constrained? What is the value of a company that can, on the spot, without fuels and without waste, provide abundant, clean supply? What is the value of that company, and how you best realize that value? That's a massive challenge. I think that requires very, very high level creative thinking about business models and ways of partnerships.
(00:59:52):
When I hear about a PPA, it's boring. Boring, why do we need a PPA? This is the past. How do we eat up into the value chain to create the most possible value, not only for the company, but for humanity. I like people who like to embrace those challenges. The first challenge is in Houston, that's the engineering science. The second one is in Boston where I live, which is let's build that business. Let's trim it. Let's quantify, let's convince investors that this, giving money to this undertaking is non-negotiable. This is the only way forward or one of the very few ways forward.
Cody Simms (01:00:25):
Carlos, I super appreciate you coming on today, sharing your story, sharing what Quaise is building. It's an incredibly inspiring vision of what the world could look like. What didn't I ask? Where should we have gone with the conversation that we didn't go?
Carlos Araque (01:00:39):
I think we nailed everything. Usually, when they ask me that question at the end, I say things like, "Let's think about the scale. Why bother to do this? Don't we have the solution already? Don't we have everything we need, it's just a matter of politics?" And, the answer is no. We lack the technologies to do this, so that's why we need to do this stuff. And, this stuff's just non-negotiable. So, that's the point I always like to stress because this is very hard to do, but it needs to be done. It must be done. It's non-negotiable. But, we touched on that when we talked about power densities and land use and large skill deployments and workforces. So, I think it's well covered. Thank you.
Cody Simms (01:01:13):
Thanks for your time, Carlos. I appreciate it. Hope everyone enjoys.
Carlos Araque (01:01:16):
Thank you, Cody. Bye-bye.
Jason Jacobs (01:01:19):
Thanks again for joining us on the My Climate Journey podcast.
Cody Simms (01:01:22):
At MCJ Collective, we're all about powering collective innovation for climate solutions by breaking down silos and unleashing problem solving capacity. To do this, we focus on three main pillars: content like this podcast and our weekly newsletter, capital to fund companies that are working to address climate change, and our member community to bring people together as Yin described earlier.
Jason Jacobs (01:01:44):
If you'd like to learn more about MCJ Collective, visit us at www.mcjcollective.com. And, if you have guest suggestions, feel free to let us know on Twitter @mcjpod.
Cody Simms (01:01:59):
Thanks, and see you next episode.
