Casey Handmer is not intimidated by very large amounts. Billions of acres. Thousands of gigawatts of solar energy. One billion tons of carbon.
His startup, Terraform Industries, wants to operate on this ambitious scale. The company wants to convert hydrogen and atmospheric carbon into synthetic natural gas on a large scale. It’s more than a little baffling considering the startup is barely two years old, with less than 15 people on its payroll and about $11 million in funding. But if the company succeeds in its goal — to move a massive amount of carbon released into the atmosphere — it’s the only scale worth operating at.
Terraform Industries has developed a system that converts carbon dioxide (CO2) from the air and makes hydrogen from water, all using cheap solar energy. The system, called a Terraformer, then combines the hydrogen and CO2 in a chemical reactor to make natural gas. According to Handmer, the chemical reactor is already reaching 94% methane purity, meaning synthetic natural gas will become fully compatible with existing distribution pipelines.
Combining hydrogen and carbon to make synthetic fuel has been done before in several ways. Historically, such processes used coal as a carbon input – hardly a carbon neutral substance. More recently, projects such as Store&Go in Europe have achieved an atmospheric carbon-to-synthetic gas system, but Handmer said the group has failed to deliver positive economic results. Other initiatives have successfully generated ‘green methane’, as it is sometimes called, but have effectively ground to a halt due to the enormous energy requirements of such processes and the high upfront 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 inside a shipping container. The company is betting that the rapidly falling cost of solar energy, as well as market subsidies, will create a favorable unit economy compared to existing fossil fuel production. Soon, Handmer estimates, it will be cheaper to synthesize natural gas from solar energy rather than extracting it from the ground.
The company’s goal is better thought of as an “Earthshot” than a moonshot. “Terraform,” a word most commonly used in science fiction novels, describes a process of greening an alien planet – to make it suitable for life. That’s one way to understand Terraform Industries’ mission: to transform the Earth back into itself.
Handmer, who has a doctorate 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 single best chance we have [have] because I did something about climate change in my lifetime.”
“I might as well get on with living it up.”
The Terraformer is a simple machine. It consists of three subsystems: one that scrubs CO2 from the air by means of direct air collection; an electrolyzer that produces cheap hydrogen from water; and a chemical reactor, also called a methanation reactor, to make natural gas. All components are designed in-house and all three run on electricity generated from solar energy. 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 plastics, chemicals, fertilizers, paints or fuels.
“It’s completely replaceable,” Handmer explained. “It doesn’t require opportunities, modifications, new pipelines, new infrastructure.”
It’s not the system that’s complicated. In this case, that is the business plan. To displace a meaningful amount of CO2 extracting it from the atmosphere and producing enough natural gas to substantially replace the fossil fuels extracted from the ground, the company will need many, many, a lot of Terraformers.
How many? According to a recent white paper, the company estimates it will need 8,000 factories to scale production of its Terraformer machines to more than 1 million units per month by the next decade. But it doesn’t stop there. “Our civilization will require between 300 and 400 million machines, of which about 60 million are produced per year, which is comparable in numbers, mass and capital flows (though not in complexity, thankfully!) to the global automotive industry. says the white paper.
The process is also extremely energy-intensive – “The energy demand is astronomical,” the company writes in a blog post – so just building the Terraformers isn’t enough. It will also require an incredible build-out of solar power around the world. According to current estimates, Terraform believes that humanity will need to increase annual production of solar panels by about 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 much solar energy requires about 2 billion hectares of land.
“Eighty-ninety percent of the electricity generated on Earth goes to synthetic fuels,” Handmer said. “That’s pretty crazy. At the moment it sounds crazy, but it is possible.”
Terraform Industries does not intend to sell the natural gas, but the Terraformers. The majority of the company’s customers, Handmer expects, will be solar developers, who he says can commercialize the final product to natural gas buyers. The gas can be pumped directly into a pipeline or onto a truck. In part, Handmer is confident there will be ample solar capacity because of the Terraformer’s revenue-generating potential. Far from not enough solar capacity, he estimates that Terraformers will increase solar energy demand by about a factor of 10. Ultimately, the company wants to generate enough demand to mass-produce Terraformers — enough to build 50-100 gigatons of carbon capture capacity around the world. The idea of boosting solar capacity is to effectively turn the current system on its head: instead of burning hydrocarbons to make electricity, it uses electricity to make hydrocarbons.
It’s somewhat counterintuitive to fight climate change by producing hydrocarbons – and some climate activists find it absolutely anathema to suggest that humanity continues to chase hydrocarbons – but Handmer insists that CO2 has no ‘moral worth’.
“There is nothing inherently wrong with CO2,” he said. “Countries that emit a lot of CO2generally have a good quality of life, little poverty and good economic development. The problem is that the CO2 comes from carbon that was underground and is now in the atmosphere, and it’s a pretty slow process for life to take that carbon back out of the atmosphere and put it back underground. That imbalance causes climate change.”
The company’s “condition for success” is to reduce net fossil carbon flows by 10 times their current level. As the white paper says, “A decade or so of frantic large-scale work to supplant fossil carbon production forever.”
To date, the company has entered into agreements with California utilities SoCalGas and PG&E to sell synthetic gas in their distribution systems. The company says it has also been “approached by numerous other utilities as well as several companies in the oil and gas industry regarding potential pilot programs in the US and Europe.” As it continues prototyping and development, the company has raised approximately $11 million in a seed and seed expansion round 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 – very, very, very long way to go before its full vision is realized. Handmer is nothing if he isn’t determined.
“My background, I think like all startups, is the triumph of ignorance and hope over hard experience,” Handmer said. “Very, very few startups are started by people who really fully appreciate the magnitude of the difficulty, persistence, just keep trying to keep it going as required.”
The story has been updated to reflect that the company’s plans may eventually call for billions of acres of land.