Oil and Gas Startups Podcast

0:00 What's going on, y'all? Welcome back to the show today. I'm here with Bridget Silva with geothermal holdings, talking about something a little bit different than what we're used to. Yeah. We're

0:09 talking subsurface still. We love subsurface. We love all the subsurface resources. It's exciting. I think you're in a really, really exciting space. So you've been in the geothermal space for

0:19 quite a few years now. I think a lot of things have evolved over the last few years.

0:26 I may not be completely up to date on everything that's happening in the space And so we want to kind of treat today for what you guys are doing. But also just kind of like macro, what is happening

0:36 kind of in the geothermal space. You know, there's, there's different kinds of technologies. You give me some, some little cheater notes here, a lot of acronyms that I don't know the stand for.

0:45 So first off, let's go through who are you? What do you do? And we're going to your best rate and we'll kind of just roll right into it. Yeah, that sounds good. So Bridget Silva, and I've been

0:56 in geothermal, like you said, for a few years now. which is kind of like a lifetime in some of this neurogeothermal technology. It's accelerating very quickly. I have spent a couple decades in

1:09 energy technology innovation and commercialization. So I'm very excited about these new energies that are coming out. I've worked on projects that span from transformation of the grid. Like when

1:20 smart grid wasn't cool yet. We're working on that, setting the data management systems all the way through when cybersecurity and NIST and the infrastructure issues became a big deal, worked on

1:31 that transformation. So this is the natural entree into the next generation of where we take really, truly profound energy technologies that have existed for a long, long time and do something new

1:42 with it. I loved geothermal taxes because it's home. And so I'm gonna talk about that a little bit today. I wanted to go ahead and throw in a shameless plug for geothermal taxes. But when we think

1:54 about where I am now, We are an international company, so geothermal. holdings, geothermal titans is our domestic arm. My role there is as the Chief Business Development Officers. So we

2:07 understand the very importance of commercialization of this technology. Economics have to work in order for this technology and this energy resource to really be pronounced. And so we put a lot of

2:19 focus around that business development arm. And I look strategically after that business I've been working in the business development space around all of the different ecosystem stakeholders,

2:32 including policy, customers, land owners, you know, off takers,

2:41 regional monopolies, like electric utilities. There are a lot of stakeholders in this space and I'm really happy to be there making connections and trying to bridge the gap between the technical

2:52 world and the commercial world of geothermal. So let's dive deeper into your background. So you know you've been in energy technology and a variety of flavors for kind of quite some time. Walk us

3:03 through that journey. Sure, so I actually started my career in technology on the back office side. So I think computer systems at Dell. My first professional role out of college was at Dell

3:15 Computer Corporation. We actually called it Dell Marketing back when, dude, you're getting a Dell was a cool thing to say. So that kind of ages - It's funny, two people here. So Kevin Rowe,

3:26 who's with us, went to Dell back in the day. I don't know if it was in the same time. And that's sort of Kurt Coburn. That's cool. Yeah, I mean, it was just the hottest place to work. In Round

3:36 Rock, Texas and close to Austin. So started there just learning the technology and helping people buy their individual technology when that was just becoming more prominent when the internet was

3:50 really just taking off. So that kind of, again, dates me. I became very interested in how that stack works. So going beyond computers into software and then looking at how the software really

4:01 requires a lot of data sources, then starting to look at the data and figuring out, oh, wow, if we apply this in industry in new ways, then we really could accelerate our competitive situation as

4:15 not only at Dell as a company but also as a country, we can become more competitive. And then that technology innovation curve just gets better and better And that's actually what drove me into the

4:25 smart grid world. I shifted over, I moved to Houston and shifted over to HP and got to work very closely with inventors out of Palo Alto. And there was a young inventor that invented something

4:39 called the Memristor, which was a tiny sensor, a nano sensor that could actually hold a memory. So you could take 16 attributes and cross correlate those attributes to basically determine what's

4:52 going on setting. And specifically, the setting we were interested in was the grid. We wanted to be able to figure out was their temperature, was their pressure, was their vibration, was their

5:03 chemical like salt, for example, what's going on at the grid? Because then you could detect a fault. And if you could detect a fault and send that back to a data center, you have a real time

5:13 ability to understand where the faults are on the grid. That's important when you have things like hurricanes occur, and you have millions of miles of wires and holes, and you're not really sure

5:23 where things are down, you can accelerate turning power back on for industry, for communities, societies, etc. So I worked on that project here in Texas for for quite some time. We looked at

5:34 things like transfer workloads and seeing how do we build the back office for that. We looked at real time demand response and what the data requirements would be for that. And that was very

5:45 exciting. And it kind of left me into the next thing well if we're going to have. this sort of data management happening on the grid, we're also going to need to address any sort of critical

5:56 infrastructure threats, like nation states trying to hack into our grid. We looked at things like micro-grids to isolate, but we also looked at all of the infrastructure in operations technology

6:07 across oil and gas fields and other types of data centers, other types of critical infrastructure. And I did that work at Lockheed Martin. I actually evolved into Lockheed Martin working for

6:20 national security on the private side. So publicly traded companies, but ones that are really targets our nation states. And that led me to really more of the, okay, now if we can improve that,

6:33 the next transformation that hit at that point was really diving into North American shale and the horizontal technologies, that the unconventional technologies that really kind of played a role in

6:44 now how do we hit the economic cycles around producing more gas, and so I joined. a company called RS Energy Group, who most of you probably are familiar with and worked there for a few years as we

6:57 grew and sold that company to in various formerly drilling info. But really, our spirit there was around how do we get all of this data that's already coming out of these logs and wells, on

7:10 production data, the service provider data, how do we cross correlate that to figure out, get in front of the drill bit to figure out what sort of production we could get, what sort of valuation

7:22 could we give these land assets. And so that was obviously very, very fun. And from the relationships I made there, I just kind of got pulled into the geothermal arm after we sold. So that kind

7:36 of completes the journey to date and really have been very excited to be here. For the past three years, I've worked on things like Texas policy with Texas Geothermal Energy Alliance, federal

7:48 policy through geothermal rising. specific customer demand, so looking at industrial customers and figuring out how could we potentially integrate behind the meter with them to help you evolve that,

7:60 economic developers, all sorts of problems that we need to solve internationally but mainly domestically. And that's what I'm working on today. So not a straight path. So what excites you the most

8:14 about geothermal?

8:17 What excites me the most of all geothermal is it's baseload potential and that it's literally everywhere. So twofold, literally everywhere, we are standing on this resource that if we just have the

8:31 right technology, the right capital, the right, I say four ingredients, which are the demand, the infrastructure, the technology and the, and the geology starting with the geology, we really

8:46 can power the world in a way that is sustainable. It's already there. We're not creating anything. We're using technology that already exists. In most cases, we're using workforce and

8:59 transitioning that appropriately, but that it's base load. So we're creating resiliency exactly where the resource is to where the people are. You don't have to go very far to get there. And that

9:12 drives economic development. It improves the quality of life and the human development index across the world really needs to be addressed in some areas. I think this is the potential to do it. I

9:24 do want to add a caveat though because you asked, you know what I like about it. I also want to say it really is a compliment to the portfolio mix of energy. Today, technology isn't always going

9:38 to be commercial. We need to be able to leverage the abilities of solar and wind and natural gas and other things so that we can really expand economically. without

9:54 costing so much on the energy side and by stacking these energies together with geothermal as a base load, you actually improve the resiliency of everything else while improving the cost factors. So

10:07 I just think geothermal is a friend of everybody and should be really embraced by everybody. So historically, up until like the last couple of years, geothermal commercially in the US has really

10:19 been limited Geographically to areas kind of like in the Nevada area, right? Where you've got some of the, there's like only really two big major players. It was like CalPine and another company,

10:29 right? Wormat is there. Wormat is publicly traded. So they're well known and covered, CalPine as well. BHE Renewables, it's Berkshire Hathaway Renewables. So we're in Befid's company. There

10:43 are actually quite a few geothermal companies And geothermals existed domestically for 100 plus years. Geothermal resources were actually used by Native Americans for cooking and medicinal purposes,

10:56 the hot springs, etc. Yes. And as that history evolved, it was actually in the 60s when the geysers and in the salt and seas, so that California and Nevada area, that traditional or conventional,

11:09 I call it traditional or conventional not to separate, but the right technology in the right place is important not only for geothermal, it's an oil and gas thing too, so you have conventional and

11:20 conventional. The hydrothermal space is really looking at those top-side water anomalies and

11:25 trying to figure out where that upflow is so that you can use that hydrothermal system to create electricity or direct heat usage like spas and

11:36 you know steam. And that's how like most of like Norway's geothermal. That's typically like that's just kind of been the traditional approach to geothermal. You don't see a lot in the sedimentary

11:49 basins. way that we're thinking about it in Texas and the DOE has done a lot of work around as well. But there's another side of it too. There's the ground source heat pump side. These are the

11:59 shallow wells that are using ground source heat pumps for things like HVAC of commercial buildings or residential buildings or even thermal networks which are becoming more pervasive in the Northeast.

12:11 So it's not just limited to California and hydrothermal. There's the heat pump application as well. But when we think about kind of the next wave of technology that geothermal anywhere, geothermal

12:23 everywhere, that's leveraging willing gas technologies as an example or a closed loop technology called the Advanced

12:31 Geothermal System to really tap into deeper geothermal potential. For example, in the geopressured systems of Texas or if you're in New York, the deep, you know, you can't really stimulate. So,

12:48 you know, kind of the deep closed loop systems to do utility scale power. So walk me through the and it's probably doing the simplest terms and then we can go deeper. The different kinds of

12:60 technology. So you've got the traditional hydrothermal. Typically, you're going to have a vertical well there that's looking for an upflow of a hydrothermal resource that is usually depicted with

13:13 top side, you know, you can see water anomalies, surface anomalies. The two acronyms that are becoming more pervasive, and I would even dare say that there are segments within each of these are

13:28 EGS, which stands for enhanced geothermal systems. Some people like to also say engineered geothermal systems. I would say both are true. We can talk about that. And then AGS, which is advanced

13:40 to your thermal systems So EGS is going to take the concept of I'm creating fracture, a fracture network, so think of a very hard, hot, dry rock. You drill, you fracture, and then you introduce

13:59 a fluid that then you can pull to the surface and take the thermal energy from the fluid. So, when this looks more like an unconventional, like that's why? It looks more like an unconventional And

14:10 I would dare say that there are segments within EGS because a true EGS, like I'll give a shout out to my friends Sarah and Tim and Verbo. There are others at Verbo, but if you haven't had them on,

14:27 you should. They are doing a fantastic job of leveraging their skills from oil and gas to improve drilling and really hard rock to

14:39 increase speed of drilling and introducing the fluid. really kind of what I would call the guard rail of where EGS can go. If you get this right, you can do geothermal pretty much anywhere. But

14:52 then if you pull back a little bit and go into some of the sedimentary geopressured systems like we have here in Texas, that's a lighter stimulation. You already have a very pressurized hydrothermal

15:06 solution subsurface in place And so you actually don't have to use maybe some of the technologies and go as cutting edge as what Fervo is doing. You can use existing technologies. We're just

15:18 developing the water leg of an oil and gas basin, right? So maybe using unconventional tools, but in a conventional basin. And that's, I would say, a less risky approach because we've already

15:32 done it. We have the workforce for it. We have the tools. We have the talent to do that. Let's go ahead and do it. We also have some DOE projects that have proven it worked. but it's not really

15:43 been done on a commercial scale. So that's where the risk is. So those are the two ways that I would explain EGS and then everything in between. So if you're technical, you'll understand

15:54 everything between like super porous and super permeable and super wet to hot dry rock, everything in between. This is pretty much just differences in geology. Exactly, exactly. Where we see AGS

16:07 advanced geothermal systems is a closed loop You might, I've actually heard people say, and I just want to address this

16:17 debate upfront that EGS is a better technology than AGS because it's gonna work and it's already been proven. And I'm just gonna dispel this myth. AGS is extremely important advanced geothermal

16:31 systems the closed loop where you're basically drilling two wells and connecting, whether it's shallow or deep, is extremely important for the world. including areas that have policies that

16:44 prohibit stimulation. Any sort of fracking is not possible in states like New York, for example, or Europe. You have to have a different technology. And so the big debate is around, well,

16:60 technically, is it sound? Yes, it's technically sound. There are a lot of people that have proven that it sound, but economically, is it sound? Well, in certain markets, different economics,

17:11 it's just different, right? So in Europe and New York and other places, you are going to have a different commodity price, a different economics structure. And in those situations, we need that

17:21 technology. So the way I think about it is the right technology at the right place at the right time for the right purpose, EGS fractures, AGS closed loop. We also need ground source heat pumps to,

17:33 for heating and cooling, for HVAC systems to help us reduce the power pole on the grid, we're moving to things like electric vehicles or we're growing the economy, bringing in new industrial

17:46 manufacturers in our country, we predict that the grid size needs to double. It makes sense to use that ground source for HVAC for heating and cooling. So how do you harvest the thermal on a closed

17:60 loop system? How does it actually, so you got two wells that are connecting, is it just the pipe in between is getting hot, or is there any sort of like fluid? There's a fluid, yeah. And that's

18:11 where the technology becomes proprietary. So I'll shout out a couple of companies I know that are doing this sort of work. You have, well, I mean, XGS is more like not EGS or AGS. It's XGS.

18:26 I'll tell you about that one, too. Like ever, for example, is creating a system where they have some sort of ability to to connect those two wells and they have some sort of proprietary tubing

18:44 that's, you know, they'd have to explain it to you what it is and then it'd probably still be very proprietary, but it's able to contain a working fluid and that working fluid is probably going to

18:54 be some sort of water fluid or something that's obviously not an environmental danger, but that fluid then is exposed to the heat and then it comes back up with thermal energy that then would turn a

19:10 turbine. So traditionally we see and for many years have seen organic greenkin cycle turbine as kind of your standard for creating power. I also am talking with quite a few folks that are starting

19:23 to get excited about a supercritical CO2 Brayton cycle, which could produce even more. There's a gentleman out of Pittsburgh that's working on that. There's one at the Southwest Research

19:34 Institution that's being developed, so it'll be interesting to see if that is is is taken on by AGS or EGS systems, but yeah, that's it's just you're exposing it to the and then you're bringing it

19:50 back around. So you can imagine, you know, you have to keep it hot, you have to make sure not to introduce a really cold fluid into, you know, the hot area. Sorry, are you guys doing AGS? No,

20:03 so I wouldn't say that a geothermal Titan or geothermal holding would ever shy away from any sort of technology, but we're very interested in Texas and have quite a few prospects in Texas that we're

20:15 looking to develop quickly. We also have some international, some traditional hydrothermal and others in areas where we need to do AGS. Obviously, we would partner with technology providers that

20:30 could do that, but for here in Texas, it really is just an unconventional oil and gas. But we're just developing water. What is. And we start with you guys, but I'm also curious if there's any

20:43 variety in this. Like what is the commercial model, right? So I mean, a lot of this is still kind of very much in the feasibility and the RD phase. What is the model? Is it go and set these up

20:58 everywhere and then you become the power plant, you sell to the utilities, do you sell direct to consumer? Want me through that? Like how are you guys thinking about this? Yeah, I think what's

21:08 really important is to acknowledge that every jurisdiction's gonna have a different answer to that, but here in Texas, I'll start here. We are a deregulated market, so we have the ability to do a

21:20 couple of things. We can partner and sell a power purchase agreement to a retail electric provider like NRG or Constellation or one of those as a generator, and then we can own and operate that

21:35 facility We can look to commercial. or large industrial manufacturing is an example, data centers is an example, big power draws, go behind the meter and create code generation. We could do a

21:50 combination of the two where we have a behind the meter solution that then can be pushed to the grid through an interconnect on site, maybe even in strategic partnership with that behind the meter

22:04 customer. So there are a few different ways that we might approach that business in terms of owning and operating. There are three models that I think we're pretty flexible around. One is we can

22:17 build it and own it and have a power purchase agreement for a period of time that then gets transitioned over time to a new owner. So maybe it's somebody that's not looking to develop but wants to

22:28 operate and they decide to do a change of control, some sort of buyout. Sometimes with the code generation, the customer wants to eventually own that asset on more control, they could sell more.

22:40 you know, do energy trading over their interconnects. So that could be a model. The other could just be let's pretend that one of these new manufacturers just wants a cogent and they just want to

22:51 pay a developer fee to develop this. They want to actually own, you know, the majority of the asset and just hire us to develop it. We could do that as well. What we wouldn't do in Texas is go

23:03 directly to the customer, to the retail, you know, the residential customer I see that more as maybe like an HVAC, like a ground source heat pump model, but usually you're going to need to go

23:16 through the electric utility if you're delivering directly to the consumer, it's a highly regulated industry. So let's talk about the economics. I know that there's been some incentives, I think,

23:26 probably with the Inflation Reduction Act, right? So talk me through that and then let's also kind of talk about possibly the challenges associated with the economics. Yeah, sure, so with IRA,

23:39 we do see 30

23:43 to 50 tax incentives for the projects. I would add the caveat that we need to move quickly because there are deadlines on that and the amount of time that it takes to develop a geothermal project,

23:54 usually depending on the jurisdiction can take some time. So - A couple of years. Depends on the jurisdiction and whether you're using federal or private lands Federal lands usually tends to take

24:06 longer, and I think on average it's five to seven years, which is a very long line. So we're gonna incentivize you with the IRA, but the federal lands we also control will go very slow on. But

24:17 the beauty of that is it really incentivizes us as well to look at the private lands and how do we develop there. And so in Texas, for example, and I'll keep saying Texas because a lot of our

24:28 listeners are probably Texas, right? In Texas, you have maybe an 18 to 24-month cycle depending on things like supply chain. equipment appropriately interconnect lead times, things like that.

24:41 The economics are becoming much more, I would say competitive in the market based on technology curves and what the Department of Energy has announced with the enhanced geothermal earthshot

24:55 incentives. So we do see a lot of kind of pushing us forward a lot of wind to our backs there. But the challenge is the high upfront capital then results in a little bit of a lead time 18 to 24

25:11 months being on the shortest impossible, I think. We do see interest rates are obviously a problem if you're paying interest before you're ever getting to revenue. Texas has initiated some loan

25:23 programs that actually don't require interest rates to be paid until the project delivers its first revenues, so that's super helpful. Other parts of the economics really come down to You know,

25:37 transmission and distribution service providers have a specific fee that they're going to charge that we can't really, you know, get in. We can't really get in the middle of we can actually reduce

25:47 those costs by going behind the meter and help reduce those costs The costs associated with drilling so we have commodity challenges where the commodity price is high and there are a lot of rigs

25:60 drilling for oil and gas, then we have to compete with those day rates so costs of steel obviously is something that really impacts us so I think the volatility is really something that we have to

26:11 get our arms around and that's what the DOE here domestically is looking to help with or a lot of those things The other area that I'd say really impact economics is around exploration, the

26:22 exploration and the permitting process. There are quite a few policies for, for example,

26:30 categorical exclusions for oil and gas are not extended into geothermal, not because they shouldn't be, but because Nobody's addressed that through policy yet, and so we have to jump through

26:41 several hoops that oil and gas doesn't have to jump through until we get that reversed, and that's obviously something on the policy agenda that will continue to pursue. But that timeline just adds

26:53 up. It adds up to more interest. It adds up to longer times to get to revenue, etc. So you're paying more GNA just to get to revenue. And so there are definitely some challenges there But we do

27:06 see quite a few advantages with the IRA and quite a few advantages with private lands and being able to get our arms around moving quickly behind the meter is really useful. So let's talk about the,

27:19 obviously this is, it's very capital-intensive and a second on what's up with y'all's projects. What does the capital environment look like for this? I mean, obviously with the tax incentives with

27:30 the IRA, is there a ton of cash? Now Fervo's got some pretty. big name backers behind them with Bezos and Gates and those kind of guys, which is really, really cool. And I think for them, I

27:43 think it's like very much like mission oriented, right, of like being able to diversify kind of like our energy mix. Do all the investors in that space have to be mission oriented or there are some

27:54 that are also like chasing returns in a space where it's very RD heavy. Yeah, good question. And Jake, pardon me for being a bit cheesy, but I'm going to say that it's picking up steam. I

28:06 usually speak in puns because people know that I probably

28:10 we've seen, you know, obviously you mentioned Fervo with the244 million raise that was announced, I think, in February. Sage is on the smaller side at17 million. They're here in Texas too,

28:21 Cindy and Lev and those folks, and you've seen ever a raise, you've seen XGS

28:30 even, you know, XGS and I said I would explain that one too, I will. But, so we're starting to see a lot more interest. We recently saw it zero week, the Department of Energy really outlined

28:42 what the program or the plan is to accelerate geothermal in the US. So there's a lot of backing there, the DOE loan program office is very much behind it.

28:55 From an investor standpoint, my observations are that there are some investors that are very interested in the renewable energy space, but they still see geothermal as a bit of an enigma because

29:07 solar and wind have been out there for so long, there's a lot of predictability associated with it, but geothermal is just, as I said, picking up steam, so they're not necessarily seeing a big

29:19 portfolio that they can really kind of look to de-risk in their analysis I would dare say that there's an education that

29:30 needs to happen. with investors to help them understand that particularly in areas where you're using typical oil and gas technologies and teams and processes and regulation like in Texas, you

29:43 actually don't have risk if you explain it from where developing this like the water leg of an oil and gas basin, you understand what that risk profile looks like with the 19 million wells drilled in

29:55 Texas, we have a lot of data, we can de-risk it. What I do see with investors is that they do look to that LCOE factor, the levelized cost of electricity or levelized cost of energy and they're

30:10 not necessarily always considering profitability of other factors such as the density of the resource. We're using a much smaller acreage footprint. The total cost associated with development

30:24 including things like you know, what's the total cost of an estate? which, you know, the state of Texas is funneling a lot of money into as an example. When you look at things like capacity

30:35 factor, the resiliency of the grid, those are the things that, you know, investors have to start to wrap their mind around and then corporations as well as they pick their energy mix. And I think

30:46 that they're starting to see it. The other thing I'll say about the messaging or the education for investors is that a lot of investors are trying to invest in one technology and not multiple

30:58 technologies because of risk. They say, you know, one technology has to stand on its own. But when we start thinking about geothermal, unlike other resources, there could be something else down

31:10 there. So, for example, as we produce geothermal brines, there's potentially lithium in those brines or other rare earth minerals that could become a revenue stream There's potentially entrained

31:20 methane that could become another revenue stream that can also be decarbonized, and we can talk about that. when we look at all of the different revenue streams, oftentimes investors start to think,

31:31 oh, that introduces risk because now we're having to process more than one resource. However, we have to consider that the risk is not necessarily in the geothermal production because we've been

31:44 doing that type of work in Texas for a long time. And when you stack the pay of lithium and potentially lithium or other rarer minerals or methane or other types of things that you can create, even

31:58 waste heat on the top side coming together, you have all in all a better, more efficient energy project that has higher capacity factor, that has just more to offer in terms of energy efficiency

32:08 and energy density in that one location. And that's where I think investors are going to evolve too, is to understand that it's not just the brine that we're producing, we're producing, you know.

32:28 whole stack. I love that. I've never actually heard of anybody thinking about that or talking about that, and so that's really, really interesting. Is the, on the investment side, is the oil

32:37 and gas community rallying behind geothermals have been a lot of support there? There has been. You can see evidence of that with like, I'll give a shout out to Chevron New Energy Group is

32:47 investing. You can see their partnerships with Evers and base load power. You also see Oxi has picked up and they've been awarded I'm sure there are plenty of other things they are doing, but I

33:00 know that they're doing some technology testing with particle drilling or looking at particle drilling. It's basically drilling. I would describe it almost like a shotgun shell approach where you're

33:12 actually using like little particles to accelerate drilling into hard rock. Isn't that another one that's doing with lasers? So there's a company called Quays that's doing plasma drilling. Yes My

33:24 understanding is that their position to do a project. in Texas, I keep saying the T word. This year, maybe, or in the near term. So there is definitely the plasma drilling. But we'd heard about

33:37 that through neighbors, right? And so we'd had them on the podcast and we're talking about what they were doing. And it was funny because Klon and I had this theory that that would be like the

33:47 future of drilling wells because you could essentially, I don't know if it's actually worse or not, but you sort of, you cauterize all the rock and therefore you don't have to run casing

33:56 potentially anymore. And so you could do it faster, you could do it cheaper, like, that's something you can go do in space, you know, drill wells with lasers, like how cool would that be?

34:06 That'd be really cool. Well, and I love that the startup community is really foraging forward with this technology innovation because that's exactly what the geothermal industry needs for more

34:16 commercialization is, you know, just figure out how can we access that resource the same way we did an oil and gas when we could get 10 or 5. and then we can get 20 of the resource. And then it

34:28 just goes from there. So it's exciting to watch that space. And I think that largely geothermal developers are really applauding and holding up their peers in the industry, not as competitors as

34:44 opportunity to grow the pie for everybody.

34:49 So you mentioned Ferval raising200 plus million Give us some context, 'cause you and

34:56 I were chatting yesterday, what is the size of a project in terms of capital costs? What does that get us in megawatts? You've already touched on how long it would take to get those things going.

35:07 'Cause I wanna just contextually, how much is a lot of money or not a lot of money in this space, and what does that really get us? Sure, I'll caveat it with it always depends on the subsurface

35:16 and the demand and the market rates and things like that. You know, I think I think I go back to the question about the investors and let's talk about that. Like, what does it take to build a

35:28 project at scale that's going to de-risk for the investors? And coming from, you know, a hydrocarbon background, we know that the more wells we drill, the more we're going to drive economics down

35:39 and we're going to create scalability of production. So let's look at it from that perspective. I think in my mind, and I'm going to say this is my mind, a lot of people probably agree and some

35:49 maybe don't agree with it, you need to raise200 to500 million just to diversify your portfolio so that

35:60 when you're targeting maybe three different facilities or five different facilities so that if you, we know that the subsurface is risky so that if you don't perform exactly as expected, you can

36:14 balance that out So I just want to start with my philosophy is that You know, we need a half a billion dollars just to get started because we don't want to do one project or two projects. We want to

36:25 build a portfolio of projects. But let's say for a utility scale power plant, a hundred megawatt capacity, 200 megawatt capacity, 300 a gigawatt capacity. If you can build that all in one area,

36:42 then you're not having to spend a lot on the top side In addition to you're actually building one top side. So there's a kind of a scale. Yeah, economy's a scale there. I would say a gigawatt you

36:54 could probably do with a half a billion dollars or250 million depending on the drilling costs and the resources at the time. If you're building smaller power plants here and there, obviously your

37:07 cost per megawatt's gonna go way, way up. And so when we think about it, we think about diversification of geology, diversification of customer type and big. We want to go big because if I can

37:21 get at least 200 megawatt out of this resource, then I know that I'm going to be able to sell that electricity on a competitive level, which usually is going to be about four cents per kilowatt hour

37:32 in Texas. So that's about half of what some of the lower end PPA's are in California and Nevada. Usually they run in the90 per megawatt hour range. So, you know, we have to be competitive here

37:47 You know, in oil and gas, you know, a lot of times you're, you're essentially JVing and some kind of capacity. A lot of owners in a particular well has that philosophy a minute's way over to

37:56 geothermal because I'm thinking like, okay, it's just assuming that drilling is a big chunk of your cost, even if they weren't just investing in you, if they were investing in kind, right, into

38:06 a project by saying, Hey, we're going to drill the well, right? We're going to eat all of those costs and come in as, you know, essentially a working interest partner, right? moving forward

38:14 like I'm kind of curious is that whole. JV philosophy entered into the geothermal space. It's interesting. I can't say that I've seen every

38:25 situation that this has occurred, but I have seen it. For example, usually it's involving an oil and gas company and a geothermal company and they create a strategic partnership around a joint

38:37 venture. I think it's absolutely necessary. Not one company is going to be able to exploit this resource the way that it needs to And any company that thinks that they should own the whole cycle is

38:52 probably going to have a really hard time. We're just not in that type of market anymore. We have to have these partners. And I'll explain why. The oil and gas value chain is very much so. You

39:04 have your upstream, your midstream, your downstream, and even though they're interconnected, it's really linear. You're kind of passing things along. It's almost three separate industries. It's

39:12 almost like three separate industries. You can have a midstream company. You can have an upstream company. You can have a downstream company. You can have an integrated where the rubber hits the

39:22 road in geothermal, is it's a circle. You have your subsurface, you will call it upstream. But the midstream is the top-side equipment that you also have to contract and build in own, and then

39:40 the downstream is the electric or the direct heat market, which you have to have in proximity to the resource. It just doesn't travel the way that you can have molecules travel.

39:53 And then the customer is also there. So you have a whole circle and you're listening to the customer, you're listening to the demand based on your location, you're producing what they need, you're

40:05 selling it to them at a market rate, and it's a whole circle So, that said. you have to have expertise in all of those things. And I just, especially at this particular juncture of geothermal,

40:18 where a lot of the new advancements are being driven by startups. No one company can do it. And we need the financial backing of the bigger companies, the corporate strategic. So I'm all for it.

40:30 I think it's really important that we're all friends with one another. And I think that there's a win, win, win for everybody that gets involved So that's my shameless plug for corporate strategics

40:40 to go full-court press on JV's with Geo Thermal Company. No, I love it. I think we need to see more of it. So walk me through what's on y'all's plate in terms of projects. We have some really

40:49 cool things going on along the Texas coast all the way from what we'll call it like east of Houston down to Corpus and even into the valley. And those are typically going to be economic development

41:03 driven So there's a lot of state of Texas led by Adriana Cruz office has this amazing economic development community where economic developers across the regions are constantly helping us bring new

41:17 industry to Texas. We're really proud of that. We also know that that's going to cause a huge increase in electricity demand and even direct heat demand across the entire Gulf Coast region with a

41:32 lot of the ammonia and green hydrogen and things like that that are coming into our state. In addition to that, we have some existing industry that intends to continue their expansion and they need

41:44 to have resiliency of the grid to help with a few things. One, of course, is they want to continue to maintain operations in the event that there are some weather issues or grid instability or

41:57 things like that. But the second is that they also are very focused on their decarbonization efforts and so it's just smart to have base load energy that's also renewable. Our projects, we have

42:12 selected 30 sites along the coast. We intend to pursue them starting with three immediately that we will drill in sequence to one another, parallel to one another, that are directly co-located with

42:29 these facilities. And from there, continue to scale And then probably going from three to six, and then maybe six to 12, so we can kind of get our feet under us. But those projects across Texas

42:43 are not the only thing we're working on. It's just the first thing we're working on. There are some areas in Louisiana that we find very interesting. Louisiana is different, jurisdictional

42:53 together. Largely, inter-G is responsible for that region, but they also have some grid stability and decarbonization efforts. And then internationally, we're looking at countries like, you know,

43:08 India, for example, India has a human development index kind of in the middle. They're kind of in the middle of them. And I'm gonna throw something at you, the cosnets curve where, you know,

43:19 industrialization, they're kind of at that mid-level where they're really starting to see a need for resiliency and energy and really accelerate their economic development. So that's a huge hotspot,

43:30 parts of Africa, parts of Europe. So we're all over the place, but we're very focused right now on breaking grounds in Texas, three sites in Texas. That's super exciting. This has been like a

43:43 re-primer. I just haven't even talked or thought about doing a thermal ton in the last couple of years. And so yeah, this is like really refreshing to kind of start seeing where this is at and what

43:53 the future of this looks like. And so this has been really awesome. Yeah, I agree. Well, I appreciate your interest in it. And we should talk more.

44:03 We actually have several events and groups that have formulated over the past. couple of years. So do you mind throwing them out there? So geothermal rising has been around for 52 years at this

44:14 point. Jamie Beard? She's project interspace. Geothermal rising is actually a group that's been around they're the advocacy group that's been around for about 52 years or so. The executive

44:24 director there is Bryant Jones. And we have some folks working for him out of Texas and then other areas as well. Geothermal rising has established regional interest groups across the country and

44:36 internationally specifically here. We have the Texla Oak, Texas, Louisiana, Oklahoma, regional interest group that I initially championed. So it's, you know, in my vested interest to see that

44:48 grow and will be at OTC. So definitely if you're going to be at OTC, stop by and see the geothermal rising booth, watch Bryant Jones on stage and then I'll be there representing the Texla Oak rig.

44:60 The rig is free to join. So anybody that wants to know anything about what's going going on in geothermal in this region. Join the Texelope regional interest group and just learn. We'll send out

45:10 newsletters and have events and things like that. The other couple of things are, you did mention Jamie Beard with Project Interspace. She is from UT Austin and, you know, Project Interspace is

45:22 initiating the RDD, the research development and demonstrations part of the geothermal earth shot, the enhanced geothermal shot with the geode, which is the geothermal energy and oil and gas,

45:37 technology, integration, demonstrations. And that's 100, I want to say that they are negotiating165 million for demonstrations across

45:47 the US. So this is a really cool, very cool group to follow and they've written a whole paper on geothermal and oil and gas. So look that one up. And then the last thing that I'll mention is the

45:59 Texas Geothermal Energy Alliance since I mentioned the T word so many times I do reflect geothermal across the globe and Um, because we're starting here in Texas and there's, there's so many clear

46:10 paths for our city. This in Texas, um, consider also looking into the Texas geothermal energy alliance. They're helping us drive the right policies to really take advantage of this opportunity.

46:21 What's so crazy and I'm totally okay with you saying Texas love is so much of this is born here. A lot of it is born here. So much like Texas truly is the, the energy capital of the world and then

46:35 this expands into all parts of energy and infrastructure. Even we're very deep into the Bitcoin mining space and now even the AI data center space. On the Bitcoin mining side, 30 of global hash

46:46 rate comes from Texas now. That's because we have an abundance of energy here. We know people who don't extract energy and these guys need tons and tons of it. Right? Well, we're blessed with all

46:56 sorts of energies here in Texas. We have the irradiation for solar. We have the right wind for wind. We even have title opportunities. We have Obviously, the hydrocarbons,

47:08 we have the geothermal resource. But what I'd say the Texas - Ports for LNG, we've got - Ports for LNG, we have - CCUS might have the infrastructure. But what I'd also say that we have that a lot

47:20 of places don't have is we have policy that's been established and appropriations and jurisdictions that have clear paths. So the Texas Railroad Commission is the jurisdiction for geothermal We can

47:34 go through the permitting process the same way we can for oil and gas. We can use the same talent pool. We can use the same technology. There just is so much setting us up for success in Texas that

47:48 it doesn't make sense to not take that opportunity. I mean, why wouldn't we? Exactly. Yeah. Exactly. Which makes the case we should just be our own country again. Well, I'm gonna go that way.

48:02 I won't go that far, but I would say, I mean, maybe, I would say that it can be an incubator. We can be an incubator. We call it the Silicon Bayou, right? We can be the incubator for it, and

48:14 then we can share that with the world in a meaningful way. And that's an altruistic thing for Texas. I'm sure it's very profitable, but it's also altruistic for us to take that on our shoulders and

48:24 we should. We can. Absolutely. So we should. This has been a blast. Thanks.

48:31 We do We'll get it. Thanks for having me. Absolutely. Guys, take two seconds. Share this with your friends.