Episode 205: Technology Commercialization with Cam Hosie, CEO of 8 Rivers Capital

Today's guest is Cam Hosie, CEO of 8 Rivers Capital. 8 Rivers develops sustainable infrastructure scale solutions to help companies and governments profitably achieve their net zero aspirations, as well as addressing other important societal problems. They use a unique model to commercialize technologies in Blue Oceans, fields that are lacking in creative disruption and outside thinking.

From creating new ideas to helping large corporations solve old problems, their ecosystem and process guide how they think. The current 8 Rivers portfolio includes Net Power, CARBON8, TarT, Calcite, CODOX and many others. Now, this was a fascinating discussion. I've not come across a company quite like 8 Rivers. We cover their origin story, their criteria for what types of projects to take on, what stage they get involved, their process for taking new technologies to market, their willingness to consider outside technology versus developing in-house, what type of capital they have, what types of collaborations they do as they bring new technologies to bear, and some recent success stories as well. I learned a lot from this one and I hope you do as well.

As always, please consider giving us a rating or leaving a review. We heard that helps spread the word about our little show and engages more folks in the climate fight!

Jason Jacobs: Cam, welcome to the show.

Cam Hosie: Yeah, thanks Jason. Good to be here.

Jason Jacobs: I was telling you before we started recording, but 8 Rivers has been on my radar for quite some time and I- I've been particularly excited for this one because coming from where I'm coming from, with a primarily digital technology background but now being three and half years into a focus exclusively on climate change, it's clear that- you know, that atoms really matter. And so, the work you're doing with atoms and putting infrastructure front and center is both so important but it's also one that's just pretty foreign to me and to a lot of others like me coming from the more Silicon Valley types of companies. And so, I'm just so grateful for the opportunity to learn from you today.

Cam Hosie: Yeah. And like I said, like I really appreciate you having me here. And, you know, one of the things which I think has been distinguishing for 8 Rivers is that, you know, a lot of us come from an infrastructure or big tech background but at the end of the day, climate is a physical story. Like, it's CO2 molecules that are up in the atmosphere that come from somewhere, they- they have to be pulled- and they have to be pulled out through physical processes. And so, what we've tried to do from the beginning is focus on infrastructure scale solutions that can replace the emitting assets, which actually are the backbone of the problem today. And you know, I think as an organization one thing that's distinguished us- us is a complete willingness to- to grapple with CO2 in the most literal of senses. So, you know, they've said like, the digital [inaudible 00:04:52] that's gonna play a big thing here too, and it's honestly somewhere where I have less background so I'm looking forward to the conversation.

Jason Jacobs: So you're not- you're not gonna do a mobile application for the fourth project that you take on this year? [laughing].

Cam Hosie: [laughing]. Possibly not. Possibly not. It- un- un- unfortunately the steel and concrete is too well attached to the ground in most instances to be truly mobile.

Jason Jacobs: So if I was sitting next to you at a wedding and I said, "What do you do for work?" Or, "What does 8 Rivers do?" How would you answer that?

Cam Hosie: So look, personally, I'm the CEO of the organization. That said, I've been with 8 Rivers since around about 2011, 2012. Like a lot of people, as they're changing careers, there was a gray space in the middle as to whether it was- is the question, am I doing this or am I not? 8 Rivers as a whole, we focus on infrastructure scale solutions for energy transition problems. And in that sense, we're actually- we've tried to build this out as a platform of different technologies rather than being technology specific.

Now that said, the thing that we're most well known for is the technology which is now being commercialized through Net Power. The underlying Net Power technology is called the Allam-Fetvedt cycle and the two, Rodney Allam and Jeremy Fetvedt, are both partners still to this day here at- at 8 Rivers. So we, as an organization, have tried to focus on the development of technological but commercial solutions and then help to lead the commercialization of those technologies out into the market. So, we acted as corporate founder of Net Power, we led its capital raising. We then were substantially involved in its operational management for the first several years of its life and, as that company has now matured, it has its own management team in place, we still act obviously as a shareholder and a manager that also looking to deploy Net Power projects.

And so 8 Rivers today, we're trying to- we're building ourselves out as a technology agnostic decarbonization solutions platform where we look to partner with large organizations and we'll bring in infrastructure scale solutions that actually deliver enormous climate impacts for them. They're fundamentally typically touching CO2, like literally processes that will handle and touch CO2 and either sequester it or put it into products etc. But overall, we're just also trying to come at this from the angle of, you know, all of it, solutions that are deployable today, that are economic and that can actually be adopted anywhere without too much cost penalty, in order to actually have a meaningful impact on climate.

Jason Jacobs: And what's the origin story for 8 Rivers? When did it come about? How did it come about? Why did it come about?

Cam Hosie: Two co-founders, Bill Brown and Miles Palmer. They were MIT roommates a long time ago. I won't say exactly 'cause they probably don't want me to date them on air. They had taken varied career paths. One went into finance and the other went into technology development, particularly with military applications. And in the 2007, 2008 timeframe, they reconnected and decided that- that the innovation economy, whilst good for small applications, wasn't good for large things. Like, the Valley of Death is a cliché but it's a cliché which is very real, particularly for big things. And so, wanted to come up with a business model that could actually enable global scale solutions, if you will, for hard problems.

Jason Jacobs: Don't lose your train of thought, but what is a big thing, as you’re defining it here?

Cam Hosie: Power generation, transportation fuels, direct air capture, building products, etc. Like, truly big problems like that. Now, early in the course of the company, there was a focus, it wasn't particularly energy transition related. There were a bunch of different technologies pursued that were, you know, ambitious in their own way, and some of them are still very much kind of like in process as we do that. But, realized that we had- you know, there was an early win with the creation of the Net Power technology and then the lessons that developed out of that, we realized that we were able to extrapolate those into a bunch of adjacent spaces, whether it was hydrogen production, whether it was different gas processing technologies, direct air capture, etc. Whereby, we could take the coalescence of what enabled the Net Power breakthrough and actually deliver a much broader set of solutions coming out of that.

So even- you know, the 8 Rivers origin story, it really a- a couple of college friends coming together, putting it together. Uh, and then we developed these technological solutions, put together very, very diverse teams on them, almost no one with background in the space, and applied those different lessons along with a lot of elbow grease and hustle and so forth. And you know, at this point I think, into the technologies that, you know, have been developed here, and to 8 Rivers itself, we've raised a little bit north of half a billion dollars of capital at this point.

Jason Jacobs: And what's the Cam Hosie origin story and how and when and why did those origin stories intersect?

Cam Hosie: So, circular ultimately. [inaudible 00:09:39] is probably the better way of putting it. I'm a New Zealander, and I was a lawyer by background. So actually I started off doing energy litigation basically at oil firms, so we knew each other over rights for offshore leases and onshore leases in New Zealand for a couple of years. And then most New Zealanders, well particularly, you know, lawyers and so forth, you'll work for a couple of years and you'll go overseas, and a very typical pathway is to go to London in one of the big firms. I wanted to go somewhere a little bit more unusual, what I thought would be a bit more exciting. And so, I signed up in 2007 to go to Russia actually with an English law firm, and so I went to Russia and started doing oil and gas deals and financial institution type of deals in- in Russia. So, M&A, JV's, etc.

Obviously, emerging world, learnt a- an incredible amount about the way industry actually operates out there in the real world, as it's being done. But I was- I was with Clifford Chance for about five years. In the middle of that, I took- you know, around about the GFC, I took nine months off and I came to Duke and I did a master's in international business law. And Bill Brown, one of the two co-founders was also teaching some classes at Duke, I did some of his classes, I went back to Russia. About a year after that they, you know, Net Power emerged from the process and he reached out to me asking about some contacts for some of the early financing they were doing.

And one thing led to another, I was at the stage in my career where you decide, look, do you wanna become a partner and do this for the rest of forever or do you not? And so, I- I'd pretty much decided on the to not path and I was looking for a- you know, whether that meant I wanted to go towards investment banking or whether it meant going some other way entirely. And look, I looked at the Net Power technology and it was compelling on- you know, from what I knew of industry and what I knew of the technological need itself. It was compelling. So, it was a pretty easy conversation with Bill where he said, "Look, you know, if you wanna join, just come back and we'll just figure something out." And so, I sent him a job description, I said, "Look, I'll be there in about three weeks. You can fire me after six months if it doesn't work out." And came back in and was just part of the- the very early team as we developed with this and have been along for the ride since.

So, I took off the lawyer hat, became very much a part of the commercial team here. Uh, as chief- you know, about three, four years ago, maybe not quite that long, I became chief operating officer of the business as it was growing, and then stepped into the CEO role about a year ago or so, effectively, as we're taking these projects out for uh, execution and delivery.

Jason Jacobs: And I've been picking up on these little tidbits of how you're describing your work at 8 Rivers, I- I hear about coming up with technology and, you know, pilots and deploying at commercial scale, and keep in mind that I don't have any direct experience in the trenches bringing this type of infrastructure to bear. But I'm dying to learn more about it because it is, as we discussed, so important for decarbonizing our global economy. Which aspects of that... Maybe actually, I'll take a step even back from that. Can you talk a bit about the process of bringing these new big power generation types of technologies to market and which aspects of that 8 Rivers focused on initially, and then how your approach has evolved over the last, you know, decade or couple decades that you've been doing this work.

Cam Hosie: Look, I mean, the f- first thing to acknowledge upfront is that learning how to do this is a kind of continuing work in progress that, you know, I don't believe we've got the magic answer to this or the- well, I don't believe there is a magic solution to this. We've got things which have worked and we s- try and apply those lessons. The process that we've tried to do historically or at least, if we [inaudible 00:13:13] on paper, it's like, we have targeted a problem rather than technology per se. And so, you know, so look, power gen needs to be done without like large scale capture, or without large scale carbon emissions rather, coming out the backend of it. And then, just took a clean sheet approach and said look, if you wanted to design a system from day one that had that end goal in mind, how would you do it?

Because... And that's actually radically different from the way that most other carbon capture technologies for power generation have been developed. Because the way most of these have been developed is you have the power station, you have this technology, and you have the- the flue gas coming out the backend and you say, "Okay. Well, how am I gonna capture the CO2 out of that?" And so you have to have bolt something on and it's in- it's intrinsically parasitic, like you're adding costs, you're adding process and is always gonna make it worse.

Now, by going with the Net Power technology with the Allam-Fetvedt cycle... So look, if we were actually to go all the way back to the beginning on this and say, look, we wanted to end up with just captured carbon dioxide at the end, how would you actually do that? And so, stripped it all the way back and intuitive leap the team really had right at the beginning was, everyone's traditionally tried to reduce the amount of carbon dioxide being produced, and that makes capture harder. If you're trying to extract it from a flue gas stream you've got less and less carbon dioxide coming through, then you're making your capture problem that much worse. What our guys realized is actually let's flip that on it's head, let's try and produce as much carbon dioxide as possible. Not in an overall sense for the amount of carbon dioxide that'll be produced from a given amount of power output, but say look, make it so that the- the carbon dioxide itself in the stream is as pure as possible.

And so they actually went back to the front side and flipped the inputs going into the system and made it so it's an oxy-combustion system. What that means is if we burn natural gas with pure oxygen... Oxygen is O2, natural gas is CH4, and that's like the limit of high school chemistry that you actually need to understand this. We basically put C's, H's and O's in the front end, you put them through a combustion process and C's, H's and O's come out the back end in a different form. In this instance, it was CO2 plus water comes out. Those are trivial to separate from each other, and we actually use the CO2 itself to provide the mass to spin a turbine. And so, in that sense... You know, so we b- we basically went back to the drawing board, started again, "So look, how do we actually maximize the CO2 coming through this?" Then realized that okay, well, we can actually drive the CO- we can drive a turbine using this, and then the capture problem is trivial, and now how do you make this make money? Like, what is the efficiency of this look like?

And then we spent years, years, doing the- the desktop engineering required to build the models for this thing to make it all stick together, put together a business case for it, establish a company, find financial partners, large strategics that had both the strategic vision, I'd say, and also the requirement to transition their industries. Found sponsors within those organizations, typically by going to the top saying, "Look, this are- this is- this is a play which is gonna end up costing billions and billions of dollars in order to get deployed to scale, so it's gonna have to be top down from the biggest organizations, and then put together partnerships to do that. And the whole time, we tried to keep 8 Rivers itself relatively lean and agile and ready to, you know, pick up the lessons learned coming through that process, continue to refine it, and to continue to create new stuff.

Jason Jacobs: And can you talk a bit about the power generation landscape in general? How is the bulk of our power generated today? And then, I mean, it seems like there's a bunch of competing approaches for how it quote, unquote, should be generated going forward. And I say quote, unquote, because it's so controversial and there's so many different opinions that all contradict each other, so I mean, it'd be great to understand either the 8 Rivers view or the Cam view or both, and where those align or... You know, just like, what's the lay of- the lay of the land before we get more into the technologies that you're bringing to market?

Cam Hosie: Sure. Every prediction about power has been wrong since the beginning of time across the course of 15 or 20 years. No one- no one believed that renewables were coming as strong as they were coming 15 years ago. Before that, no one believed that, I think, natural gas combined cycle was coming as- uh, was going to be coming as strong as it was. So, let's put like a very, very healthy- a very liberal health warning on what I'm about to say when I say, look, what is the direction of this and where does it go?

The majority of power today is produced from fossil fuels, natural gas, coal, oil burning, in some instance p- not so much in the United States but in plenty of the world, that's the backbone of it. And then there are meaningful and increasing amounts of renewables that are deployed on top of that. You'll have a base load system which is producing, you know, the electricity always- the grid always has to be there, you've gotta have the right amount being produced always. And so, you'll have a base loads part of the system, which uh, may also be nuke, which is just turned on, it's producing power always. And then you have- today, you have renewables which are, you know, producing somewhere between- I don't even know the numbers to be honest, somewhere between 10-30%, some places it's probably higher than that in the US, that's producing this effectively uncontrollable capacity. Like, when the wind blows, the wind blows, and it produces power.

Then, in the middle you have a flexible capacity which is effectively required in order to balance what the renewables are doing and so forth, and most of that comes from natural gas today. A technology called natural gas combined cycle where you burn some natural gas, you pass it over a gas turbine, you then boil some steam, you pass over some steam turbine and electrons come out the back end. Now, the- the 8 Rivers view on that would be, it's a tremendously complex system and that all of it- virtually all of it has climate related challenges in their intermit. Whether it's the- the coal base load or the natural gas flex in the middle, or even the natural gas base load when it's running in that, that technologies need to be developed in order to address that. And that also renewables- no, the- renewables are a gift, like they're an incredible resource, but the resource doesn't come with the ability to control the wind and it doesn't come with the ability to control the sun, as yet. And so, you've gotta build technologies which can actually enable and support a reliable grid, while the build out of renewables continues apace.

And so, we've tried to focus on the- the development of technologies that can actually provide that supporting function. Like at the end of the day, access to power is- it's key for human social development. Like, society would fall apart without a- you know, the grid is a modern miracle and the fact that we- you can plug in- you can plug whatever into the wall and power comes out is a miracle in terms of human development and what it enables. And, well, the society that we've built on top of that. And so, we've tried to focus on technologies that will effectively deliver the vital part of the grid, that base load capacity, that flexible capacity.

It also- it uses resources that, you know, exist, are plentiful, are secure, that are out there, in a way that is actually economic. Because, if you look backwards, the one thing that the power industry has done very... The h- the hindsight, you say- look, the most economic solution in the power industry has won almost every instance. Like, renewables today are competing on price for the part of the market thatWe've tried to focus relentlessly on technologies that will have a pathway to being the most economic solution as well. Because ultimately, the technologies that we've tried to develop, they have to be able to be deployed everywhere. Like, if you could click your fingers and turn off America's power, all carbon emissions from the United States overnight, all you've really done is delay 1.5 degrees by a couple of years, you haven't actually solved anything. Now, I mean, you might feel better about it, you'd be like, you know, we- look, we live in the cleanest country on Earth, but like the atmosphere is global and so you've gotta create things that can be deployed everywhere so they can be deployed without government regulation having to- to mandate their existence. they're serving and that's why you're seeing this enormous uptake in delivery. Like, you know, the hand of the market is saying, okay, you'll build out the supply chains, you build as many renewables as you can, because the part of the market that they're taking is- is growing and the economics are driving their adoption.

 And so in that sense, we've also very much focused on making sure that we're creating economic products whereby people will choose to build them particularly, or the build out will come at scale because the hand of the market drives.

Jason Jacobs: Now, to try to parrot back what I think I just heard as a way to make sure that I understand before we move on, it sounds like there's base load power, there's the flexible that you can turn up and turn down and then there's the renewables. And that- and that the base load primarily is dirty and that the flexible has some dirtiness as well and that renewables might be cleaner but they've got an intermittency issue and so they're not- you can't count on them. And you're focusing on those first two, the base load and the flexible, and looking to do so in ways that are both cleaner and less expensive than existing options.

Cam Hosie: Correct. And that's certainly for the power technologies that we have been developing. Now, outside of that, you know, 8 Rivers, we've also built out a hydrogen production system which will deliver- uh, we can create hydrogen with 100% carbon capture which becomes a replacement option for liquid fuels, also for fertilizer. You know, hydrogen goes into ammonia is- as a fertilizer helps feed the world. Hydrogen, obviously it goes into most of the hydrocarbons, it's a- literally where it comes from, the hydrocarbon fuels that we use, it is the energy carrier that's in that. And so we've been developing a hydrogen technology to try and deal with the liquid fuels market, the clean fuels market, industrial heat. We've been doing point source carbon capture technologies, realizing that we need to be able to suck up CO2 out of the atmosphere in an economic way because we've overshot our target already. Like, there's too much CO2 that's going up, we're gonna keep putting it up there, we and- kind of just need to work out in scale systems to pull CO2 back out of the atmosphere. And so, we're very much wider than just power gen, we're also trying to deal with industrial emissions or you know, technology just to deal with industrial emissions from transportation, emissions from fertilizers, and- and other things such as, like I said, direct air capture.

Jason Jacobs: What's the 8 Rivers view on the future of- like what role do fossil fuels play 10 years out, 30 years out, 50 years out?

Cam Hosie: Fossil fuels are abundant, they're everywhere. They- they are economic, presently they have a tremendous climate consequence of their use. But they have driven social and economic development and that- if they can be harnessed in a manner which avoids that environmental externality, that they should be used. And let- well, let me say, that's the Cam view, per se, that you know, fundamentally energy is a human mission. Like, energy is used to build schools and to deliver power and heat and to provide quality of life, and there's a tremendous amount of the globe that doesn't have western living standards and they should have access to that. Uh, those countries will use the resources which are available to them, that will be fossil fuels.

I think if you look at any of the projections for what the world is going to be using over the next 50 years, every energy source is growing. The use of every energy source is growing, there'll be more coal, there'll be more natural gas, there'll be more oil, there'll be more renewables, there'll be more nuclear. Everything is going up. And if we don't come up with solutions that effectively meet the world where it is, then we're gonna fail miserably at dealing with climate change.

And so, you know, whether I think... Like, there is no moral case, per se, for fossil fuels one way or the other. They're an object that we can extract energy from and we can use that energy to help drive human development and- and all the benefits that come from that. They will be used, it's incumbent on all of us [inaudible 00:25:21] as incumbent on ourselves to come up with solutions that make sure that they're able to used in a way that drive economic development, that will be adopted at scale and a- and avoid the environmental externality of it.

Jason Jacobs: And I wanna make sure I understand, you said that there was a caveat that fossil fuels should play a role if they can do so in a way that- and- and I just wanna make sure I understand that wording, that- that what? What- what do they need to do to be an acceptable part of our long term solution?

Cam Hosie: We need to stop boiling the planet. Like, we- we need to work out a way to use them that doesn't involve relentlessly driving global warming. And at the moment, the- our current- the current usages of them are driving an ever accelerating amount of global warming.

Jason Jacobs: Why, in the environmental movement, is that such a controversial statement? I mean, if it- 'cause global warming is what they're worried about and yet they're convinced that fossil fuels and fossil fuel companies need to die, why do you think they f- feel that way?

Cam Hosie: Well I mean, I'm sympathetic to it because people think that like, there have been no technological solutions that actually deliver a clean outcome today. Look, we believe we're developing a unique set of them, they've got tremendous traction. You know, I I- drunk the Kool-Aid 10 years ago on what this thing can do, and so I- I've had a decade of exposure to it so I- I've got, I guess, a readiness to accept that this solution is practical and available. And we're seeing tremendous amounts of money shift towards it, and we're moving towards deployment quickly and it's scalable and I've got the sense of it. Everyone who's on the outside doesn't have that. There is nothing else out there.

Like the- all of the other kind of like proposed solutions for... You know, greenwashing, the- the term exists because it's frankly what most companies have done and what most technologies have been. And it's- people are rightfully skeptical of it. Like, you know, the claims that we're making about what our technologies can do, people shouldn't just take them at face value because we say them in a smooth manner, like that's exactly why things have failed to date, like these things should be rigorously tested, the partners we're bringing in have been doing that rigorous testing on that to check the- you know, to check the math, if you will. Like, it is checking out but I think that people are skeptical because it's most... One of the advantages of 8 Rivers being formed 10 years ago is that we don't have 100 year history of pumping fossil fuels and, you know, we started this from nothing in order to come up with solutions exactly for this problem. You know, most of us threw away successful careers or- or p- very much put at risk successful careers in other fields to make a committed movement towards saying, "Look, a solution has got to be done to- to do this." We're not trying to greenw- like, we at 8 Rivers are not trying to greenwash a multi-billion dollar fossil- like, fossil pumping business which currently burns it.

We're developing these things in order to actually meet the solution that's required. But, I would like to think we come into it with more credibility than most folks, but also just bec- that should not be sufficient, people should test it, people should be skeptical, it should answer to the highest standards on this. People should ask hard questions like, "Okay, you guys are gonna keep burning methane, what about upstream methane leakage? Like, what about the fact that pipes leak?" Those are valid questions that we should have answers to. And the answer on that should be, "Well, okay. We are looking at solutions to do that as well, we should be imposing the highest standards on our technology licensing constructs in order to make sure that we're able to answer those concerns." But they're all- like, there is no perfect answer, there's no magic bullet at the moment, that we're just- as I said, I think th- that's where a lot of the skepticism comes from.

And there's been an increasing amount of coverage of, for instance, the Net Power technology over the last couple of years, so it's starting to invade the consciousness a little bit more. Like I said, I've- I've been on a 10 year journey with this thing. Most people have seen it early and I think they're rightfully applying a degree of skepticism because there's been a lot of panaceas which have been proposed before.

Jason Jacobs: And as a newcomer, it's confusing to me because it's like, "Well, renewables. But there's intermittency. But storage and there's long duration storage and the price of lithium s- you know, lithium storage is coming down and, you know, we can make it make-"

Cam Hosie: I'm sorry, is there? Is there long duration storage?

Jason Jacobs: Well, th- there's the promise of it and there's tons of capital going into it. I mean, I'm not trained on assessing like, are flow batteries ever gonna be cost competitive at scale or- or anything like that, but you hear about the- like Form Energy raising this massive amount of capital and- and more news like that every day. And then there's nuclear and there's advance nuclear and- and then carbon removal and carbon capture and storage at point of emissions and direct air capture. And it's a very confusing landscape for a newcomer to understand, so I guess I have two questions on that. One is, if 8 Rivers and all the technologies that you are in active development in different phases didn't exist, how do you think that mix should play out without 8 Rivers? And then if 8 Rivers is successful, what does that mix look like? And what share do you take in the process of being successful if you had to predict?

Cam Hosie: The- I guess this is one where it's like, one of the lessons we've learned is that the economics will control, ultimately, that- you know, what is the most efficient or what is the most economically deployable solution is what's gonna win. And the reason I- I start off with that qualification, I say look, my opinion on what should happen, like, doesn't matter. No one's opinion on what should happen matters, this is an- a tremendously distributed problem such that it'll be the economics that drive what is actually adopted around the globe. And also there is no should, the answer is what will happen following the- following the economics.

Like, Adam Smith wasn't wrong all that time ago. If the technologies that- you know, that we've been working on... Like, all of the things you mentioned, long term storage, lithium batteries, nuclear, advance nuclear, small modular nuclear, like every one of those should be pursued relentlessly because this is the most tremendously challenging problem that we as a species face today. And what we are doing should not be to the exclusion of anything else. It's all part of a comprehensive mix and at the end of the day, the right solution will filter out by the economics, and there's not gonna be a global right solution, some things will work in one place, other things will work in another place. But I would just say, look, it's incumbent on all of us to develop- to be supportive of every technology solution which is being proposed or being chased at the moment. Recognizing that, you know, we don't have all the answers, we aren't even close to all the answers. A tremendous amount of work needs to be done in a lot of different technologies.

But, also that energy transition has to start today. Like, if we just say, look, the energy transition is the build out of renewables and that's the end of it, we know today that the renewables are not going to be 100% to the grid anywhere, maybe one or two places and great if that happens. But like, uh, unless we're coming up with solutions that can be diverse, that can go into many, many different markets etc, we're gonna lose. We're kidding- uh, like, sure we might feel better, like we can go, "Oh, look at us, we- you know, we're doing the cleanest possible thing," but if it's not actually- if it's not deployable at scale immediately starting pretty much today, we're going to lose the climate fight.

Jason Jacobs: And you talked about how no other approaches that had tried to clean up fossil fuels are doing so effectively, so the ones that claim to, like- like you know, putting scrubbers at the plant, at point of emissions, and a- and again, I don't know if I'm using the right words here, but- and capturing it so that it never makes it out into the atmosphere. So, just as one example, where does that- or where do most of the solutions that you've seen, miss the mark?

Cam Hosie: They're not economic. I'm like a broken record on this. That the, you know, scrubber technology like, there's nothing ha... Like at the end of the day, chemically it's not hard to pull CO2 out of a flue gas stream for a- a power plant. Like, it's a- it's an entirely known technology, it's been done for decades at this point, but the economics are terrible. You end up putting substantial cost onto the plant, it becomes operationally more difficult to do, there's various other byproducts that come out of it and you still only capture, you know, 80-90% of the emissions coming out, so it's not even a complete cleanup.

And so, you're putting tremendous energy penalties on these things. What that energy penalty means is that the cost of the product coming out the back end is more expensive, it means the power- your power bill goes up if you're gonna do it, and they're not- the technology has been known for long enough about scrubber systems. Like, you know, there may be breakthroughs which- which change the math but there's no scrubber system today which is actually gonna clean up the power gen sector. Like, there's gotta be fundamental change.

Jason Jacobs: And you talked about how you have some different types of projects in development and- and also in different phases. There's power generation, there's fertilizer, I mean, it sounds like a wide range. Is there consistency when it comes to certain criteria that you look for in any new project that you might take on? And- and relatively, from an expertise standpoint, is it a completely different set of expertise and people within 8 Rivers that's working on these different projects, or is there overlap across?

Cam Hosie: No. I mean, great question. They're not different groups. The lesson that- the real lesson that- for uh, at least me personally as we went through this was, you know, oxy-combustion, learning how to handle CO2, realizing some of its properties, etc, they all have [inaudible 00:34:51] lessons that we took out of the Net Power development. We were then literally able to pick up lessons around oxy-combustion, you know, different chemical flows, how to- and how to handle CO2 through those, and kind of almost picked those up and bolted them on to different things that needed solutions as well. And so, there has been like an organic pathway in terms of technology development within the business as well. We- we've either followed our noses in terms of where the technology applications would lead and what else you can do with it, or what we've also tried to do is to be market driven or responsive to what customers were telling us that they needed. And then using the skillset that the team had to think through what can we use or what new thing could we create, kind of like drawing on some of those lessons to solve that problem, could we do.

Yeah. So, you know, it sounds like a tremendously broad range of things but, you know, underpinning all of those industries that you see at the moment are hydrocarbons. And if you work out a way to create... You know, like I- I said, there's two key lessons that we've got. It's how to make heat in a clean manner, and by clean I mean the actual use of h- like, use of hydrocarbons coming in, but capturing all of the CO2 in a format such that you'll be able to sequester or do whatever with it in order to make it not show in the atmosphere. So number one, the creation of clean heat. And secondly, how to handle CO2 to actually separate it out for processes in a manner that's economic and monetizable out of it. So, you end up with an overall solution which is more economic.

Now, when it comes to all of the above, they basically rely on heat and they create CO2. And so, if you say, look, I've got this- this- my solution one is I'm gonna take this clean heat and I'm gonna put it onto hydrogen production or I'm gonna put it onto cement production, or whatever. Clean heat, like most of the emissions today are- come from heat production. So, if you say look, we've got a way to do clean heat, then you've actually just solved a whole bunch of problems. And then, if you've also, say, look I know how to extract the CO2 from that process, I know how to use it in a way which is more economic and more efficient, then you put those two things together and you've suddenly- like, you've got this Cambrian explosion of technologies that are developed on the backend of those lessons. So that's been the pathway for us, and it's also the pathway where I- where I see this going forward.

There's a virtuous- [inaudible 00:37:04] really kind of heading Silicon Valley here, but like there's an innovation flywheel effect that comes out of this. You know, we created a technology, we put forward a solution, and putting forward the solution we realized that actually there was more technology that could be created, so you create that and you roll that forward. And that's what we're doing. It's also why, as 8 Rivers, we're focused not just on the creation of technology but also then putting together projects to actually deploy it. Like, we wanna have our- we wanna have like, the dirt under our fingernails, like you want the people in the field that are learning the lessons or extracting the lessons from that, 'cause then they can take that, they can improve the product, and they can also create new products on the backend of it. Or I guess, to use the true Silicon Valley term, to eat your own dog food.

Jason Jacobs: [laughs]. I mean, it sounds like in the Net Power example, so you develop the technology and then you bring in the capital and then you assist with the deployment, but it- it sounded almost like there's a gradual pass of over time where you maybe move more into an advisory role. Can you talk a bit about which aspects you- like to use the Net Power, you took on yourself and which ones you pass, and at what point? And then also, is it- do you envision that that's consistent from project to project or is it really more project specific and technology specific?

Cam Hosie: I mean, I'd say that that's an evolving story, as also our own capabilities are evolving. So, the technology was created in-house, we were the corporate founders of the company, our own team did the vast majority, the early work on the system. And then we brought in a major partner in a engineering firm [inaudible 00:38:36] uh, [Shore 00:38:37] Engineering, ultimately became Chicago Bridge and Iron, ultimately became McDermott as they- you know, it went through various corporate forms. They then brought the expertise that like, an organization with hundreds of thousands of- that has a staff that can do millions of man hours per year work on this that have actually built tremendous scale facilities, they brought all this g- all- all the knowledge about how to do that. We then kind of like guided that but there was a- there was a handoff on like drawing the drawings and doing the engineering procurement plans and so forth with that partnership. They developed it to the next point.

And then we brought in- 8 Rivers was als- was still managing their power at that point. We brought in more partnerships, excellent generation, and uh, ultimately Occidental and then recently Baker Hughes. And as those organizations came in, they- they brought their own strategic capacities. Like look, we can be innovative outsiders, Exxon knows how to build a plant and they know how to operate a plant and to do so safely and they brought that capacity and they did that. McDermott knows how to build them, they did that. Baker Hughes can do the turbines, they do that. And so like- and as we did that, we effectively were extract- we extracted ourselves away from the management and it was set up with its own management team because it had to be its own entity at that point. But we continued to kind of like- we still assist the team, we provide, you know, some degrees of guidance and now we're actually trying to deploy projects in a partnership model with them too. So it's just an evolution across the lifecycle with the technology.

But ultimately, these are tremendously large pieces of kit and the people who truly know how to build them and deploy them and get them out in the field, it is those who have built all the tremendously large pieces of kit that actually exist out in the world today. And so, those are the partners you need to bring in 'cause they're also the ones that can deploy at scale.

Jason Jacobs: And you mentioned the project finance requirements. I- I did see recently that you raised, I think it was 100 million, from SK and it sounded like it was more at the holding company level. How do you think about finance for projects versus finance for the 8 Rivers entity itself? And what does expansion look like at the entity level?

Cam Hosie: So we're- 8 Rivers we're building effectively as a- I mentioned, like as a platform for creation of these things and deployment of these things. Now when it comes to actual deployment of projects, we are establishing project companies and project vehicles and then we'll raise finance directly into those. And we have a number of capital partners that we're brought it, or in the process of bringing into deployment opportunities for the project specific deployments. You know, that maybe like a single power plant in Illinois, yet we'll bring in infrastructure, finance partners to help build that. That's a billion dollar project, we're not gonna do that through the top co. But that- they're where- basically again, we're founding these companies, we're establishing and we're burying the- uh, the early costs, maturating those project opportunities to the right point where you bring outside capital in and in an off balance sheet manner.

Now, 8 Rivers, [inaudible 00:41:23] mentioned, we announced last week that we've actually bought the first external cap- some of the first external capital into the top co at 8 Rivers, and that's to build up the platform holding. That's where the SK Inc. out of South Korea, a diversified conglomerate touches on energy, infrastructure, telecoms, other. Tremendously large group, huge capacity, you know, something north of a hundred billion dollars per year revenue going through the group. It has also got very, very, I think, sincerely held and aggressive carbon goals. They wanna be removing 200 million- 200 million tons of carbon from their operations by 2030. So, they've invested into 8 Rivers to build out the top co capacity so we can continue to develop these solutions to partner with them to bring projects into their footprint etc. And also together we're gonna be establishing a joint venture as a channel and to deployment of these technologies across some key Asian markets with them.

Because, coming back to what I said a while ago, the energy transition has to happen everywhere. Like, decarbonizing the US doesn't do anything, frankly. Like it's important to do it, but why- it's, you have to help lead decarbonization everywhere. And the deployment of these technologies into the- some of these key Asian markets, they- that's where the energy transition is gonna be won and lost, is t- whether we can help China on this journey, whether we can help Africa on this journey, whether we can help, you know, Indonesia, Malaysia, these tremendous incidences of population growth on this journey.

And there's a social development aspect to that as well. Like, energy is development and bringing those technologies in to those areas sooner, I think, is tremendously important. One way I like to think of it- and, you know, this is too simple but it's illustrative, intended to be illustrative, there's probably maybe three investment cycles for infrastructure scale technologies between now and 2050. It's probably only two realistically, two full cycles, but maybe three. And the number of projects which are gonna be deployed will be- I like to think of them as probably being like a power function of how many is deployed in the generation beforehand. And so, if we start off in a w- you know, with the technologies we have, if we deploy two in this cycle then next cycle we might deploy four, maybe six, and then the cycle after that you deploy 16. You just increase by power function, and net net you've deployed 24 odd projects. You know, those may be economically brilliant, you know, they may be great opportunities etc, but if you have- if you have deployed 24 power plants and that's it, you actually haven't achieved anything from a climate perspective. You've moved the needle very, very, very slightly.

Now, if your first generation of deployment is 10 plants and your next generation is 100 plants and your next generation after that is 1000 plants, well now you're talking, now you're actually maybe making a difference. And so, wanting to increase the footprint of the uptake of these first generations of plants is incredibly important. And that's where, like, a partner like SK is just a tremendous addition to the effort that we're making here to help drive that uptake. And as you said, like 'cause a hundred million dollars into the top co, just I think a tremendous show of commitment from them, but also speaks to the readiness of these technology solutions. Like, the- you know, 100 million, that's real money in anyone's- you know, in- in any world, that's real money coming into this and that speaks to the readiness of what's being offered.

Jason Jacobs: And how do you balance finding new technologies to bring to market versus scaling what you've got given how non-trivial it is, as we were just discussing, to get these technologies from the lab through wide scale commercial deployment?

Cam Hosie: Customer-driven, that the economics drive. A couple of the technologies that we're working on have actually been responsive to things that we've been asked when we've been talking to Prince, it's a national oil company in- in the Gulf, talking about [one widget 00:45:13]. And they say, "Well look, you know, that widget, it's not quite what we need," or, "That widget's interesting but can you drive that widget with this fuel?" And we said- the first answer was, "Probably." And then we went back and we tried to do the engineering to see whether we could drive the widget with that fuel and realized that actually we could take some of those lessons that I learned about to actually make that fuel itself decarbonized, will be cleaned up. And actually separated out the technologies and we ended up with a new technology offering that was effectively just a treatment- a fuel treatment system coming out of there. But very much kind of like customer-driven in that sense.

Jason Jacobs: Uh-huh. And one thing we haven't talked much about yet is government. And there's a bunch of different angles that would be interesting to talk about government. There's the policy angle and how much policy matters and how active you are on that front, there's public, private partnership, there's government R&D. How do you think about government and how do you resource the government and in what ways, if at all?

Cam Hosie: The- you know, these large scale industrial- the industrial sectors that are driving carbon emissions are at the heart of national economies and there is government involvement just by in to their nature, you know, it's fundamentally industrial policy that we're talking about. The government has been for us, and I think has been a tremendously important partner in some instances for development of- or, you know, ready in the deployment of some of these technologies. I think obviously the government is a key player in the engineering landscape today. It sets the regulations, it sets carbon targets, it sets everything else. It's, you know, having government buy-in on the readiness of this is gonna be vital for actually achieving anything in this space.

Jason Jacobs: And are we t- are we talking about US or are we talking globally right now?

Cam Hosie: Global. Global. Yeah, we've been engaged with government, we'll probably, you know, continue to increase our engagement with various governments as the technologies continue to maturate and- and move towards deployment. You know, we wanna do these things... Like, you've gotta have local buy and you've gotta have stakeholder buy and you're not gonna build a billion dollar project somewhere where it's not wanted. And so, making sure that policy makers are well informed, know about the readiness of these solutions, you know, what they can offer in terms of economic and social development, like it's all part of the messaging.

I also think that it's an important to flip this slightly as well. Governments I think also will need to understand that solutions are available. Like, regulation of carbon emissions doesn't mean you have to turn the lights off. Like, regulation in carbon emissions will drive people towards adopting these emerging solutions. And, you know, whether it's ours or whether it's others, like obviously the government can actually dr- you know, governments everywhere can drive these kind of fundamental decisions. But the atmosphere is global, we've got to come up with solutions that can be globally adopted. And I think that the major markets, they can obviously have downstream or upstream effects as well. You know, like if America sets carbon intensity goals on products which are coming across the border then suddenly you're controlling the carbon- the carbon goals of the supply chain. And it is a power which is- government has, it's incumbent on it to actually use it.

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