Interview Preparation

Casey Handmer is not intimidated by very large amounts. Billions of acres. Thousands of gigawatts of solar energy. Billion metric tons of carbon.

its start-up, terraforming industries, aims to operate at these ambitious scales. The company wants to convert hydrogen and atmospheric carbon into synthetic natural gas at scale. It’s more than a little mind-boggling, given that the startup is barely two years old, with fewer than fifteen people on the payroll, and around $11 million in funding. But if the company is successful in its goal, displacing a large amount of carbon being released into the atmosphere, that is the only scale on which it is worth operating.

Terraform Industries has developed a system that captures carbon dioxide (CO2) from the air and creates hydrogen from water, all using cheap solar energy. The system, called the Terraformer, then combines the hydrogen and CO2 in a chemical reactor to produce natural gas. According to Handmer, the chemical reactor is already reaching 94% methane purity, which means it is making synthetic natural gas fully compatible with existing distribution pipelines.

Combining hydrogen and carbon to make synthetic fuel has been done before in a number of ways. Historically, such processes used coal as carbon input, a hardly carbon-neutral substance. More recently, projects like Store&Go in Europe have achieved a system from atmospheric carbon to synthetic gas, but Handmer said the group has not achieved positive economic results. Other initiatives have successfully generated “green methane,” as it is sometimes called, but have been effectively thwarted by the enormous energy demands of such processes and the high initial capital costs of large-scale industrial projects.

Terraform Industries’ approach is different: Instead of physically massive systems, similar to today’s power plants, a single Terraformer is designed to fit in a shipping container. The company is betting that the rapidly declining costs of solar energy, as well as market subsidies, will create a favorable economic unit compared to existing fossil fuel production. Soon, Handmer estimates, it will be cheaper to synthesize natural gas from solar energy rather than extract it from the ground.

The company objective is best considered to be an ‘Earth Shot’, rather than a moon shot. “Terraform,” a word more commonly used in science fiction novels, describes a process of greening an alien planet to make it suitable for life. That is one way to understand the mission of Terraform Industries: to transform the Earth back into itself.

Handmer, who has a Ph.D. from the California Institute of Technology, said he became interested in synthetic fuels while still working at NASA’s Jet Propulsion Laboratory. At some point, he says, he realized that natural gas “is probably the best chance we have to do something about climate change in my lifetime.”

“I may as well get on with making it happen.”

the terraformer

The Terraformer is a simple machine. It is made up of three subsystems: one that removes CO2 from the air through direct air capture; an electrolyser that creates cheap hydrogen from water; and a chemical reactor, sometimes called a methanation reactor, to produce natural gas. All components have been designed in-house and all three run on electricity generated from solar power. The result is a natural gas product that is fully compatible with systems that use natural gas, such as a gas stove, or that can be used as a raw material to make plastic, chemicals, fertilizers, paint, or fuel.

“It’s completely replaceable,” Handmer explained. “It doesn’t require opportunities, modifications, new pipelines, new infrastructure.”

It is not the system that is complex. In this case, it is the business plan. To displace a significant amount of CO2 from the atmosphere and produce enough natural gas to begin to substantially replace fossil fuels drawn from the earth, the company will need many, many, many terraformers.

How many? according to a recent white paper, the company estimates that it will need to build 8,000 factories to scale production of Terraformer machines to more than 1 million units per month for the next decade. But it doesn’t end there. “Our civilization will need between 300 and 400 million machines, manufactured at a rate of about 60 million per year, which is comparable in terms of numbers, mass and capital flows (but not in complexity, thankfully!) to industry. world automaker, says the white paper.

The process is also energy intensive: “The energy demands are astronomical,” the company writes in a blog post – so just building the Terraformers isn’t enough. There will also have to be an incredible accumulation of solar energy around the world. Based on current estimates, Terraform believes humanity will need to increase annual solar panel production by something like 1000x. The white paper suggests that if production continues to increase at the current rate, doubling every 33 months, we will reach that rate in 20 to 30 years. That amount of solar energy will require about 2 trillion acres of land.

“80-90% of the electricity generated on Earth will go to synthetic fuels,” Handmer said. “That’s pretty crazy. At the moment, it sounds crazy, but it is possible.”

Terraform Industries does not plan to sell the natural gas, but rather the Terraformers. Most of the company’s customers, Handmer expects, will be solar power developers, who, he said, can market the final product to natural gas buyers. The gas could be placed directly in a pipeline or on a truck. In part, Handmer is confident there will be enough solar capacity because of the revenue-generating potential of the Terraformer. Far from there not being enough solar capacity, he estimates that the Terraformers will increase the demand for solar power by about a factor of ten. Eventually, the company wants to generate enough demand to mass-produce Terraformers, enough to build 50-100 gigatons of carbon capture capacity worldwide. The idea, by encouraging solar capacity, is to turn the current system around: instead of burning hydrocarbons to generate electricity, it uses electricity to generate hydrocarbons.

It’s a bit counterintuitive to combat climate change by producing hydrocarbons, and certainly anathema to some climate activists to suggest that humanity continues to search for hydrocarbons, but Handmer insists that CO2 has “no moral valence.”

“There is nothing inherently wrong with CO2,” he said. “Countries that emit a lot of CO2, in general, have a good quality of life, low poverty and good economic development. The problem is that the CO2 comes from the carbon that was underground and is now in the atmosphere, and it’s a pretty slow process for life to take that carbon out of the atmosphere and put it back underground. That imbalance is causing climate change.”

The company’s “success condition” is to reduce net fossil carbon flows by 10 times their current level. As the white paper says, “A decade or so of frantic work on a massive scale to displace fossil carbon production, forever.”

So far, the company has reached agreements with California utilities SoCalGas and PG&E to sell synthetic gas in their distribution systems. The company says it has also “approached many other utilities, as well as several companies in the oil and gas industry, regarding potential pilot programs, in the US and Europe.” While continuing prototyping and development, the company raised about $11 million through a seed round and seed extension from investors, including Stripe co-founders Patrick and John Collison. The $6 million seed extension round closed last month.

The company still has a long, long, long way to go before its full vision becomes a reality. Handmer is nothing if he is not determined.

“My experience, I think like all startups, is the triumph of ignorance and hope over ordeal,” Handmer said. “Very, very few start-ups are started by people who really fully appreciate the magnitude of the difficulty, the persistence, just trying to keep it going as needed.”