How Terraform Navigated The Idea Maze

Originally posted on the Terraform Industries blog.

Terraform Industries is making cheap, synthetic, carbon neutral natural gas from sunlight and air. I founded Terraform in November 2021 with a clear vision of what this product would look like, how it would work, and a 95% correct preliminary design for the various components and system integration. No plan survives first contact with the enemy, but overall, we’re doing better than I ever dared to hope. We have a kickass team that delivered a comprehensive end-to-end demo, validating our low capex approach by making carbon-neutral pipeline grade synthetic natural gas and selling it to utilities.

In the intervening years, though, I’ve come to realize that obvious things aren’t actually obvious, in general, so here I’ll explain why Terraform’s radical architecture is both unconventional and also inevitable.

We want to increase the supply of cheap, energy intensive materials that are foundational to our civilization.

Incidentally, finite and expensive fossil sources for hydrocarbons cannot scale sufficiently, so solving this problem will also solve carbon emissions among a bunch of other problems. In fact, I’m convinced that a cheaper source of carbon neutral fuel is the *only* thing that can displace fossil fuels.

The most polluting industries are coal, oil, natural gas, concrete, and steel.

I don’t mean to exclude anyone, but solving any one of these problems takes a big chunk of the problem out. We can have as much carbon-neutral vanadium as we want but it won’t make a dent in emissions and it isn’t a path to post-fossil abundance.

Solving fuels helps to solve steel and cement too, so let’s focus on fuels.

Product must compete on cost.

Energy intensive fuels and materials are commodities whose cost is driven by energy opex and whose cheap reliable supply is essential to our civilization and life as we know it. There is no economically or politically sustainable way to make synthetic fuels at scale unless they are net generators of value, which means they must at least be cheaper on the margin than drilling.

Go to cheapest energy source, focus on geographically distributed, unlimited feedstocks.

We want to make oil and gas, which are hydrocarbons, chemically speaking. We need a source of hydrogen, carbon, and power. All must be as cheap as possible, or we will have no chance of competing with drilling as a source of fuel, and thus no chance of delivering value to customers.

We can make an argument that point source carbon capture is cheaper than direct air capture (DAC) but point sources are limited, geographically localized, and have their own externalities. They also require the captured CO2 to be transported somewhere else. So we’re going to have to solve DAC.

Same with hydrogen – we will need to make green hydrogen from water and power, which is easy enough to do, but it has to be done cheaply, which means we need lots and lots of cheap power.

How do plants do it?

The atoms in your body mostly come from food which in turn came from plants. Plants are mostly made of carbohydrate biopolymers, and the carbohydrate is derived from water and CO2, powered by sunlight. Photosynthesizing plants cover almost the entire Earth. Their mass derives from water and CO2 which themselves come from the air. Almost all the hydrogen, oxygen, carbon, and nitrogen atoms (>96% by mass) in our body were, relatively recently, part of Earth’s atmosphere. Half of the nitrogen atoms came via the Haber-Bosch process for making synthetic nitrate fertilizer.

That’s interesting. But if plants could meet humanity’s energy needs, we would never have needed to mine coal to start the industrial revolution. If we fed all the world’s plants into biofuels it would meet barely 10% of demand – it just doesn’t scale.

Cheap solar photovoltaic power is the key.

This is not the place to sing the praises of solar – I have done so elsewhere. Suffice to say that solar PV is far cheaper, and growing far faster, than any other energy source in history.

Ordinarily, oil is burned as fuel to make electricity, with about 35% efficiency. We can convert electricity back into oil, with about 35% efficiency.

The golden rule of business is to buy inputs where they are cheap and sell products where they are expensive. Synthetic e-fuels are a terrible idea, unless solar PV electricity is about 35% x 35% = 12% of the cost of oil-powered electricity. As of now, it is crossing that threshold with no signs of slowing.

This is a key tipping point. A cusp. A transition.

Find some way to harness the cheapest possible solar, and you can undercut oil drilling, if you do it right.

Solar PV unblocks the land constraint.

Agriculture is solar powered, but its useful energy productivity per acre is about 1000x lower than solar PV. Food is much more expensive (~100x) per calorie than oil, but even so solar is about 100x more economically productive than agriculture.

If any nation on Earth can be self-sufficient with respect to food, it can be self-sufficient with respect to oil and gas with about 10% of the land. It doesn’t have to be arable, irrigated farm land either! Deserts, swamps, mountains, brown fields, rooftops, mountains, lakes, oceans all work just as well for solar.

Solar is intermittent, so work with intermittency.

Solar PV is the cheapest energy in history – during the day. Batteries can spread the load, but add unacceptably high costs for synthetic fuel.

So, we must adapt the synthesis process to work with intermittency – just like plants do.

Technical intermittency compatibility.

Most chemical processes do not like intermittency. Tough. Find ones that do. Build electrolyzers, DAC, and reactors that can cope with variable or zero power supply, in order to harvest the bounty of cheap solar. Internal combustion engines can throttle up and down in seconds, so it’s not forbidden by the laws of physics.

Architectural intermittency compatibility.

We must mercilessly reduce parasitic costs within the system. To achieve cost parity with fossil fuels, the Terraformer can’t afford to transport power, hydrogen, or CO2 from place to place. The Terraformer must be an integrated system localized with the solar array, displacing (and thus deleting) the expensive electrical inverter.

The biggest mistake a competent engineer will make is to optimize a part that should not exist. All those parts cost money. Delete them all. If you’re not adding deleted parts back in, you’re not deleting nearly enough.

Sunlight falls on the ground for free, heating dirt. The solar arrays sit on the ground and convert sunlight into electricity. The electrolyzer sits next to the solar array and consumes most of that electricity to make hydrogen. The reactor sits next to the electrolyzer to consume the hydrogen and make natural gas. The reactor sits next to the DAC to receive CO2.

All three subsystems form an integrated unit that converts commodity solar electricity to valuable natural gas, anywhere on Earth. It is an economic engine that performs an arbitrage over the physical form of energy and captures all the upside of the continuing decosting of solar PV panels.

The Terraformer minimizes the costs of moving power, hydrogen, and CO2 to convert solar energy into a high value, backwards compatible drop in, storable commodity (natural gas) in the array – a solar gas well that requires no drilling and no favorable geological structures.

Financial intermittency compatibility.

Solar arrays average 25% utilization, with less than 100% maximum sunlight for about 12 hours per day. To achieve comparable project economics, the Terraformer must have 4x lower capex. This would be impossible, except that solar is so cheap the Terraformer can afford to be a little less efficient.

Extremely cheap primary energy supply covers a lot of sins.

A discrete, modular, manufactured, scalable 1 MW electrical synthetic fuel plant.

Utility scale solar arrays standardize at 1 MW to minimize the economic cost of power transport from the array to the substation. 1 MW is also the natural size for a Terraformer. The smaller size helps us in multiple ways. It is easier and safer to build, test, finance, and iterate.

A smaller reactor is more nimble and easier to throttle.

A 1 MW Terraformer is the size of two shipping containers. It is movable by truck, skid mounted, and requires minimal in field construction or maintenance. It is mass produced in a factory by a trained workforce, enabling low cost and higher reliability.

Methanol is our approach to liquid fuels.

Natural gas provides roughly half of US hydrocarbon energy consumption, and is growing. It has substantially higher energy content and lower CO2 emissions than liquid fuels, as well as lower toxicity, albeit some handling issues relating to being a gas. Liquefied natural gas is an emerging fuel for high performance aviation, which is poised to become the greatest source of hydrocarbon demand as passenger hypersonics reach maturity.

Half of US hydrocarbon consumption is liquid petroleum, and our job will not be done until we can displace that too. Does this mean we need a small, throttleable Fischer-Tropsch reactor in the Terraformer? Not exactly.

The job of the Terraformer is to transform light energy into a low hassle, high energy density, transportable, storable fuel. After methane (CH4) the next most useful chemical is methanol (CH3OH), a liquid at room temperature.

So we’re starting work on our methanol reactor. It shares much commonality with the methane reactor, and works essentially the same way.

CO2 + 4 H2 -> CH4 + 2 H2O (methane)
CO2 + 3 H2 -> CH3OH + H2O (methanol)

After methanol is produced at dozens of Terraformers positioned inside their respective arrays, it is moved by narrow diameter pipe to a central gathering point, where it is stored in a tank. A methanol tank farm can store energy hundreds of times more cheaply than H2 storage or battery storage.

Once we have a large supply of methanol, it can be chemically converted into any desired chemical using tried and tested continuously operated large scale chemical synthesis. Dimethylether (DME), propane, ethylene, longer chain alkanols, even gasoline, diesel, kerosene/SAF/JP-8 using the MTG process. There are many ways to perform these synthesis steps, once the Terraformers provide a large, storable supply of low cost methane and methanol.

End to end demo.

Idea mazes are thought experiments. Nice in theory. Plenty of clever ideas crash upon the rocks of reality. Now try it in the real world and find out how good your internal model of the universe actually is.

So we did.

In March, we validated our intuitions by building our own capex-optimized electrolyzer, DAC, and Sabatier methanation reactor, connecting them together, and producing pipeline-grade synthetic natural gas.

As far as we know, this is the first ever pipeline-grade natural gas ever produced with a scalable architecture. Low capex, DAC CO2, cheap solar hydrogen.

The Terraformer is inside the tent of capitalism.

One thing, and only one thing, separates neat ideas which move the needle on climate and neat ideas that make no difference: Large scale adoption, catalyzed by transformative value generation in enormous markets. Tesla electric cars yes, hydrogen cars no. Solar photovoltaic power and wind turbines yes, nuclear cargo ships no.

To make a meaningful difference on energy and climate, solar synthetic fuels must be economically compelling to billions of people. All the clever technology in the world matters not a bit if production requires a premium, rather than delivering a dividend.

In this post, I’ve laid out how Terraform thinks about this problem and how we’ve positioned the Terraformer in design space to solve it. The Terraformer is designed to convert economically unproductive and neglected land into oil and gas wells, which is about the largest value upgrade imaginable. The Terraformer generates value for its owners and its customers. The Terraformer is driven into the market at scale by its ability to attract project capital with attractive returns.

Join us!

We’re hiring! We are always on the look out for exceptional engineers to join us on our ambitious project.