Dan Friedmann is the CEO of Carbon Engineering. The company is at the frontier of a new industry, direct air capture. They just broke ground on a big plant in Texas that will pull carbon dioxide out of the air.
Dan’s problem is this: how do you bring the price of direct air capture way down? And how do you convince companies and governments to pay for scrubbing carbon out of the air?
Pushkin. The other day I spoke with Dan Friedman. He's the CEO of a company called Carbon Engineering. Maybe we could start with what's happening out in Texas, Like, there's actually somebody's building something big in Texas and you're mixed up with it in a good way, right, tell me what's happening in Texas.
Yes, and in Texas happened big. That's the good part about Texas. Yeah. We are building well. Our partner is building our first commercial scale plant. Just broke ground about a couple of weeks ago, and all the big pieces of equipment are under order, which is, you know, quite substantial. We got all our permits, took about a year, and the road's been put in place. It's just a big bunch of desert with some shrubs. And yeah, construction has started.
Construction has started on a billion dollar project that will be by far the biggest plant ever built to suck carbon dioxide directly out of the atmosphere. I'm Jacob Goldstein, and this is what's your problem. Carbon engineering is at the frontier of an infant industry called direct air capture, as in directly capturing carbon dioxide from the air. Direct air capture won't be able to solve climate change on its own. There's no way we could capture anywhere near enough carbon to do that, but it might help at the margin, pulling hundreds of millions of tons of carbon out of the atmosphere every year to buy us some time as industry is decarbonized over the next few decades. To get there, the direct air capture industry needs to solve a bunch of problems, including how to bring the price of direct air capture way down, and also how to convince companies and governments to pay for sucking carbon out of the air. I talked about both of those problems with Dan, but to start, we talked about what exactly he's building out in the Texas Desert. Let's say it's two years from now and you and I drive out to this spot in the middle of Texas and you've just turned it on, the thing is working. What's actually going to be happened? Well, first of all, we get there, what do we see. What's it look like?
Okay, so you know, when when you build any direct air capture facility, you've got to process a lot of air. So the main thing you see in all of them is what's what we call an air contactor, which is a fancy name for a huge box with a huge fan that's drawing air through the contents of the box.
So it's a giant box fan like the one I have in my living room, but way bigger.
How big A couple of stories with stories, okay, so you know it looks like it looks like a small a small apartment. You know, I've quite a small apartment, but it's still like couple of stories, and you know the width of a narrow house.
Okay.
The fan is right on the roof of it. Okay, So the fan turns on and air is drawn in from the sides and goes up the top. So you would see about seventy of those in two years when this is done, lined up in rows.
So danisying, there would be seventy of these apartment sized fan buildings, like a little subdivision out there in the desert. The fans suck in the air and then they have this liquid that binds to the carbon dioxide. And one of the things I'd heard Dan talk about in other interviews is that the chemistry this part of removing carbon from the air is actually pretty straightforward. But what's hard is removing it efficiently because of how little carbon dioxide is in the air, Like carbon dioxide is way less than one percent of the atmosphere.
It's very, very tiny, and that's what makes it so hard because you you have to touch so much air to get at the little tiny you know, mining a tiny bit amount from the air. And traditionally, you know, people have been extracting carbon dioxide from the air for a long time. If you recall the Apollo thirteen movie, they were suffocating from breeding their own carbon dioxide, and in a couple of hours they built that.
And just to be clear, that's the Houston We've got a problem. Yes, their problem was that there was too much carbon dioxide in their in their space capsule.
Yeah, their director capture machine in there. The little one wasn't working, so they were suffocating in their own so they built one and they scrabbed it out. So the hard part, and that's what's unique about what we're doing. The hard part is to pull a million tons of carbon dioxide out of the air. So it's all about how much we have to do. It's not about doing it. The doing it is not that hard, but doing a lot of it is incredibly challenging.
So it's a scaling problem.
It's coming up with a process that will scale and that want use so much energy and materials that it becomes useless. Right, so we need to be net negative, not net positive. So the challenge is, you know, is how much power do you use doing this? And how much steel do you use to build these air contacts and so on, and how do you scale that smartly? So in the end you are net negative, which is what the business is all about.
How long do you have to run the plant do you estimate before it will capture all of the carbon that was emitted to build the plant and to build all of the materials in the plant.
I don't have that figure, but it's because it depends who the final contractors are and their footprints and so on. It's similar to electric cars. It's not significance a few months and their I year for sure.
So Okay, you get the plant up and running, you're sucking carbon dioxi out of the air. So far, so good. But now you've got tons of carbon dioxide and you have to do something with it, right.
Yeah, you know, that's that's the hard part that it alver forget. What we do is we hand it to the world's expert on how to deal with carbon dioxide. Occidental our partner who has you know, been burying carbon dioxide for a lot of years to.
Be clear, that's Occidental Petroleum, the big oil company.
Yes. Yeah, they are the companies that understand how to handle carbon dioxide. So what they do is they bury that carbon dioxide safely underground according to the US government regulations, so that it's permanently stored, meaning that it's scanteed for at least one hundred years to be underground.
So Occidental is they're an investor in carbon engineering. They're on the board, right, and they're they're the ones building this biggest in the world by far, direct air capture plants, right, They're the one paying for it.
Yes?
Is that is that?
Yes?
Yeah? Well why is why is Occidental Petroleum doing this? Where are they paying all this? And they're the ones spending a billion dollars to do it? Right?
They were trying to figure out how to become net zero meaning net zero in their own production, net zero in everything they subcontract and buy, and net zero, and what the customers like you and I would burn so all the emissions, and they decided to use this to decarbonize themselves. And then they said, whoa, we can offer this as a solution for other people that don't know how to do this, for them to decarbonize like airlines. It was a period took a period of years to develop to the point where it is now. And so they went from being a partner to being a customer to also being a part owner and then to being a deployment partner of all this thing. And they're trying to make this their next business after oil is done, basically.
Basically selling carbon removal as a service. Let me ask you a question. You said in there that Occidental wants to be net zero? Why do they want to be net zero? And like in particular, given that you know, they have an obligation to their shareholders to maximize profits, Like why are they spending a billion dollars to the extent it's for them to be net zero? Like why is that a sensible thing for them to do?
You know that kind of gets the heart of this whole problem. You know, it's not just Occidental. Microsoft wants to be in net zero. Amazon wants to be in net zero. Air travel wants to be net zero. Most of ninety odd percent of the world GDP has set a target to be net zero. So I think everybody's realizing Occidental included that in order to survive in the long term, we need to get to net zero. So at some point, I think society is going to say, well, if you're not net zero, you're not in business.
So the sort of the financial case for getting to net zero is the assumption that policy governments will basically force companies to be net zero, like that's the or customers or customers right right, they will say we will only do business with a net zero support.
You know. I think it goes deeper in terms of their management team that they're just committed to kind of lead the whole oil sector to get there, just recognizing that this has to happen. And in the end it's good for shareholders because if you keep your head in the sand, then eventually people don't buy from you one way or another.
Yeah, I mean, I will say, given the history of oil companies behavior with respect to climate change, I'm wary of their involvement at some level, like just based on the fact that they knew that emissions were driving climate change, and they obfuscated that fact. Not occidental specifically, but that was clearly a widespread practice in the industry, and so it makes me some what weary of their involvement.
Now, yeah, you know, I can't comment on that. All I can tell you is that when you scour the planet to find somebody that can deal with a megaton a year coming out of one plant, and then a thousand megatons a year coming out of one thousand plants, only the oil companies can do that, for better or worse.
Huh you mean in terms of how do you stick it back in the ground. Yeah, you're the only ones who know at vast scale, how do stick carbon dioxide back in the ground.
Yeah, and understand the underground. They've been mapping the underground for fifty years. They understand. Any country you go to, the oil companies the only people that understand what's under there, how to operate under there, how to keep it under there and not have it leak out. If you want to do this at scale, you've got to go to the world's experts, and the world experts that have been looking at what goes underground with the geology. Because of the oil business. Are the oil companies, there's nobody else.
Yeah, No, it is interesting the way this is, you're basically running the oil business in revert.
Right.
For one hundred plus years, they have been digging hydrocarbons out of the ground, and then we've been burning them, and they've been going the carbon dioxide's been going into the atmosphere, and now it's like, okay, let's just it's like on the It's like on my power drill at home. You know, you push the button one way and it drills in, and then you push it the other way and it drills out.
Right, like exactly, it we got to I think the saying goes, we got to put it back where it came from. Yeah, and you know, anything else is mucking around with this natural system and I don't know what the output of that would be, but this is pretty straightforward. We just put it back, bring the carbon back down, and everything should return to normal.
Let me ask you one more thing, just on the oil company thing, and then we'll leave it. There's basically a concern that direct their capture will act as a fig leaf to allow for even more emissions, right, and it will slow the energy transition that we need. Do you buy that?
No? You know, whoever says that just hasn't done the mass. Yeah, this is not going to be an excuse for not doing anything else. We already know from very well done studies that there's only so much we can do to avoid emissions. In the end, you're left with depends who you talk to, you're left with somewhere between ten and twenty percentage you just cannot avoid. And that's where direct their capture comes in. It's the last bit of garbage that you can't recycle, you can't do anything about it, and you've got to take it out. And that problem alone is an immense challenge to think that we could do ten times that and have everybody go one in life. People just haven't done the math. It's just just not possible. And then the other key thing is that if we stop today and don't emit another carbon molecule into the air, we've already emitted enough that we're going to crash through one point five at some point.
One point five degrees of warming one.
Point five degrees because it's cumulative, and we've, like you just said, we just spent the last hundred years burning oil and coal, So you know, at some point beyond twenty fifty, we want to bring stuff back down.
In other words, we don't just need to stop emitting carbon dioxide into the atmosphere. We need to reduce the amount of carbon dioxide that is already out there in the atmosphere. In a minute, the big problem with direct air captured, where's the money going to come from. That's the end of the ads. Now we're going back to the show. Last year, Congress passed and the President signed into law the Inflation Reduction Act, an act that confusingly did not do much to reduce inflation, but did do a lot for direct air capture. Specifically, it said that the federal government will use tax credits to basically pay companies to suck carbon dioxide out of the atmosphere.
If we prove to them that we have captured a ton of CO two from the air and we've buried it up to their requirements, they write your check for one hundred and eighty dollars.
And one hundred and eighty dollars per ton.
Per ton, so it's one hundred and eighty million per million tons.
And how much this this big plant that you and accidental are building in Texas. How much does that pull out of the air per year?
The first plant half a million tons, so that'd be like ninety million a year from the US government. And you know, the plant would not have happened without the IRA. This wouldn't have taken off in any kind of speed without the IRA. You just couldn't do it without something like that.
So, if one hundred and eighty dollars per ton is the carrot is, what is the cost to you per ton on your plant?
That is confidential, but it's significantly over that today it's more.
Yeah, And so to be a real viable business, there needs to be some combination of getting more than one hundred and eighty dollars a ton and or bringing your costs down a lot.
Yeah, but you've put your finger on it. We need to bring the cost of production down over time by improving the technology and making it more and more efficient. And that's really the job of carbon engineering. That's what we do for a living.
Can you give me a specific example of some detail, some part of the process, either that you have made cheaper or solved.
Yeah. I think the easiest example, and the one we've worked the most done, is Hey, let's get those seventy things down.
To fifty seventy units.
Yeah, there's seventy units. Let's make the way the whole thing is configured, and the way the fan runs and so on, and the way we place it to the prevailing wind. Let's make that more efficient. So the next plant has fifty not seventy. You save yourself a pile of steel, You save yourself a pidle of sorbent, you use less electricity, it becomes more efficient.
I mean, that's a way of saying, let's pull out more carbon with every thing, right, with every spin of the fan. Let's get more carbon right out of the atmosphere. And is there an example of how you have done that already? I mean, presumably that is the endless quest for improved deficiency. Is there just one little example you can give of a way you have improved efficiency so far.
So inside what we call the air contact or where the air is flowing through. In our case, the reaction is from a very thin film. That film is exposed to the air and react to the carbon. So if we can pack a honeycomb structure in it, we got more surface that the air is going through.
Wait, is that one. Is that one you've done already?
Yes?
Have you already turned it into.
A honey yes, well not a honeycomb, but yeah. We have been improving what we call the fill of the air contact or what's inside it for many years, and then in the last year before we went to final production, we made our own custom filled what we call the CE one, and it was twenty percent better. And we're now working on the second fill, not going into the deck the director capture plan we just talked about, but we'll go into the next one and that might be another twenty percent and we might be down to fifty five fifty six air contact us once we do that.
What else should we talk about?
So you know, we know we have to do this, and right now our partner is selling these credits. They're available, we can go buy them today. But it's not really happening. I mean, there's a few sales going on, but it's not really happening. And if it was really happening, we'd probably be building four plants, not one plant. And that's the real challenge that bothers me. How do we make this happen. We all know we have to do it, but if you and I do it, and nobody else does it. We just spend a lot of money and accomplish nothing. We need everybody to do it at the same time kind of thing.
But it's a weird product, right, Like you're selling you're selling a thing that is like the absence of a thing globally, right, Like you're selling a weird product. Nobody in the absence of policy, really well, nobody in the absence of policy or very different customer demand than we're seeing now has to buy your product, like nobody, nobody, nobody, And so people aren't going to do it out of the goodness of their hearts, right, Like they're just not gonna They're not even gonna do it for marketing at any meaningful scale. So like, I have to think the only way it's gonna work is with way stronger policy levers, be they carratter sticks.
Yeah, that's the key thing. We need to make this happen at the scale we need it.
Yeah, what really has to happen for it to work at scale? Like, what is the policy you need for this industry to actually be a thing?
You know where the US is once again taking the lead is the governments are one of the largest polluters in the world pickarly. About thirty percent of the carbon dioxid problem in a country comes from the government operations, the military in particular. So the US is pushing policy right now compelling government to clean up after itself and buy so to the extent that governments begin to buy, that would be amazing. So there are many different ways in which we can do this. You know, we already cleaned up our garbage used to flow down the streets and cause plagues. We then cleaned up our rivers, and now we've got to clean up the air.
Yeah, it's interesting thinking of this like a basic hygiene problem, right, like water quality. Water quality is an amazing one. Right, If you go back one hundred and fifty years, the advent of modern sewage systems essentially was like one of the great public health breakthroughs in the history of the world. Really, and thinking of this in those terms is interesting.
Right.
There was a sort of collective action problem. It was a kind of early government doing something other than fighting wars. Like this reminds me a little bit of that when you put it that way, right, this is like a global version of sewage collection. Yes, with similar things.
The hard part about this one is you know, when when the sewer is running down the street or the river, I can see it's in my backyard, and unfortunate climate is not in my backyard, or is in everybody's backyard. Yeah, so it's harder, but you.
Know, yeah, there's a collective action problem here, right, Like London cleans up as sewage, London is better off, right, But if London is the only one taking carbon out of the atmosphere, nobody's going to be better off.
That's it.
It makes it a much harder problem.
But that's it. Just you know, when when we first cleaned up the sewers, it was really your neighborhood. When we cleaned up the rivers, it was quite a big neighborhood. And now it's the whole planet. We got to expand to the whole planet. Yeah.
Yeah, we'll be back in a minute with the lighting around. Now, let's get back to the show. Okay, we're going to do a lightning round.
Now.
It's going to be way more all over the place than the rest of the interview, but it's gonna be fun.
Okay, Is it correct.
That you got a patent in nineteen eighty three for an electric field detector.
Oh myself, Yes, I did. Yes.
Was there anything you learned inventing that electric field detector in the process of inventing it or patenting it or whatever that was helpful to you when you went to work in industry.
Oh? Absolutely. You know, when you're sitting in engineering school, you think the problem is solving the technical problem. When you invent something, you realize the problem is getting it to market.
Huh, same problem you have now, same problem you have.
Now.
What's one thing I should do if I go to Chile where you grew up.
Oh, go skiing. I'm a skier.
Huh. If I want to go skiing in August, that's the place to go.
I should go to chill That's the best place to go.
That's one thing I should do if I go to British Columbia, where you live and work.
Now, oh, you should also come skiing here. I'm a boring guy, you know, this is paradise.
If I want to ski in January, I go to BC. If I want to ski in August, I'll go to Chula.
That's right.
When you were the CEO of an aerospace company, you started writing books on the side and not like typical CEO type books, right, tell me about those books.
You know, I studied physics engineering fixes in school, and when we worked with NASA for years. One of the other things we did with we also built the robotic arm on.
The Shuttle on the Space Shuttle.
The Space shuttle on the Space Shuttle, so we built a robotic arm called the Canada Arm. One was on the Shuttle, the Shuttle arm that was instrumental in fixing the Hubble telescope. So I interacted directly with a Hubble team and kind of kept track of all the advances in cosmology. And I came to the realization that after having left school thirty odd years, we still had a lot of questions to answer. And I had seen some allusion to those questions in the Jewish literature related to my religion, and you know, when I had a bit of time, I went to work on whether one could draw us something from each tide to get to a better answer of what all the stuff looks like. So didn't intend to do much, accept a little bit of research, and I talked to a few people and they said, well, you should really write this up. And about four or five six books later, still doing that, but taking a pause in the last.
Year, and I mean the basic theme is reconciling the Old Testament of the Bible with modern cosmology. Is that the basic project.
Yeah, in the sense that we're both looking at the same world, so we need to be we need to be describing it the same because we know it's real out there. And if we do that, then we can go peel back to how how each of those bodies or knowledge gets to that answer and see if we can learn about how it all came came to happen and put those things together.
If everything goes well, going back to carbon engineering, if everything goes well, what's a problem you'll be trying to solve in say five years.
How to build dozens of plants a month, or not build them in a month, but have them come out of the production line. Yeah, so start a dozen and finish a dozen two years later, and then the next month another doesn't and finish a dozen.
In that universe. Direct air capture is becoming a massive industry. It's these giant industrial direct air capture plants are springing up every month, every week all around the world. That's what you're hoping for, and you're hoping that will happen in five years, Like is that possible? Like that seems like a lot from one.
Yeah, it will look it will look like a bit like a solar farms do. Right. Yeah, they're springing out everywhere, all the solar panels. So just have little bigger buildings with on top and capturing carbon problem in the same places because we need the solar power to power them and so on. Right, But it's exactly what it will look like, and we will have to have them springing up everywhere to clean this carbon problem out.
Dan Friedman is the CEO of Carbon Engineering. Today's show was produced by Edith Russello. It was edited by Sarah Nix and Robert Smith and engineered by Amanda k Wong. I'm Jacob Goldstein. You can find me on Twitter at Jacob Goldstein, or you can email us at problem at Cushkin dot FM. We'll be back next week with another episode of What's Your Problem.