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Google's research lab started a project a few years ago that it thought had the potential to slow the impact of man made climate change. It was going to make fuel from carbon dioxide harvested from seawater.

This fuel would still release carbon when it was burned, just like oil and gas. But because it was made from carbon taken from the atmosphere instead of taken from underground deposits, it wouldn't end up increasing the overall level of greenhouse

gases. Are world economy is fueled by Off you go and they have a lot of amazing properties that are hard to replicate and so we could make renewable fuels advance, especially the world civilization.

That's Kathy Hanun, who led the project which Google called Foghorn and the foghorn team actually did succeed in making fuel from seawater.

But Google pulled the plug on the project anyway in early 2016 because it was just too expensive. It didn't look like we would be able to hit a price point on a timeline that would justify the very large investment that would be required to bring that technology to market.

Scientists have known for decades that it's theoretically possible to suck carbon from air or water and turn it into all kinds of products. To date, a big problem with carbon removal efforts is that they've been too expensive to justify doing on a large scale on any practical basis three years after foghorn ended, other researchers think they're coming even closer to cracking

the code. One of them is a tiny company named Prometheus. It's not using the exact same technology that Google used for foghorn, but it does see itself picking up where Google left off. The company even counts the person who was the technical lead on foghorn as an advisor.

But for any of this to matter, these new companies air gonna have to act quickly. Here's Julio Friedman, on expert on carbon management at Columbia University.

If you're getting into this business because you want to help on climate, you're on the clock. We need to deepen the mission's very, very quickly. If it takes the 70 years to displace the incumbent, we lose like that. That's not good. A growing number of experts now believe that carbon capture technology is a necessary part of any plan to confront climate change. Problem is moving it out of the laboratory and up to the kind of scale that could make a difference at a planetary level and doing it fast enough to avoid potentially disastrous effects of climate change. It's a daunting prospect, but there's never been more support from private investors and policymakers. Maybe this is the rare case where the biggest business opportunity is also a chance to save the world. I'm Pierre, God carry

on. I'm Joshua Burstyn. You're listening to decrypted. If you want to know what's hot in a tech start up world, there may not be a better place to look than why Combinator Demo Day. Twice a year, several dozen handpicks startups give two minute pitches to a roomful of investors, media types and industry insiders.

It's a big deal. Why, see, is a Tech investment firm that's famous for its role launching companies like Airbnb, Drop Box and read it. Every founder that takes the stage oozes with optimism that they're about to hit it big.

No one in this market, because no one No one Okay. In recent years, Y. C has also begun testing out its own sweeping social projects. In 2016 it said it was gonna begin experimenting with the concept of paying people a universal basic income that year. It also said it was gonna build a city from the ground up. Y C side projects serve as a barometer of the big questions that Silicon Valley is fixated on at any one moment in time.

And this year, Y C said it was specifically seeking pictures from startups working to remove carbon from the atmosphere. It was overwhelmed with responses. 60 startups applied to the program. It accepted just two of them, and one of those was Prometheus.

The company was started by a guy named Rob McGinnis, A demo day. Rob took the stage and told the audience that he had built a machine that could make gasoline from thin air and that it could do it at a profit.

This was an idea with the potential to be the underpinning of a huge business and a real force in the fight against climate change. It was also pretty audacious coming from such a small company.

After Demo Day, I visited Robin, his co working space about two hours south of San Francisco before company started building our first protection. You think it's really just you at this point, you haven't helped. So it's like people have been working as if they're gonna have jobs. And now they are. Rob's machine is a six foot tall box, three feet on each side. It's the size of a real big refrigerator. So you know, I have this open. Have you looked at it since it came back from San Francisco? Haven't really. This is the first unveiling. Everything is still here in the racks. That's good.

Okay, um, we'll have to go through and make sure nothing. Is this your only one at the moment? Yeah, this is so we were really nervous loading and unloading it, you know, But it was important to have it there for people to be ableto see what we're talking about. share. So these air power supplies. So he opens it up, and I can see that there's a cooling unit on the top and a little screen that shows a video feed from what's going on inside the machine. That's just bubbles coming out of water, and there's some piping and some wires, and then at the bottom, there's a little stick it where the gas can come out.

Rob asked me not to take pictures we don't want people to see. Kind of exactly are piping and expectation design because, you know, eventually people will compete doing things that may be similar, and we don't want to give anybody. You know, Theo clever thing about Rob's machine is that it ends up at exactly the same place that traditional gas companies end up. It just starts somewhere different. Traditionally, the process of making gas starts with drilling something out of the ground. You refine it, you put it in your car and you burn it. This releases carbon into the atmosphere,

and that's the problem. More fossil fuels, we burn more. The carbon builds up in our atmosphere, and that's ultimately contributing to climate change.

But if you can use the carbon that's already in the air to make your gasoline. Your carbon footprint can theoretically be zero. You just create a circular process that recycles the same carbon over and over. And that's what Rob's trying to dio. What's cool about this is it's reverse combustion, right? So when you burn fuel, you make water, carbon dioxide and energy suicide work hopefully, and those three things could be combined back into into gasoline, but the by practice oxygen. So this thing is like a little mechanical forest,

just like trees. Rob's machine would remove carbon dioxide from the air.

Of course, there are some caveats. The process requires a significant amount of energy. If that energy doesn't come from renewable sources like wind or solar energy, you'll just end up burning carbon to make your carbon neutral fuel. And that defeats the whole

purpose. It can also be really expensive.

I contacted Matt Iseman, who was the technical lead on foghorn for Google. He's advising Robin. I was interested in what he had to say about Prometheus, Matt said. People regularly approach him with ideas for carbon removal companies seeking his endorsement or his advice. Prometheus stood out to Matt because of advances Rob had made in material sciences. These would allow him to turn carbon into fuel in liquid stage. Before then, people have been heating it up in doing this in gaseous form. This would mean that Prometheus can conduct its process at a lower temperature that requires less power, and that makes everything cheaper. Rob's machines can also be small enough to be portable so he could physically move them around based on where the powers cheapest at any time.

In the weeks after Demo Day, Rob said he was able to raise all the money he was after and that he'd use it to hire a few employees and moved the project onto the next phase. But he didn't want to say how much he had raised or from whom.

Prometheus is entering a growing carbon capture industry. There's a number of stages that company's heir focused on their the companies that want to perfect the process of sucking the carbon out of the air that soon as direct air, carbon capture, climb works, global thermostat and carbon engineering have all been working on that project for years, Then their companies, like Opus 12 who want to use the technology to make not only fuel but other industrial chemicals like carbon monoxide. And then there's another set of businesses that want to use repurpose carbon to build alternatives to concrete and other construction materials.

Meanwhile, Rob wants to go after another huge market, which is the gasoline market, and he believes that it will be possible for him to start producing gasoline at profitable rates within a year. He's told us about $3 a gallon

at first, of course. For now, he's just asking us to take his word for it. We've been building it, um, both this prototype system and also the economic model that we're basing our assumptions on during that time. And have you actually produced any gasoline during that period? No, no. We just finished the machine on Friday. But there's no question it will make fuel because everything in it has already been used to do what it's done before. So there's no there's no no new part in this system. It's really just things that have been done before. Independently. Okay, investing can be confusing,

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What most climate scientists agree on is that the planet needs more carbon capture. Last fall, the UN's Intergovernmental Panel on Climate Change said carbon removal would be a necessary part of the response to the problem. Estimates of how much carbon we need to be removing from the atmosphere every year are in the range of 10 giga tonnes. That's 10 billion tons of carbon, or about 1/4 of the current annual level of global co two emissions.

That means companies like Rob's have to start having some real successes and real soon. But not everyone involved in carbon removal is necessarily building new machines. Absolutely thanks for having me the same week I met Rob, I also met with Diego Sized Gil, the founder of Pajama. That's the other carbon removal company that got into icy Diego didn't have a machine to show me. His company makes software that's meant to improve carbon offset markets.

These air transactions in which someone, usually a business that releases a lot of carbon into the atmosphere, would pay someone else to remove or prevent the release of a similar amount of carbon. So the software Diego is writing might one day allow people to pay Prometheus, for example, for the greenhouse gases that it eliminates.

Remember how Rob had described his machine is a kind of mechanical forest, the carbon removal technology that most interest Diego, our actual forests. We need energy big breakthroughs to we need to reduce emissions and transition to a low carbon energy matrix. All those efforts need to be explored. Um, you know, we're just starting with what we think is the easiest and cheapest, this more plant, more trees, you know, Diego told me he spent his whole career and technology up to this point, doing things that he looks back and feels are kind of inconsequential. So much of the tech industry has been focused on making life convenient around the edges, helping us or tacos from our phones or whatever, and Diego thinks that this is his chance to do something bigger than that. But he also knows that if a real carbon economy emerges,

there's gonna be a lot of money to be made as a middleman. I I strongly believe that is amazing economic opportunity as well, right? It might be the economic opportunity, the 21st century,

to fix climate change. Of course, a lot has to happen for those economics to pan out. Most businesses won't start paying for the carbon they're emitting until there's a law saying they have to. Diego's business really depends on governments taking action in order to work. This

runs counter to a lot of what you've heard from the tech industry in recent years. It says that government regulation is often an impediment. Innovation, not its spark, and betting on politicians is always

risky. But that's not even the only big question hanging over this industry. There's something a little strange about just letting the biggest climate offenders buy their way out of the problem. And with all of these carbon capture technologies on one hand, it's good because we can keep doing things the way we always have without adding to the emissions that are already in the atmosphere. But critics would say, ultimately, we have to develop technologies that don't create emissions at

all, right? So this is the view that carbon removal technology Zahra fantasy that allow us to count on some easy way out to emerge so that we don't have to make the tough decisions that we'd have to make otherwise. It's definitely been a part of the discussion around them. I asked Julio Friedman about this. He's the Columbia professor we heard from at the top of the episode. Julio has studied carbon management for nearly two decades, and these arguments about moral hazards really don't hold water with him, he says. It's unclear what kind of technologies you're gonna work, and so we should really be trying everything. The more technologies we try, the greater the chances we have of finding something that works because so many of these ideas are doomed to fail, often for reasons we don't quite understand yet. And history's proven repeatedly that finding something that's better than fossil fuel is gonna be really, really

hard. So there are many companies that have broken their spears on. There are many companies that were like, We're gonna make something that's going to compete with gasoline and their debt. You know, Josh, one of the things that has kind of intrigued me most is the fact that despite this incredibly urgent need for the technology, the market is still in such early phases.

Yeah, I think when you start looking at any new project, it's, ah, Discovery. And you think while we're just starting down this road and it's exciting. But one of the first things I found out was that the main director, carbon capturing companies, have been around for years. They're just still very early, and I think that's a reminder of how difficult the technological problems are here. I mean, Google gave up. There is a riel question about Can you do this in a way that makes any economic sense? And even if you do that, then the scale up has to be so rapid and so big. That is a really daunting problem in of itself,

and that's a technological and sort of economic problem. I think one interesting example of kind of where we are with this industry right now is one of the other applications that companies have focused on and that selling bubbles to beverage makers they need to buy carbon. And so director carbon capture companies have been trying to strike deals with these bottling companies to say, Hey, we'll sell your bubbles. We can do it at close to a reasonable price right now for this application and then they can start learning about how maybe they get to some of these broader applications.

And that's one of the things that's noticeable about Rob's company is that he's actually going after a much bigger, more established market, which is the gasoline market?

Yeah, absolutely. Rob is a very convincing proponent of this idea. Obviously you have to be, he says. Look, if I could make gasoline that's the same as the gasoline that goes into your car, then there's already pipes to move that gasoline. I don't have to convince people to buy that gasoline because there's a commodity market I can just sell into it and will be there as fast as I could grow

at the same time. His main competition is gonna be the big oil companies. And that that's pretty daunting. Competition.

Yeah, absolutely. I asked him about that as well. Obviously, he said he hopes to work with them at some point. When I brought this up with Julio, he said that he thought these startups a logical end point for them would be to figure out the technology and then be acquired by the large gas companies or oil companies because you're gonna need such a massive amount of infrastructure investment to get these things going. And they just have so many resources at their disposal that they might be willing to do it. And Rob, actually, you had a number for how much he thought it would cost to build out his sort of director carbon capture gas for the United States market. And I was $800 billion.

Okay, so let's imagine that you know, whether by acquisition by an oil company or through tech investment, Rob's company, Prometheus, is able to kind of succeed and scale up. Do you foresee at that point, unintended consequences down the road?

There must be I mean, it always happens. If something gets to a global scale, there's going to be negative consequences that you haven't thought of beforehand. I think some of them are kind of obvious already. If you started having fuel made this way at such a large scale, that would require a massive amount of energy. In some ways, it's just converting solar and wind energy into gasoline if you think about it and that's going to distort those markets or at least impact those markets. Another thing that might happen is just the amount of land that some of this would require has been something that's been brought up. If you need to build wind farms, you know, from Horizon to Horizon, it's gonna be a problem. And then also with anything that gets to this scale, big problems, air, you know yet to be determined.

And that's it for this week's episode of Decrypted. Thanks for listening.

If you're involved with Carbon Capture technologies, I'd love to hear from you. You can write to us and decrypted at Bloomberg dot net, or I'm on Twitter at Joshua

Burst in and I'm at P. I got Carrie, and please help us spread the word about our show by leaving us a rating or a review wherever you like to listen to podcasts.

This episode was produced by Pia Got Carrie and Lindsay crowd. Well, our story editor was an Vandermade. Thank you. Also to Akihito, Emily Buso and bradstone. Francesca Levi is the head of Bloomberg Podcasts. We'll see you next week.