Energy Tech Startups

0:00 Welcome back to the show. Today, I am here with Omar Abu Sayyid, who is the founder and executive chairman of Volted Deep and Advent Tech. Thank you for being here. My pleasure. Thanks for

0:14 having me. So why don't we just start with you telling us what is it that you do in Volted Deep? Sure. So the two companies, Volted Deep and Advent Tech, used the same technology that was first

0:26 invented by my father and some of his colleagues and contemporaries in the late 80s, which takes a deep injection well and it uses the science behind hydraulic fracturing to enable the opening of an

0:40 aperture underground, deep, deep underground. So we're talking about a mile or so plus or minus, into which you can then pump solids. And so the technology was first deployed for the purpose of

0:54 remediating. oil field waste that had been left improperly buried in surface impoundments in the north slope of Alaska. It was the first place they did it. Oil companies had drilled oil wells,

1:05 left the waste in pits at the surface that were online pits. And after the passage of the Clean Water Act and the, and Recra, which is the other central piece of environmental legislation in the US,

1:19 the companies, the government came back to the companies and said that this is an improper burial method This needs to be remediated. And so my dad and his colleagues who were leading up the

1:31 deployment of hydraulic fracturing of the North Slope for production purposes had identified that they could actually excavate this material, grind it up, make a pumpable slurry out of it using

1:41 wastewater or seawater. And they could actually pump all of the surface waste into these cracks that they would open, these fissures they would open deep underground in contained formations. So he

1:55 promulgated that technology across the world, again, along with a couple of contemporaries. And we had identified in the late 2000s, the ability or the need in the US for new infrastructure to

2:12 handle the waste that was arising from oil and gas developments, primarily in the shale basins. And this is a much, much more efficient technology than just building landfills or leaving them

2:24 buried at the surface. It's secure. The waste stays permanently sequestered in deep formations that are the sorts of formations that these rocks came from to begin with.

2:37 And in ways that are deeply protective, both of surface water and groundwater resources, and on a much smaller footprint at much lower cost. And so sort of advantaged on every metric you cared

2:51 about. And so I raised a series A to build a disposal company to utilize the technology. But my first instinct when I was thinking about starting a company was not to use this technology for oil and

3:04 gas waste. My first instinct was I was coming out of a company that was sourcing biological oils, so algae oil and soybean oil and other vegetable and plant oils for the purpose of making

3:20 petrochemical replacements. And there are lots of problems, there was lots of potential in buzz around algae and other natural oils at the time, many of which could be grown at scale, but you

3:31 couldn't extract the oil out of the microorganism easily, anti-water it easily. So algae is a good example of that. And I had realized that like you could store carbon by growing algae and then I

3:43 could use this technology, my dad invented to put that algae underground, and I thought I could get a carbon credit. And as it turns out, there was no market for carbon credits at the time that

3:52 would pay me for doing that activity. So I said, well, gosh, I really think there's something here, but let me start the company I can start today. This was 2012,

4:02 peak of shale. Let me start a company that I can start today. Always with the intention of revisiting and coming back to the climate use of the technology. And so the market finally caught up And

4:15 so we spun out earlier or late last year, we spun out vaulted deep to take that same technology that we deployed and matured over decades and with gas for the purpose of carbon removal. And what we

4:28 do there is we take organic waste, which has in it carbon that was first captured by vegetation. It was used in the economy somehow. And there's residual carbon in the waste by product of that

4:41 vegetation And we take that and we sequester it underground using the same technology. And we can measure that carbon and it's verifiable and it's very high quality. And then we can sell carbon

4:52 credits to the voluntary carbon market. That wasn't an option 10 or 15 years ago at the scale that you need to build an enterprise. And so it's these two companies that are carrying in them the sort

5:05 of story of the energy transition of a fossil technology developed for fossil environmental purposes repurposed to

5:14 remove carbon from the atmosphere to address climate change. And that, I think, is kind of the story of Houston. I think it's the story of what has to happen

5:28 for the energy transition. But it all comes down to the same piece of science, which is, in our case, a deep injection well, married with the science around geomechanics, et cetera, that was

5:37 developed and perfected by the oil and gas industry for the purpose of putting solid waste underground, including carbon-bearing solid waste. Do you have to. fracture the shale to do this? Or are

5:49 you already looking at areas where it's already fractured or you have those

5:56 where you can easily store? What do you need to do to actually be able to store? So we look for a set of geological criteria that will allow for permanent sequestration. Will arrest any migration

6:11 of the injected fluid, the injected solids, any of the decomposition products that would arrest any of that migration back to surface. We also look for formations that in which we can use pressure

6:24 pumping to dilate either the pore space or existing fissures or create new fissures to be able to emplace solids in it. Without that sort of dilation, what you would encounter is a pretty rapid

6:38 plugging of the pore space, which would block further solids from coming in. There are other types of subsurface formations you can use. We own a facility in Kansas that has 60 salt caverns that

6:52 was first developed for storage of propane, of liquid propane.

7:02 Those are deep underground, essentially cavities excavated in a salt sheet where we put some of this material Ultimately, you're pretty geographically limited if you're just looking for that sort of

7:16 formation. And so the technology that we brought out of oil and gas to deploy, that gives us a much wider set of geologies that we can work with. Okay. I'm familiar with the regular sort of CO2

7:33 storage

7:36 And there you have to inject like pure CO2 in super critical form, but what you're doing is different. the CO2 from this biomass, but it's injecting the entire biomass. Correct, correct. So

7:50 think about the carbon cycle. There's CO2 in the atmosphere. Trees like the ones over your shoulder

7:60 capture that and turn it into a mass, right? They use that to create the leaves, the stalks, et cetera. We use grass as an example. A cow might eat that grass is using that carbon that was

8:15 captured by vegetation. It might create a cow patty. It might defecate. There's carbon in that. All of that carbon originated in the atmosphere. By the way, if left to its own devices will

8:30 decompose in the presence of the bacteria it has encountered and will liberate all that carbon back to the atmosphere. Unfortunately, when it liberates it, it doesn't liberate it just as CO2.

8:38 Liberates it also as methane, which is even worse for climate. So you have carbon coming in and and which will eventually go back out in a more potent form. We break that cycle. So we let the

8:51 carbon come in, vegetation, it captures it, it gets used, something's grown in it, somebody uses that thing that was grown, but at the end, there's a waste. So whether it's pulp and paper,

9:03 whether it's food production, whether it's rearing of animals, at

9:09 the end of the day, there's carbon left in the carbon-bearing waste And that organic waste is our substrate that we sequester. And by sequestering it, we prevent its return to the atmosphere. And

9:23 really important in our current, in our deployment, selling into the voluntary carbon markets, we are not taking any credit for the fact that when it goes back to the atmosphere, it goes back as

9:34 methane or in part as methane, and the multiplier you would get from that. So that's not how we do our carbon accounting our carbon accounting is strictly based on.

9:46 the amount of CO2 that had to be captured by the vegetation to trap that carbon in the volume we're taking. And then we deduct from that

9:57 offsets against that volume of carbon for the alternate scenario of how that particular piece of waste might have otherwise been used in the economy. We deduct from that any leakage in handling. We

10:11 deduct from that the carbon emissions required to put it underground, to transport it, the embodied emissions and the equipment we use. So it's very rigorous. It's a very rigorous set of

10:24 calculations. But ultimately, we're not capturing gaseous CO2 and injecting gaseous CO2. We are letting, and the beauty and the simplicity of what we do is we let the vegetation do the work, get

10:40 captured for free. We let the The carbon get aggregated by the economic. precursor use, whether that's food production or animal production, that carbon got aggregated, someone else paid for that,

10:51 someone else had to do that. And in the end, we have this concentrated stream of carbon bearing waste, generally, where we try to co-locate our wells. Yeah, because I would think like, taking

11:04 all this biomass and then capturing the CO2 from it is also very energy intensive. So you're kind of skipping that step, a step. And then you're just taking the whole thing, injecting it

11:14 underground. And have you done any studies of what happens to this waste when it is in the sub-surface? It just stays there, does it react? Yeah, so there are, we've done a lot of work. So we

11:27 have a project I'll talk about in the city of Los Angeles. We take about 15 to 20 of the sewage sludge from the city of LA and we sequestered underground using this technology, 20 on a daily basis.

11:43 that material has already been digested. So

11:49 it went through the wastewater treatment plant and then it went through anaerobic digestion. So it's had bacteria, it's seeded into it to create anaerobic digest, date gas. That material,

12:02 by the time they send it to us has hit the economic limit of the gas they can easily recover at the surface before they have to make way for the incoming sewage because sewage doesn't stop. And they

12:13 have limited footprint that they could reasonably build digesters on in urban settings. And so, but what we've shown is that if you put that underground, it can continue to decompose. The

12:26 practical matter is that

12:32 some portion of it will decompose into methane which remains permanently trapped under the confining layers that confine our injection. Some of it will decompose into CO2, which at those pressures

12:44 and temperatures in the subsurface will dissolve into the formation brine and eventually mineralize.

12:51 But there's something called the, there's a relative permeability effect and a residual gas saturation issue where even though there is methane that may be generated in the subsurface, it's

13:03 immobilized in the pore space. So the best analogy I can give you is if you open a can of fizzy water and pour it into a glass, what you'll find is some bubbles can move, the big bubbles. The

13:14 small bubbles aggregate on the glass itself. And they're not trapped there because they've formed a strong bond of some sort, they've chemically bonded. There's a weak bond, a van der Waals bond

13:25 that's holding them to the side of the glass. And only if you disturb it or the bubbles aggregate to be big enough will they become buoyant. So a similar effect is happening in the pore space which

13:36 is this gas, just cannot move. even if it's there, unless you've charged the reservoir substantially. And I'm talking about significantly more volume than we have forecast in the life of the well

13:50 today. And so that methane that is generated down there is permanently trapped. Okay, let's talk now a little bit about kind of the business model, right? You said now is a good time to launch

14:02 this idea, had kind of been sitting in your mind for a while and how you could use this in the clean tech space.

14:10 Could you talk about, yeah, that decision to say that I think where the market is ready for this now and who are going to be our clients? How are you selling this? For sure, so,

14:26 vaulted is benefiting from, you know, standing on the shoulders of a lot of companies that came before, and four thought that went before and two, the issues with sort of the Kleetech 10 and the

14:38 incentives to deploy. technology there and what needed to happen to organize a carbon removal economy that would essentially what we do is we provide the net in net zero. So, you know, if you

14:49 believe in net zero and you want to get to net zero, you can reduce what you can. But at the end of the day, you have to net off the rest of the emissions with the removals. And that's what that's

14:57 what vaulted exists to do. And there's become consortiums of buyers who are willing, really, for the purpose of ceding the market to go out ahead of the government and actually purchase carbon

15:11 removal credits on a voluntary basis. That didn't exist in a scale that was supportive of what we wanted to do 10 or 15 years ago. And so our business model for vaulted today is we trap the carbon

15:28 and we're paid by the buyer who wants to buy that carbon credit to buy that carbon removal credit for the purpose of reducing. hard to abate emissions elsewhere in their system, but

15:43 really the beauty of vaulted in my mind as an entrepreneur. So I'm going to sort of set the party line aside for a moment and talk about as an entrepreneur. I've lived through CleanTech 10 and the

15:55 implosion of a lot of amazing technology, but who couldn't either get across the Valley of Death, because there was a funding gap between what VC would fund and what it needs to scale, or just

16:05 couldn't get to product market fit, no one would pay for the green premium necessary for their technology to get adopted to come down the cost curve so it could compete with petrochemicals.

16:16 And so when I thought about spinning vaulted out with my co-founder, Julia, one of the things that struck me is we actually have multiple business models. Because vaulted solves many problems at

16:29 once, we solve an issue of carbon removal, But as I mentioned earlier, if the. If the organic waste is left to decompose, some of it will go back out as methane. And so there's actually an

16:41 emission that, there's an emission that comes from that, that is a different type of emission. We don't sell that credit. We don't take credit for that today. But in a world where the voluntary

16:52 carbon market around removals doesn't mature, there may be another, a pivot that the business can go through. We also solve a lot of issues around waste. I mean, you know, this country has a

17:04 waste problem You know, we put many things into landfills that could otherwise be used. We have a terrible, you know, we've treated

17:14 our economy as a disposable one. We buy things we use once we throw them away. So we have a huge waste issue. And that waste issue is manifest itself in a lot of other problems. PFOS being an

17:26 example where we've got, you know, these forever chemicals that bioaccumulate Now, all through our water stream, we have microplastics everywhere. So we have all of these waste issues. And

17:35 vaulted actually addresses a lot of those because the points of aggregation for some of these problematic materials are at wastewater treatment plants in the biosolids that we would take, the

17:47 digested sewage sludge that we can take and inject.

17:52 Then there's a third issue around environmental justice. Waste infrastructure has typically been built in places with the lowest regulatory standards or with the least powerful citizens. And so you

18:06 find,

18:08 now that's not universally true and sometimes it was built in unutilized land far from a city, but the city grew up and the presence of the landfill means that that real estate is low value and so

18:23 you have a reorganizing of where people live And so, you know, it's not universally true, but there is a huge environmental justice issue. around the deployment of waste and other infrastructure.

18:35 And the beauty of what we do is we operate on such a small footprint where we can co-locate in the environment where the waste is being generated, that we can keep that local and we don't have to

18:47 rely on, I'll give you an example, the state of New York has the biosolids from New York, the treated sewage sludge from New York, is hauled all the way south to places like Alabama and North

18:59 Carolina to be spread on fields, you know, we shouldn't be happy to see that happen, that feels like that's a problematic activity. And so, you know, vaulted has these, we solve multiple

19:11 problems at once with a lot of co-benefits beyond just the carbon removal of features. That's what gives me a lot of comfort in the resiliency of this business to the different business models that

19:23 maybe needed to find product market fit Yeah, so it's about kind of removing some of the waste that goes into our landfill. and finding a better way to use it and sequester it so it doesn't impact

19:36 our water streams and yeah

19:43 and so you know you have this is not your first startup no so maybe we could talk a little bit about your your startup journey and you said you've been with within the clean tech space from for many

19:55 many years it'd be interesting to hear your perspective on like the transformation that you've seen and where we are today and where we were maybe a decade or two decades ago from the perspective of

20:08 the startup ecosystem but also the perspective of VC and investment. Yeah I think a lot of I think where we are at risk of making a lot of mistakes today that are lessons we should have learned from

20:23 the past and so I'll talk about that in a moment but you know really over the course of So my very first job was with BPE, big oil company. And the first project they put me on was how do we make

20:35 the Gulf of Mexico compliant with a Kyoto Protocol? Kyoto Protocol required a 20 reduction in emissions off of a 1990 baseline by some by 2010 or something like that. And our CEO at that time, Sir

20:49 John Brown had committed

20:53 the company to be compliant with a Kyoto Protocol. So my very first job in oil was to deal with the environmental issue of the emissions, right? So, and that was, you know, BP was seen as an

21:05 outlier at that time. So, and I'm talking about oil companies in the context of climate change 'cause I think it's really emblematic of where the economy has gone. There is not a single major oil

21:16 company on earth that doesn't have net zero goal promise or an energy generation strategy There are not.

21:28 incredible CEOs of large international publicly traded oil companies who are still in the climate denier camp, right?

21:38 Someone may call out one or two exceptions, but when even the CEO of Aramco is talking about climate change and the need to be responsible around that, you know we've come somewhere, right? And so

21:48 that journey, which has taken far too long, unfortunately, has been driven by, I think, a couple of things One, I think we've had a generational transition in leadership. The baby boomers have

22:01 largely exited the economy through retirements and et cetera. And you have Gen X kind of at the helm. I mean, climate change was not controversial for generation X, you know, it was taught as

22:13 earth science. It wasn't, it wasn't, it wasn't controversy. It wasn't, it was, and it was taught before the era of really this politicization of science where we're in this moment where we're

22:24 politicizing science. You know, Gen X and to a lesser extent, the millennials are now at the helm of major industries that actually move and make markets. And then you have the younger generations

22:35 coming in into the startup ecosystem who are deeply passionate, not about making money. They're deeply passionate about making the world a better place. So if those two things have really created

22:45 this moment in time where I think change is really possible. So I'm a climate optimist for that reason.

22:53 But I do think that we run some real risks that we have to manage. One of them is we have this in this moment of politicization and balkanization of our economy into red economies and blue economies.

23:06 We have this moment where we're not really talking to each other. And that risks leaving really important advancements, lessons and technologies out of the mix that should be part of the mix. And

23:20 I'll just use my company as an example. We are taking oil and gas technology I can't apologize for that. But it was matured over 30 years. It was totally de-risk. It was deployed globally. The

23:33 equipment is off the shelf equipment that I can buy in a catalog from one of many different companies, right? This is not a science fair project. This is a scaled technology. And it was scaled on

23:46 the back of a deployment in another purpose. But if we throw out everything that came out of oil and gas, because we want to be puritanical about

23:55 our sources of

24:02 technology, then we have a problem. I think Fervo is a great example of another technology that is built on the back of oil and gas techniques, oil and gas workers, oil and gas science

24:14 advancements. But if you think about -

24:20 I talked about why I'm a climate optimist One thing that worries me, if you look at, say, Rick Perry, who is governor of the state -

24:27 two terms. One of the things that he proudly touted as his record was not just delivering the highest oil and gas production in state history by the time he left, but also that our state had become

24:38 the largest producer of wind and solar.

24:42 My facts may be a little off, but certainly the largest producer of wind and the largest growth in solar installation.

24:49 And like, it's a bit tough to imagine in today's moment in time, a governor of Texas holding that out as their record when they're running for president, right? On the contrary, our state

25:00 legislature was putting writers in our most recent legislative session in bills to prevent the adoption of renewables and integration onto the grid. You know, that is not the free hand of Adam Smith,

25:13 that is not the market working. And at the same time, you know, when I spent time in other states like California, you know, there's a deep concern and aversion. to doing things in the climate

25:29 space that might extend the runway of fossil fuels in the economy. And that is a very sincerely held belief, and I understand that belief. But if you believe in that zero, and you look at every

25:44 credible forecast for a net zero economy, fossil fuels are still a significant part of the mix. And so it's really concerning when I interact with folks for whom the oil and gas provenance of the

26:00 company or the oil and gas customer for the company might be something totally verboten. Like, it's a little worrisome that we're balkanizing solution to climate change when what we really need and

26:12 a friend who talks about, Ryan Orbuck actually from Lower Carbon, who's one of our investors, talks about what we really need is a wartime footing like we had in World War II to defeat the Nazis,

26:23 where we totally shaped the economy around solving this key problem. And it's not the only time, if you think about here in Houston 60 some years ago, John Kennedy, John F. Kennedy at Rice

26:37 University said, We're going to send a man to the moon and bring them safely home by the end of the decade And totally created the organization within government to deliver this big audacious goal,

26:49 that we had no idea how to do what, when he declared it. And so that's the kind of all hands approach that we need. And you don't get that all hands approach if you tell, you know, if you tell

26:60 this finger or that arm, no, you don't get to be part of the story. So it's that holistic thinking, right? And I think you mentioned this before we got started Is that also perhaps unique to

27:11 Houston? Is that.

27:14 Oil and gas is part of our DNA, and we're not going to get rid of that, so when we talk about the energy transition, we're not talking about turning off the tap, right? We're talking about what

27:23 we can learn from these decades of being within the oil and gas industry that can help us actually transition and create better technologies, and which is exactly what you're doing. Yeah, and look,

27:38 what's the saying that the Bronze Age didn't end because we ran out of Bronze, you know, there are better solutions. I mean, the last company I worked for before founding these two startups was a

27:50 company that we had a much lower cost to deliver a molecule that could be made into synthetic lubricants, one decine, which goes into mobile one. So the key building block for mobile one, which is

28:04 kind of the best lubricant for your engine last longer, et cetera, you know, we had a lower cost route, then petroleum to get there.

28:13 but there are lots of friction points to getting that adopted that really slowed that adoption. But I really believe that like the end of fossil fuels will come and it will come because better

28:25 solutions steal market share. And there may be some residual market share, certain sectors that, you know, where that's the right solution, but then we'll have a right sized industry that isn't

28:35 gonna, you know, isn't gonna put humanity's future at risk. Mm-hmm.

28:43 For its continued existence, because we will have solved that externality where we priced in to everything we're doing. Yeah.

28:53 Exactly, so like what you said before, it's more about the market dynamics, right? And enough of these other technologies becoming cheaper and more viable that they will be less neat for us to use

29:05 something like fossil fuel. And as we're also getting a better understanding externalities of using those kind of fields. What about the investment landscape? Since you have some background there,

29:17 and I'd almost ask everyone who comes here, is how do you see the VC mindset evolving and how it needs to be further evolved to actually fund climate tech? That's a great question. So energy

29:36 technology generally and climate tech as part of that ecosystem really suffers, and I'm actually teaching a class at Rice this semester on entrepreneurship and the energy transitions. I have a lot

29:47 of thoughts probably too much for the time you want to give me. But we suffer from what I call the tricycle problem, which is long sales cycles, long technology adoption cycles or slow technology

30:01 adoption cycles and very short business cycles. That in and of itself is a very difficult entrepreneurial ecosystem or set of problems you have to solve at the same time.

30:16 CleanTech 10 was largely undone by insufficient support from low-cost capital providers for deployment of early-stage technologies. We have this cost of capital problem that VC may come in and help

30:34 you re-engineer your microorganism to eat sugar and make jet fuel, but to compete with jet fuel with kerosene, jet A from a refinery, you have to operate at a scale in multiple locations with

30:49 multiple feeds in a way that is hard to do for VC. VC expects 25 return on their money, whereas a refinery on an unlevered basis might get 8 or 10 return on their money, and so bridging that cost

31:05 of capital gap as the technology matures and having capital providers able to step in at the various points of debate employment is really critical. What, you know, oftentimes people say, well,

31:16 that gap is really, that's the role of government. And I think that's in part, you know, the IRA put a lot of government supports for carbon removal and for climate tech generally, just like the

31:29 RFS did back in 2007 and the Energy Act of '05 and '07. And that is enough to sort of get you partially there But what you really need, and this is what the VC community I think is doing much better

31:44 this time than last time, is this interconnectedness where a VC is not just cutting a check for the first set of milestones. They're also finding other ways to be helpful, to help reduce your total

32:01 capital needs to get to cash flow positive and also to organize other types of capital to help come. and support, and I'm seeing that a lot more this time than I think I saw in ClimateTech 10. So I

32:16 think VCs understand that if they're gonna play in the energy space, particularly around hardware, because software has software characteristics where it's very scalable once you have a product

32:27 market fit. That's not true in hard tech, it's not true in hardware. So I think VCs understand that they have to help organize the rest of the capital stack, and they have to be thinking about

32:37 that upfront, whether that's government grants, whether that's loan guarantees, whether that's off-take agreements. And that's the second thing I would say, is that the customer universe

32:48 recognizes that they need to play a role in purchasing goods and services from the startups to help them get down the cost curve. So Frontier Climate is

33:04 an advanced market commitment organized by, by a group of tech companies that include Stripe and Shopify and Meta and also JP Morgan and McKinsey. And it's like a billion dollar commitment to

33:16 purchase carbon removal credits from well vetted, high highest quality carbon removal companies. And they're not doing that because that's necessarily the cheapest way for them to abate their carbon

33:30 emissions, right? They're paying a lot of dollars per ton, a premium, but in part of what they're doing is they're deliberately trying to catalyze and be catalytic to companies coming down the

33:41 cost curve in their deployments by guaranteeing them a certain amount of revenue against a certain amount of tons on a go-forward basis. That did not exist. Procter and Gamble was not coming to our

33:52 startup, maybe I shouldn't use their name, but they won't come into our startup saying, Hey, we'll buy a whole bunch of molecules that We might not know exactly where they slot in, but we will.

34:03 give you a guarantee of a50 million purchase agreement if you can make these molecules, which we could have then gone and raised money against and bought equipment against and hired people against

34:14 and used that to catalyze our coming down the cost curve. They were basically like, deliver me a molecule of equal functionality with a green provenance for the same price and then I'll buy it. And

34:24 by the way, you have to source it from three different types of oils, from three different facilities so I can spec you into my supply chain. And like that is a barrier that's very hard for a

34:32 startup to work on. Absolutely. And so I think what I'm seeing different now is I see the ecosystem understanding that the journey to solving the climate problem doesn't end when you're at TRL-9 or

34:47 some set of technical milestones, that it really ends when you have carbon underground, carbon removed or products in the economy that are displacing dirtier products. And I think the buyers are

34:59 aligning around that. I think the VCs are aligning around that I think the entrepreneurs.

35:05 I think they understand that better as well now. Certainly the ones who lived through climate tech 10, like I did. So is it then, it's not just profit driving them, it's also the purpose, the

35:17 impact? For sure. Right, and that's that's change and from what you're saying, there's like a pull from customers that we've never seen before to the extent that they're saying, We'll pay you in

35:26 advance.

35:29 Are you a native Houstonian? We moved here when I was 11 Okay, so you've grown up here. You went to school here. I'm naturalized at this point. Yeah, yeah, I think more than probably a lot of

35:39 people who are here. Probably. Right now.

35:44 Tell us a little bit about how you've seen the startup ecosystem evolve in Houston over time.

35:55 It's definitely evolved. There's been a concerted effort. I think

35:59 there's a lot of unsung heroes in that. I think of Mayor Turner, I think of Rice University, I think of, there's a lot of folks who, you know, use an angel network and that were early in trying

36:13 to create kind of an ecosystem. And you see that kind of maturing out now as we're, you know, as we're a couple of decades into the recognition that if we really wanna be a tech hub and a hub for

36:27 entrepreneurship, then we need to address the ecosystem. So what I think remains missing is these celebrated exits where the founders live here and are plowing more money back into the ecosystem out

36:41 of their exit. I think we're still missing some

36:46 of the connective tissue around all of the, you know, all the stages of capital. We're also missing, I think, you know, there is an arbitrage between what a

36:56 startup is valued in Texas versus what it's valued on the coasts. And so a smart investor might say, I'm going to fund seed series in Texas and then series A's in the coast and I get a great markup

37:07 and I'm going to do that. But there's just something that I think is because our key industries have a lot of public companies in them, energy and health care,

37:20 we are anchored by the way they value businesses which is cash flow driven. And

37:29 I think that is a hindrance in getting founders to want to start their businesses here. So I think it's evolved, I think it's very much improved. I mean, when I just, when I started Adventech,

37:42 when I spun Adventech Waste Management Services out of the consulting company, my dad had created,

37:49 you didn't have the ion, you didn't have Canon, You didn't, you know, you didn't have Um as many of these places for entrepreneurs to go to network, to make we to have green town labs. You don't

38:02 have any of that. So all that I think is really positive. But we're just missing, I think, some of the connective tissue we need and just some of the dollars we need in terms of the total amount

38:15 of capital held by VCs that sit in Houston and invest in Houston.

38:22 It's an order of magnitude less than it is than any of the big coastal cities. Do you think Houston, I mean, given it's the fourth largest city in the US and

38:33 there's a lot of big corporates, like you said, but there are also a lot of small businesses in Houston. So it is still, in my mind, an entrepreneurial town, but not in the same way as Silicon

38:45 Valley with its VC backed companies. Absolutely. How do you see that culture kind of playing into where maybe we want to be building these bigger, more global companies. I mean, I think

38:57 harnessing that, and honestly, Houston doesn't get enough credit for being a city of immigrants and a place that integrated tons of immigrants.

39:07 Here's a stat for you. The most common language is spoken at home by an HISD student, right? After English, Spanish, Arabic. Interesting. You wouldn't think that Arabic is in the top three

39:23 languages spoken at home from the outside, right? You think of Jersey City, you think of Los Angeles and Orange County, you don't think of Houston, Vietnamese,

39:35 and then various Chinese dialects. And so that immigrant spirit, immigrants, we get the job done, that immigrant spirit is entrepreneurial and is a spirit of, you know, has hustle built into it.

39:49 And so what I think part of what we're seeing and why I think you're seeing entrepreneurship kind of. go a little bit vertical now in Houston is the first generation, you know, there's big change

40:01 in immigration laws in the 1960s that allowed the wave of people like I'm guessing, certainly my parents, maybe your parents, to come over.

40:11 Their big entrepreneurial bet was coming to America, right? When they got here, they had to find a way and they had to use that entrepreneurial nature to get by and to save and build their lives.

40:26 Some of them came to do PhDs and grads school and then they took jobs to be technocrats and they were not starting companies based on that, right? We,

40:37 the next generation, who are their progeny, we have the foundation that they didn't have to start from and we're able to take more risks than they were able to Absolutely. And so, you know, I

40:48 think you see that in Houston. I certainly see that amongst my peers and in my community. Much higher uptake. of entrepreneurship in my generation, then in my parents' generation within the Arab

40:58 community. And I think that

41:03 is supported by, if you look at all of these well-known stats of the CEOs of the Fortune 500 and how many of those companies were founded by immigrants or led by immigrants, right?

41:13 They call them the Magnificent Seven tech companies that are driving the tech economy right now and the majority of them have immigrant CEOs. So I think that that is a core part of the Houston DNA.

41:25 Yeah.

41:29 And I think there are institutions like Rice, U of H, does a pretty good job at this as well, but those institutions, if you look at Silicon Valley as a model, it's an ecosystem of investors,

41:44 founders, and research institutions. And you look at the state of Texas or Houston, we have tier one research institutions, right? We do. We have the human capital. It's the physical capital

41:55 and then the organizing institutions that are what we need to add. Yeah. No, I think I can really, really resonate with me what you're saying about the second generation immigrants. Because when

42:06 I decided to leave my corporate job, my mom also said to me, we could not take that risk. So I'm glad you are, right? 'Cause we just had to make ends meet. We needed to get food on the table.

42:17 And so we're seeing, we're going to see a lot more of that. I think so, but I'll tell you that I have the opposite So I had gotten, I was at BP. And I'd gotten the tap on the shoulder from the

42:28 powers that be to start my executive development career. And I had a series of really great jobs with big leaders. And I was on the leadership track. And I applied to and got into Harvard Business

42:40 School for my MBA. And my dad said, are you sure you want to go to Harvard for an MBA? Like, you have a good job at BP. Why would you leave that? And I was like, are you,

42:53 Who does that, yeah. Like, you raised me to have that ambition. Yes. And, you know, my dad's a PhD from Brown, and my mom, you know, did her graduate studies at Brown, and it's like, it's

43:04 like, you're telling me, like, that's too big of a risk to take? Yeah. That's very funny, right? But that is the conservative, you know, I always, I ripped my dad a little bit. He's a

43:16 genius, far ahead of his time He's super power as he can connect dots into a picture when other people don't even see the dots, much less can imagine there's a picture there, right? He sees things

43:29 across the horizon before they come. But he's a technocrat. And so, you know, he's not a politician, and he's not an entrepreneur in so much as he could figure out how to take his technology

43:42 ideas and turn them into businesses that are scalable in this way And so, you know, I always joke like if my dad. had grown up in more of an entrepreneurial culture, or if he had been born, if he

43:56 had been me, born to someone who'd already done the immigration story and hadn't already taken that risk and started from zero, he would have started companies with these technologies he invented,

44:08 and that's a sliding door moment we'll never get to see. But in a way, that's you, right? In a way that is me. That is you, right? You're getting to do what maybe he never got to do Do you have

44:22 a climate change story? Yeah, do what do you call it? The climate change story that you would like to share, a climate impact story that you would like to share with us.

44:32 Other than

44:35 all of our homeowners insurance rates going through the roof while the insurance market implodes. Yeah. You know, for me, my climate story is partially that the binder that gave me my first job at

44:49 BP.

44:51 making Gulf of Mexico compliant with Kyoto Protocol. And at that time, so I just graduated and I went to UT for my undergraduate studies in mechanical engineering. And one of the courses we took

45:06 had like one unit about how you create an idea for something you want to invent or build. And there was a process for going through that. And it was one of the things I took away from that is, keep

45:17 a notepad by your bed and write down ideas that you have of problems you see that need a better solution for. And if you carry that kind of with you, eventually you'll figure out a way to do it.

45:29 And I remember at the time I started at BP and I was looking at this report and saying, gosh, it's really hard to reduce the emissions out of all of this equipment. All of these different pieces,

45:42 it's really expensive to replace, you know. in a disparate set of distributed assets to get us compliant and just reading through that. I kept thinking to myself, and I remember I wrote on a note,

45:55 which sits as a draft email on

45:60 one of my old computers and my inbox, that what we really needed to do was figure out how to get carbon out of the atmosphere and do that at scale. That was what I was really struck by as the

46:11 solution to this problem of just the cost

46:30 of reducing emissions out of all of this infrastructure. And that was before we even thought of Scope 3. I mean that no one used that term back then about the emissions that arise from the use of

46:30 your product and the economy. And so for me that has been something that I have wanted to execute on for the entirety of my career

46:36 and To the point that I had, I had misgivings about going into oil and gas, and this is, I mean, I am a generation older than maybe a lot of your listeners, because I'm in my mid-40s.

46:50 But to the point that even back then, when it wasn't popular to think that way, I was thinking that way. And

46:59 when I raised my Series A for Adventec, I couldn't figure out how to get paid for the carbon removal features of what we were doing. But I talked with the Mark Gutiksen, who was the partner at TPG,

47:11 who backed me, he and Jeff Dewick, good friends, and really have changed my life in numerous many ways. They backed me to build Adventec, and one of the conversations Mark and I had as we said,

47:23 the real prize here is the climate change piece. But this isn't the vehicle or the time that is gonna be able to execute it. So handshake agreement. after this business, after you finish this

47:38 company, if that's your next company, give me a chance to invest in it. Like, we wanna back you for that company too. Wow. And

47:47 he just left my board two years ago to join Piva Capital.

47:52 And they were the first ones we gave a crack at investing in vaulted when we decided to spin it off. And actually, as he left my board at Adventech because he'd left TPG and moved to Piva, he said,

48:03 Omar, I think this is the time Like, this is what I'm, now that I'm interacting with

48:12 what's going on on carbon removal in the voluntary carbon markets, like, you need to re-think about whether this is the time to go and do that because I think there's really a there there, finally.

48:24 And that really gave us the impetus. And in fact, he introduced me to my co-founder who was an entrepreneur in residence at Piva, who was their carbon removal expert, Julia, who's been amazing to

48:33 work with and has catalyzed. this pivot in a way that frankly, I probably wouldn't have been able to do on my own.

48:41 And both through her network connections and just her gusto and energy for it. And that has, for me, that's a full circle on my career, which is this email to myself of like, how do you get

48:54 carbon in the atmosphere cheaply? And then I had this whole career in oil and gas, maybe unfortunately putting carbon in the atmosphere. And now I've been able to return to that And I think that

49:04 really feels good for my soul. Yeah, no, it's so inspiring for people to listen in too, also, that also the investors were able to see that, right? And see like, I see that there's, that this

49:17 is really something that you would want to do, but we're here to back you up when time comes. And that's kind of my message for, you know, people who might be listening and people who might be

49:31 thinking about how to deploy the most precious asset they have, which is time. You know, when you're young, you have more time than money. And when you're old or you start realizing how valuable

49:44 that time was

49:46 when you didn't value it because you had so much of it. Right. And, you

49:53 know, there's real value to learning and getting good at something. And you can cut your teeth and you're gonna make a lot of mistakes early in your career. And if you can make those mistakes when

50:05 someone else is paying for it before you take the risk of building something yourself, there's a lot of merit to that. Yeah. I'd also say there is no universe where we achieve for humankind the

50:23 standard of living we aspire to have for ourselves And that humankind accomplishes that standard of living universally. doesn't hinge today on abundant and inexpensive energy. And the key thing we

50:38 have to do is figure out how to provide that energy to people in a way that doesn't harm the habitability of our planet going forward. That there's no more important challenge. And that is, but

50:50 that is not just a single solution, right? That is providing energy in a way that is good for humankind and allows us to achieve a high standard of living. And as we think about that, we think

51:06 about emerging economies,

51:10 if we wanna go tell an emerging country, you need to leave your barrels of oil in the ground because unfortunately, the developed economies already spent the planet's carbon budget. So you don't

51:23 get to use your oil and gas. We have to have an answer for them. Right. It's imperative And one of those answers might be nuclear energy. right, which we in the West have decided to reject

51:34 because of bad branding and Three Mile Island, but like the health impacts of every other source of abundant energy we have

51:47 that we've already scaled. You know, those health impacts are substantial. The land use impacts of other things are substantial. And so, you know, we have to present a series of solutions and

51:59 create the intergovernmental structures that allow the adoption of the best technology. Whether that's solar, wind, geothermal, nuclear,

52:09 maybe they'll solve fission in my lifetime, but 20, 25 years ago when I was in university, we were talking about fission and it was 20 years away. And here we are, we're talking about it's 20

52:21 years away. But like we can't forget that abundant energy is what our lifestyle is built on Um, and It's also not a foregone conclusion. I was lecturing in South Africa last year on

52:36 entrepreneurship. And South Africa was always considered a developed country, South Africa has like four hours of blackouts every day. For the last, I don't know, since 2007, I'll get the number

52:49 wrong, but for the last decade, it's just had rolling blackouts. And that's not the hallmark of a developed economy

53:01 Our grid was tested here in Texas, too, when we have the freeze a few years ago. Absolutely. Infrastructure has to be invested in. You go to Lebanon, and they've had substantial economic

53:13 dislocation, and you will find solar cells on the roof, solar cells in a battery, on the roof of almost every home in Beirut, where I last visited. So there are solutions that leapfrog us past

53:26 the same way the cell phone leapfrogged countries into cellular communication or in the communication when telephone lines weren't economic trend. We can leapfrog, but we just have, we have to

53:36 deploy, deploy, deploy. Our time is coming to an NMR. I've learned so much from you, not only just about what you're doing involved in deep, but also how we can actually lead and drive this

53:48 energy transition and what needs to change, what needs to evolve The urgency of it and how we need to be thinking around it. Thinking about it. Is there any way that people who are listening could

54:01 get in touch with you? Is there anything they can help you with? Do you have an ask?

54:08 So we are hiring at Vault-A-Deeep.

54:12 I need a head of business development. I would love to have someone who understands the intersection of dealing with large-scale corporates as strategic partners and others. also

54:25 securing land use rights. Those are two core parts of our BD role. So we're hiring for BD. We're also hiring probably a business analyst, kind of a post-consulting, undergrad pre-MBA business

54:40 analyst. So vaulteddeepcom

54:45 and you can go and there's a link there and our job specs are there. They're also on LinkedIn And

54:52 then, you know, watch the space. We'll have more announcements to make about some pretty great things. I can't talk about just yet, but in a few weeks, hopefully I will be able to. Company

55:04 making announcements for vaulted.

55:08 I think those are kind of the key things. Awesome. If you wanna find me, if you wanna hit me up by email, I'm Omarvaulteddeepcom.

55:17 And then I'm out there on socials as well.