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0:10 path to building a Thunderlizard starts here. Learn more at energytechnexascom. Welcome back to the

0:16 show. We're here with William Taggart IV. He's worked on major projects in deep water, oil and gas, shale oil, copper mining, and refineries. His initial 16 years was spent with a consulting

0:18 engineering firm in New Orleans And he's worked for a mid-sized oil company designing and troubleshooting oil and gas facilities in deep water, Gulf of Mexico, Eagleford shale, Permian shale, and

0:18 internationally. He's recognized as a subject matter expert for control systems and process safety systems for industrial processes. And we'll get into it later. He's also written a book on

0:49 fixing America. But today we're talking about long duration storage. Specifically, a company, William, has started to call it a cavern energy storage. So, William, why don't you tell us about

0:60 the premise behind cavern energy? So, about four years ago, I walked away from the oil industry and I'd had enough. I sat down and I looked at what we needed in America. What was going to be the

1:12 next step for me? And once you start looking at the electricity markets, you realize it with the increasing amounts of renewables, you need energy storage. And the Department of Energy even has

1:22 what they call the Energy Storage Grand Challenge, where they've recognized that we need a lot of energy storage to support renewables in the future. So they figured by 2050, we need like 1, 000

1:31 gigawatts of energy storage. So once I started looking at that, I started thinking about, okay, well, how do you do energy storage? Well, the old technology, the present, the major source of

1:42 long-duration energy storage right now is a technology called pump storage hydroelectric. It's a simple technology. You pump water up a mountain to a lake, like higher up on the mountain, the

1:52 store electricity. that water when it flows down through hydroelectric turbine regenerates the electricity to put it back on the grid. It is 95 of worldwide energy storage. It's been around since I

2:02 think the first one was in Switzerland in like 1905, somewhere in that area. So it's an old technology. Well, good luck finding a mountain in Texas. That's not gonna work. There's a few spots

2:12 around El Paso that might be able to do it, but really you need a very tall mountain. The bigger the elevation difference between the two legs, the better the energy storage So once I knew that

2:23 wasn't gonna work, I started looking at other things. Now, way, way back when in college, I actually summer interned on the strategic petroleum reserve. So that's the Department of Energy's oil

2:34 storage system where they store, they've got 60 underground salt dome caverns. They have a capacity of over 700 million barrels of oil. So once you start thinking about that, you can realize that

2:44 you can do underground pump storage hydroelectric. So you can use those two salt dome caverns, built at different elevations within the salt dome, and that becomes your two reservoirs. You put

2:54 compressed air on them, that raises the surface pressure, you can locate your pump turbine on the surface. So it took me about a year and a half to work out all the numbers to figure out all the

3:04 details and go, okay, yeah, I got something. I went to a conference in South Dakota, the Salt Dome Cavern people have a group called the Solution Mining Research Institute. That's their

3:16 technology group. I went up to their conference, I did a 30-minute presentation Here's my technology, blow a hole in it, and they went, No, we love it, we think it'll work. So I was like,

3:27 Okay, we got something. So since then, we've been working on getting it funded.

3:32 We're working with Department of Energy on some grant applications. We've got about two pending at the moment, and we'll just keep working more until we can get some money. But the technology is

3:44 pretty solid. It's the market that I'm lacking at the moment. In

3:49 Texas right now, the batteries, we're seeing an enormous explosion in batteries, lithium ion batteries, and the batteries are kind of saturated in the market. So at the moment, there's really

3:60 not an interest in long-duration energy storage because what you're competing against is the batteries, but more importantly, you're competing against the peak of natural gas power plants. These

4:08 natural gas turbines that can come online quickly, supply electricity, and go offline. With2 per MCF natural gas at the moment, I can't compete against that. That's just so cheap So my thought

4:22 right now is we are going to keep developing this technology, and we're going to wait and see. I'm very sure natural gas prices are going to rise in the future, and when they do, this technology

4:30 will be far more competitive at that point. I'm just curious, when you did this research,

4:37 what was that focused on? Was that also focused on underground pump storage hydroelectric, or are there other use cases of using

4:48 those salt zones. So the salt zone caverns, we've been using, so what happens is you've got this large salt zone, this large solid body of salt. And what they discovered in the 1940s was they

4:56 could drill into it, inject water, solution mine the salt. Actually, they were doing solution mining before that, but they didn't realize they were making these caverns. So you inject water,

5:06 you bring up the salt, you have salt. Your whole thing is to get the salt. Well, now when they realize, oh, hey, we have these caverns that we're creating. So in the 1940s, they started

5:14 storing oil, natural gas, butane propane. So we've been doing that since the 1940s. In fact, there are salt dome caverns under construction right now to a supply salt to the chemical plants.

5:27 Sodium and chloride is basic building bots have a lot of chemical reactions, but also to create caverns for natural gas storage. So that's one of the nice things about this technology is that

5:37 everybody asks, is there a regulatory issue? No, they're building caverns right now. So it's an easy solution for us. So the caverns were a known technology. It's I'm just taking two established

5:48 known technologies and merging them together to create a way to do pump storage hydroelectric underground. Pump storage hydroelectric underground has been a thought for a while. There's been some

6:00 ideas about doing, converting old mine shafts, converting 1970s the from patents are there was found I what actually But. things other

6:06 and

6:08 1980s where people had thought about doing pump storage hydroelectric underground and salt don'ts. I thought I was a genius when I figured this out and blowing the hole to find all these old patents

6:18 where people had thought of it.

6:20 But we did get a patent awarded, cavern energy storage holds a patent. The patent is on how to build the caverns and build the unit. The old designs from the '70s and '80s were not constructible.

6:32 It was going to be very hard to build them economically. With the advances in drilling technologies that we've had from the shale drilling industry, we now have drilling rigs that can drill very

6:41 large bore So we now have a constructible technology that'll work. So that's such a change is that it's a underground pump sort of hydroelectric has already been known about, but then the technology

6:54 has changed the part where we can economically build it. And do you need like, you said, there's like an altitude differential that you take advantage of? So one cavern will be about 1, 200 feet

7:08 above the other cavern. So we're creating a 1, 200 foot, trying to convert into meters, like 400 meter height difference between the two that lets you store the energy. So you take, if you take

7:19 a cubic meter of brine and you move it up 1, 200 feet, you've stored a kilowatt hour of electricity. So you've got to move a lot of fluid, and it's the whole, all the pump storage hydro

7:29 technologies have this fact of, you've got to move a lot of fluid to store a lot of electricity. But the thing is you've got these huge reservoirs there's a facility in Virginia called Bath County.

7:42 it's 3, 000 megawatt rated and it stores 20 hours. So I mean, that's 60 gigawatts of electricity right there that they can store. I mean, that's an incredible amount. And that's why pump storage

7:53 hydro is really good because you can do these big volume storages. And you said 400 meters is that because it gets you that nice kilowatt ratio or is there another magic reason you're picking that up?

8:03 Oh, there's always a magic reason. So in this case, it's a question of the hydroelectric turbine There is what's called a Francis turbine. It is a reversible, it can function as a pump or as a

8:14 turbine. And it's got a limit of about 1, 200 feet, 1, 500 feet. And this is head pressure, right? The difference between, the head pressure across the turbine is determined by the difference

8:24 in elevation between the two caverns. I was talking to some of the people at Sage Geo Systems and they're gonna use a, what's called a Pelton turbine. And by doing that, they can have a much

8:35 higher pressure difference across the turbine, but it's not reversible. It has to peltan turban has other restrictions on it that make it good for Sage, but bad for cavern. So that's why we're

8:45 going with the Francis Turban. Okay. Interesting. But yeah. Because we had Sage geosystems on here, Cindy, and they talked about their technology and they're also using pressure. So how is that

8:57 different than what you're doing? So what Sage is doing is they're taking water on the surface and pushing it down into the ground and pressuring up underground So their high pressure reservoir is

9:08 underground, their low pressure reservoir is on the surface, but it's the same basic idea. We're moving fluid and causing it to go to a higher pressure state and a more potential energy state to

9:19 store the electricity. What Caverns doing is our high pressure reservoir is underground and then our low pressure reservoir is underground as well at a deep, deeper elevation. So we don't have

9:31 anything on the surface We actually only take, we take up less than 10 of the surface area. And as a result, you know, if you want to install solar panels or wind farms, I'll let grazing is

9:40 cattle. Yeah, we're fine with that. That works fine. So it's two different technologies. Now, the thing is with the salt domes, salt actually impervious. So the fluid doesn't escape. It's a

9:53 it's never going to lose pressure. It's, you know, we could, we could store energy there and leave it there for as long as we want. With sage, they're actually having some small fluid loss off

10:01 into the formation and also through evaporation on the surface. So they're losing some fluid, they've got to replace. So that's one advantage that that cavern has over sage. I sage is going to

10:10 have a lower capital cost. But I think there's some check technical challenges they've got to get over as well. Other things, stage is also also harvesting the heat.

10:19 He's having some impact, but very little from what I've seen so far. Yeah. So so I think that different use cases, different solutions, right? In some ways, because of very much focus on energy

10:33 storage. Well, and the thing is, a sage can go anywhere or more. They have much more. sites that they can use, cavern, we're locked in with salt domes. And there's, that's a limitation, but

10:47 there's 160 salt domes on the Gulf Coast that we can get access to. And looking through all those salt domes, the available acreage and everything, we can build 50 gigawatts of energy storage.

10:58 That's 20-hour energy storage. That's a thousand gigawatt hours we can store. That would cover most of what East Texas Louisiana, Mississippi needed in the future And are you using the brine that's

11:09 already there? Are you injecting water? The salt dome, as you find it, is solid salt. So you drill a well bore into it, you inject water down. The water contacts the salt and becomes brine.

11:20 And then you just keep pushing water down, keep taking the brine out until you build the cavern, or dissolve enough salt to form the cavern that you're looking to do. Now, the trick here is, and

11:31 this is the advantage that I have over conventional pump storage hydro, I take the brine, I remove the salt, I then reuse the water to keep forming the caverns. and I sell the salt. So my thing

11:42 is if I can find salt, a salt market that will take the salt, then I've got something

11:50 that is a revenue source that can offset some of my construction costs. And that makes my economics better. And you can sell that salt as like renewable salt or market it that way. A renewable salt.

11:60 So

12:02 actually the biggest salt market in the US. is road salt for salt and the roads to keep, you know, during the winter and all that And we have about a 50 million ton salt market. I think the edible

12:12 salt is like 10 or less of that. But the big bulk of it is road salt. It's road salt, yeah. Yeah, so that's what we would go after. That way we don't have to worry about meeting any food quality

12:22 requirements. Oh, you could, you could do it that way. Yeah, I'm very curious about the history of salt domes. 'Cause you said they were kind of discovered in the 40s. And I know this is a bit

12:34 of a tangent, but how do they see salt domes? 'Cause do they have seismic fragments? We've known about salt domes longer than that, actually. And the thing is, there's actually salt domes in

12:45 Poland and in Germany that were close enough to the

12:49 surface where people discovered them and they mined into them from conventional mining. In fact, there's - Just taking blocks of salt away. Just drill down and

12:57 mine it out, dig it out the salt. And I don't know when they started doing that. I think it was like in the 1600s. I mean, it's been around a long time. And there's actually a cathedral that's

13:09 been carved into a salt dome. I think it's in Poland. Don't call me on the hook 'cause I'm working off a memory here. But that's how we've known about saltos for a long time. Now, the fun thing

13:19 about on the Gulf Coast, when the salt dome forms the salt, there's a large thick salt bed from an old sea lake deep underground. And as the rock pressure pushes down on it, that salt bubbles up.

13:33 As it bubbles up through the rock above, it bends and breaks the rock layers. And that forms what the oil and gas people call traps. So oil and gas will form against the edge of the salt dome. So

13:46 one of the things when I was working in oil and gas, you knew where a salt dome was 'cause you have a ring of oil wells around a central point with no oil wells in the middle. That was a salt dome.

13:55 Interesting. And if you go look at the topography maps on the offshore shelf and everything in the Gulf of Mexico, you'll see these lumps and those are salt domes. These are salt domes pushing from

14:05 below, pushing rock up to form like an underground mountain, an underwater mountain, I should say. And you, around the edge, you'll see lots of oil platforms because that's where the oil's at.

14:17 So, you know, we've known about salt domes for a while. In fact, here in Houston, to the west, there's a salt dome called Hockley in Hockley, Texas, and there's an active salt mine there.

14:27 They are, they've drilled in from above and they're mining out salt. There's another one in Grand Saline, Texas, near Dallas. A couple salt mines actually in

14:38 Louisiana, and if you want to watch a really crazy YouTube video, back in the 80s, a Texaco oil platform was on a lake in Louisiana, drilling for oil, and they missed the oil and gas reservoir,

14:50 but they hit the salt mine next door, and the whole lake went down the well bore into the salt mine. Nobody was killed, but there's some amazing video of barges going into the hole that formed,

15:02 and now that lake has this deep pit that links into the salt mine. Oh my gosh It's all flooded.

15:09 This has been working out this technology has led me into rabbit holes of data that I never would have thought about. Yeah, and YouTube it is. So what do I research to find this YouTube video?

15:21 Look up, I'm trying to remember the name of the lake. It's Louisiana salt mine disaster. Look up that and that should be able to get you to the video. It was a Texaco rig. What was the name of

15:33 the lake? Yeah, I'll remember the moment. fascinating. It's amazing. AM. was amazed that salt bubbles up, and I guess you have to remember in geologic time, rocks can be a little bit like

15:44 liquid. Well, and the thing is the salt is lighter than the rock. So it's just like literally have like bubbles of oil coming up through the water when you mix up a salad dressing. You see that

15:55 same thing of the lighter fluid right into rise through the heavier fluid. Yeah. And I think the other thing you indicated is, you know, the reason the time is now is because that the drilling of

16:07 shale wells have allowed us to have bigger bore sizes. Well, what's happened is the surface, the drilling rigs have become stronger. Okay. You know, we're now, I think the, I know the

16:19 worldwide, I think it's a five mile lateral has been drilled. So with the shale well, what you do is you drill down and then you turn the drill bit and drill out to the side. Well, we started out

16:28 drilling one mile laterals, one mile sideways And now I know worldwide, I know they've drilled five mile sideways. And I think in the US, I think we're up to three or four miles. I can't remember

16:38 the number exactly, but the farther you drill to the side, the more horsepower the rig has to have, because you've got to turn that drill bit and you get the resistance of all the pipe and the hole

16:50 that you've drilled through. So the more you have, the longer you want to drill, the bigger the horsepower of the rig. So we've now got rigs that have a lot of horsepower. So that lets those rigs

16:60 be able to drill large diameter well boards straight down into the salt. So that's one of the challenges with pump storage hydro. You don't want to lose as the fluid flows through the pipes, which

17:13 in these case are going to be the well boards. You don't want to have pressure drop. So you want this bigger hole, bigger pipe is possible to reduce that pressure drop because any pressure drop is

17:23 lost electricity. It's wasted electricity. It reduces your efficiency. So we can now drill 36 inch, 40 inch big well boards that will let us do these type of projects.

17:36 In the 1960s, we drilled a couple of wells that were four-foot, five-foot in diameter, but those were science experiments done by the government. But now we've got the rigs where we can do it

17:46 consistently. In fact, that was one of the concerns I had when I went to the Solution Mining Research Institute, Carrefritz in South Dakota, because I'd run the numbers and I was like, Oh, my

17:54 God, normal oil wells are eight-inch, 12-inch. I'm looking at 24-inch or 36-inch, and I'm going, Whoa, that's a big well bore And after I'd done presenting, there's what's called the Louisiana

18:06 offshore oil port. These guys run a, there's an oil rig that's an old rig that's offshore that a tanker can pull up, unload its oil, and then they take the oil in shore through pipelines and they

18:17 store it in salt-dome caverns because they want to unload the tanker as fast as possible and get him out and then they ship the oil slowly off to refineries, and the lead engineer for them came up to

18:28 me afterwards He said, Yeah, you're worried about those big well-bores, I drill those all the time. It's like a standard pipe. And at that point, I realized everything I need is off the shelf.

18:39 There's nothing racking at the moment. Interesting. What are some of the risks associated with the technology that you're still working out? So the one risk we're still looking at is corrosion. So

18:52 you've got a saturated salt brine. And the salt dome cavern operators, they've been dealing with saturated salt brines for years, but they don't move fluid very often. They'll fill the cavern once

19:02 a week, or for our food once a month. They don't move fluid daily. We're gonna be moving fluid daily back and forth through a hydroelectric turbine. So one of the grants we have pending is for us

19:13 to work with Texas AM's College of Engineering. They've got what they call their Material Science Engineering Group. And we've got a grant pending that'll let us get with them and have them do a

19:25 metallurgy study to determine what is the optimum metallurgy that we need. We've also got a hydroelectric turbine vendor teed up and ready to go so that. as the Texas AM guys go, well, we're going

19:35 to test the metal X, Y, and Z, the turbine vendor can go, yeah, well, I can't make a turbine out of Z. So forget that throw that one out. So we're ready to do this work. We just need

19:45 financing. We need the funding. The other challenge is the market. The way ERCOT

19:53 is set up as a as a as an energy market doesn't help long-duration energy storage. It's all through arbitrage by low cell high And that is a market that's a market that fluctuates a lot, so we don't

20:06 have a constant revenue stream at the moment.

20:10 And that's true for all the long-duration energy storage solutions out there. The market is still developing. And until the market fully develops. Now one of the things that just happened like two

20:21 days ago, the California Public Utility Commission directed Kaiso, the California grid operator, to get long-duration energy storage by some long-duration energy storage, which in California's

20:33 case is going to be. conventional pump storage hydro. That's the first time we've seen somebody actually go out and say, you will go get this. We've got 22 gigawatts of pump storage in the United

20:45 States. It was built mainly in the 60s, 70s, 80s, 90s in that timeframe. And it was mainly built in conjunction with nuclear power plants. Once you build a nuclear power plant, you want to run

20:55 it 247. You do not want to, you want to make as much money as possible off that thing. And a nuclear power plant runs at its best when it's running at a constant power output. Probably that is

21:07 consumer demand is not constant. So at night, we need less electricity. So the nuclear operators are like, well, what are we going to do? And they built a lot of pump storage hydros. So they

21:16 charge it at night and then discharge it during the day to hell out the nuclear power plants to be more or what they call base load more, running full power output. One of the things we're seeing

21:27 internationally right now is China, has built 50 gigawatts of pump storage hydro. They've surpassed us only in the last 20 years. And they've got another 87 gigawatts in construction. So China has

21:40 made the decision that they're gonna invest in pump storage hydro and renewables. People talk about how they're building more coal power plants. They're building a lot more renewables and they're

21:50 building the pump storage hydro to go with it because they recognize with renewables, with the variable variability of the renewable, you need a long-duration energy storage to go with it. Now, in

22:02 the US, we're not doing that. We're using tax incentives, we're encouraging stuff, but we're not investing in long-duration energy storage like we should. If you look right now at the Department

22:12 of Energy,

22:14 and don't quote me on the numbers, I think I'm probably gonna give you the wrong numbers, but I think it's like 9 billion for hydrogen, 8 billion for carbon capture, 3 12 billion for advanced

22:24 nuclear The Department of Energy is only spending half a billion dollars on loan duration energy storage. And so, you know, these are big, high capital projects. So as a result, we're not, we

22:35 don't have any long duration energy storage and construction, any pump storage and construction at the moment. Now this California directive is going to change that. There's a number of projects in

22:44 California that are shovel ready, ready to go. And we'll see what they do. Yeah. And I think this is like the challenge we constantly come back to is the on the energy trial, am I right? For

22:54 years we've focused on how do we try to get lowest cost, but not necessarily prioritizing sustainability, decarbonization, and so the mechanisms in New York just don't exist for them to value.

23:05 Well, but think about it. For a long duration energy storage, you're running on arbitrage. That means you need cheap electricity prices when electricity is not in the game. And you can't divine

23:14 long duration how that's different from a battery, yeah. So lithium ion batteries are one to four hours. Departmentarity defines long duration as eight hours or more. And then there's a new term

23:23 that's being used called seasonal storage, which is like a hundred hour duration storage. So if you could store one megawatt,

23:32 of one megawatt electricity, you would be what's called seasonal storage, form energy batteries, the iron air batteries, those are what they are, what we're thinking of as seasonal storage. And

23:41 is the idea that you would store that for, like you've built it up over a month and then why is it called seasonal? Okay. Well, if you look at the - 'Cause it's 100 hours is not a season. 100

23:49 hours is in a season. What you'd look at is during the, for ERCOT, what we have is we have a huge summer demand. We then have these winter storms to give us these massive sharp peaks, but our

24:01 spring and our falls are very mild. We use maybe 60 of the electricity we use in the summer during the spring and the fall. So in the spring and the fall, you would charge these 100-hour batteries

24:12 up to be able to deal with the winter peaks and with the summer, the massive summer. And you still might only need 'em for like five or 10 hours in those peak periods.

24:24 But you're taking advantage of the fact that power might have a negative cost at some point. I looked at how the grid would operate if we took all the coal and natural gas offline, and I needed two

24:32 types of storage. I needed a daily storage to move solar from day to night, and that was the underground pump storage hydroelectric. I modeled that as a solution there. And then you needed a

24:45 seasonal storage to take all that excess solar and excess wind in the spring and the fall and move it into the months of the summer and these winter spikes as well. So anyway, we've got it. So

24:57 that's what department energies is. They define batteries as one to four hours, short duration. Long duration is eight to 24 hours or longer. And now we're starting to see more of this definition

25:09 of seasonal being a hundred hour plus. And I forgot what the original question was before that. The question I think what brought us down this path was how government spending is being allocated for

25:21 storage. And there's clearly priorities around hydrogen, nuclear and others that are expensive. And I guess the question I'm going to at this is, storage is a solution, but we're not deploying

25:31 resources against it. And is that because there's too much faith or trust in batteries or is there an education challenge at the policy level? I think the question of it is what we, the difference

25:40 you have is you have China who is a communist country is not as market-focused, but they'll take a 20-year view. They'll look and go, yeah, in 20 years we're gonna need long-duration energy

25:51 storage So let's start building it now. The United States is very market-focused. We look at what the markets do. So what does the market need to do? We need to get to a point where the arbitrage

26:01 value, the difference between the low price of electricity during the day and the high price of electricity during the day is far enough apart where storage becomes valuable. And we're actually

26:11 seeing that in ERCOT. Last year, ERCOT, if you had a 10-hour long-duration storage, you could have made62 per megawatt hour Now most of this technologies are running at the100 level.

26:23 The Department of Energy has a target, they want to get the cost down to where a50 per megawatt hour income would be financially economic

26:33 for a long duration energy storage. Caverns in that50 range. So last year we saw62,

26:39 but value, batteries were getting like200 during the day. If you had a battery and you could find that by electricity you're in the cheapest one an hour during the day and sell during the most

26:49 expensive, over the year you'd have made over250 per megawatt hour.

26:55 And that's why we're seeing a huge deployment of batteries right now, they're economic. But by the more batteries deploy, then that they are starting to take care of those peaks and actually the

27:06 arbitrage value is coming down right now. So you want the arbitrage value to be high, but that means the electricity prices are volatile But for the consumers, that's not good. So to get to a

27:19 market that needs long-duration energy storage. we've got to get to a point of volatility in our electricity pricing that will make the consumers miserable. So in the long duration - That's not your

27:29 goal. That's not my goal. That's why I'd like to see us building it now. Yeah. And within the long duration energy storage community, there is now discuss of storage as transmission. You'll hear

27:40 that phrase. And what they're saying is they want long duration energy storage to be funded like transmission lines are funded. It is a benefit to the whole grid So the whole grid should pay for it.

27:52 I've seen one proposal where they were like all the solar and wind guys should all be chipping in a dollar per megawatt hour, they should be paying like a dollar per megawatt hour tax on all their

28:02 electricity to fund long duration energy storage to reduce that volatility.

28:08 But we're not seeing any support from that from the Department of Energy right now. I mean, they're talking about it. They're thinking about it, but we're not doing it. And I think that's

28:16 probably one of the next steps if we want to avoid the volatility to the consumers. going to need to get to a point where there is some sort of market mechanism to encourage long-duration energy

28:27 storage.

28:29 We're getting batteries right now, we're getting more batteries, the batteries have helped out a couple times this summer with our COT.

28:36 But I think we're going to need more than that in the future.

28:40 Yes, it's more like a market mechanism issue and that's also where we need innovation as we're moving to more renewables and we're going to be dependent on more storage. But I guess back to the

28:51 question of what you said earlier, our government is putting on a lot of funds on other renewable technologies, but unable to see the value of pump storage, long-term duration. Carbon capture and

29:05 hydrogen, the oil companies have been advocating for that because they see that as a mechanism to clean up their industry and help them remain in business. So there's no one lobbying for this

29:16 There's no we're lobbying for long-duration no one's no one a legacy business. That's really yeah Right. It's disruptive. I would say disruptive is in the technology sense, it's disruptive. Yes.

29:28 I would say long duration energy storage is more like a giant shock absorber for the grid. It's a way to smooth out the grid. And if you were building a bare-bones car, the shock absorber is

29:38 probably the last thing you put in, although the guy driving the car would really like you to put it in immediately. So, yeah, we all like carting over here Are you ready to lead the

29:49 decarbonization charge? Energy Technexus is your platform for growth, offering unique resources and expertise for energy

29:58 and carbon tech founders. Join us at energytechnexuscom and start building your Thunderlizard. So, in terms of your fundraising journey, I know we talked early, I guess, a year ago, when you

30:10 were exploring different types of capital and I think in your introduction, you talked about pursuing grants. Is that been your primary focus? We spoke to a lot of investors. The challenge is the

30:24 long duration of the storage is the long-term play. It doesn't have a high rate of return. If you have investors who are used to software companies and to other stuff where you have 10, 20 return

30:34 on investment in a rapid manner, that's not what we're working on right now. We're working on something that's more of a utility play. It's a lower rate of return over a longer duration.

30:47 And the other thing I heard from the investors wasCome see us when you've gotten some Department of Energy funding. They want to see that DOE funding to not only de-risk the technology, but to give

30:57 them a good feel for it. I mean, a lot of these guys are not engineering experts, so they want to know that somebody else's Department of Energy, in this case, has essentially blessed this

31:06 technology and said, Yeah, this will work. So that's what I was hearing from a lot of the investors, a lot of the energy investors who have oil and gas experience, because I really think this

31:16 technology because it utilizes drilling. It utilizes seismic studies of the salt domes. It has a lot of potential. I mean, except for the hydroelectric turbid, everything else is right off the

31:26 shelf from an oil and gas technology standpoint. But at the moment, I think they need to see that de-risking. And I'm of the mindset now where because of how the markets are going, I think we're

31:39 probably going to see a market. Natural gas prices have got to get up to3, 4, 5 per MCF. And then I think the market will form So at the moment, I think I need the grant funding to do the

31:50 engineering to get position to build a demonstration unit. And then at that point, once the natural gas prices go up, then we will see a clear market for a long duration storage.

32:02 And first, so I think you mentioned already for some of these grant fundings, you're looking for partnerships with universities. Actually, that's not the problem at all. I have Texas AM wants to

32:12 work with us. Oak Ridge National Laboratory, Argo National Laboratory, send the National Laboratory. plenty of the technology suppliers, the national labs, the universities that want to work

32:24 with us, the challenge is somebody needs to bring some money to the table, and that's what we're lacking. So for the grants, like, are the grants required matching funds that you've been looking

32:34 at, or are they pure grants? So we're looking at the pure grants at the moment. SBIR, STTR, some philanthropy grants we've applied for So that's what we're looking at at the moment. Matching

32:48 funds later on, yeah, we'll do matching funds too, if we need to, but at the moment, we're looking at the pure grants. Yeah, and tell us about how that process has been in terms of identifying

32:58 what grants pursue, applying for them. So that's been a little bit of a fun thing. So what Department of Energy does is they come out with these funding opportunities, and the funding

33:06 opportunities are, they're usually looking for something. I mean, I've seen them with funding opportunities We want to find an opportunity for floating solar. Okay, well that doesn't do me any

33:16 good. So the STTR and SBIR grants, they have a list of priorities. They just came out with a list of priorities, but it was focused around nuclear, fusion, some biomedical stuff. So nothing on

33:29 energy storage. There'll be a second list released in November. I'm hoping that there'll be some topics on there that we can apply for. But that's the thing is you've got to see where

33:41 the funding providers, National Science Foundation, Department of Energy, and these philanthropic organizations, they're looking for something. And if that matches up, you can apply, but if it

33:51 doesn't match up, well, then you're waiting around.

33:55 But it's fine. I mean, that's the way it goes. I mean, they have interest, they have ideas, they have thoughts about where they think the economy, where the technology needs to go, and that's

34:03 where they're looking for.

34:06 Yeah, and I'm wondering if that also requires kind of exposure of this technology to the DOE, who's then deciding, it's not. what Jason you said earlier is like the lack of knowledge too, right?

34:17 Like not knowing enough about technology. Yeah. And it's also the fact of you need a champion. You need a champion within the organization. I mean, I was in an oil company for 16 years. If a

34:26 project did not have a champion, the project died. I mean, that was just the way it was. And you'd have a guy who was like, oh, we want to drill well here. Well, unless he could convince

34:34 somebody up in the management, yes, this will produce oil. We never drill the well. Yeah. So how do you develop those champions within these government organizations that have you engaged with

34:44 them? So two weeks ago, I was in Bellevue, Washington at the Energy Storage Grand Challenge Summit meeting in Bellevue, met with a lot of the DOE people up there, talked with them. I'm going in

34:57 two weeks, I will be in Los Angeles at the Long Duration Energy Storage Consortium workshop. That's the, so Department of Energy has funded the national labs to form the consortium to work on

35:09 long-duration energy storage. and they will be holding their first workshop in Los Angeles, November, September 10th and 11th, and I'll be over there. And I'm actually gonna get to speak.

35:18 They've asked me to speak on my technology. So you just keep working the conferences, keep talking to people, keep trying to move the ball forward and get more people to know about the technology

35:29 and interested

35:31 with the conservative energy networks, some of it that was just held in here in Houston. I got a chance to speak with Commissioner Glott shortly I spoke with Congressman Weber. I'm trying to get

35:43 them to things that are thinking about long-duration energy storage. And I think the lesson here is like, even with government grants, there's still people who are reviewing the grants. They're

35:53 trying to execute against a strategy that maybe they have internally for how to deploy capital. And when you have this kind of vision for something that's long-term, you do have to educate and

36:04 inform. And that's half the battle of being an entrepreneur, is teaching the market This is why the future. when I first started, when I first started talking about this technology, and very way

36:15 I'd have somebody go, What's a salt dome? You know, if you're not in the Texas, Louisiana, Mississippi area, you probably haven't heard about salt domes. So that was the first challenge I've

36:24 had. And then talking about doing it underground. We've had some people times what we've had to explain the technology to people. And that's understandable.

36:36 Also, talk to us a little bit about your entrepreneurial journey because you've spent most of your career working for a mid-size oil and gas company. So my career was split in two areas. One was

36:48 problem solving.

36:52 They would walk up to me and say, This isn't working. Please figure out why. So I learned how to do a lot of problem solving. And the other was doing a big project which is we found oil and gas

37:00 here. Here's a big pot of money. Go build us a platform. Go build us a way to get the oil and gas from the wellheads to the cash register.

37:09 And, in fact, you and I, Jason, had a conversation about what, two and a half years ago? Maybe. Yeah. Well, I said, I could build this thing in my sleep, and you said, No, your job isn't

37:18 to build it in your sleep. Your job's a convince people to give you money. That's not a skill I've developed. I'm still working on that one. And

37:29 I just said, I can build this thing in my sleep. I've got the design plans worked out. I know all where the roadblocks are going to be. I know the technology path It's the financial path. It's

37:39 the how do you convince people to give you money path? And that's the challenge I'm having at the moment. That's why we need a grant to get us started, to get us moving in that road. One of the

37:50 things about the grant that I need to understand is the grant not only gives you money to work with, it gives you credibility. And that's the whole thing where the investors want to see a grant.

38:01 They want to see some money being given Not only that, the salt suppliers, the people that buy salt on the market. But, you know, if I go talk to them right now, it's, you know, they're like,

38:11 Who are you? If I'm like, Oh, yeah, we have a grant from the DOE to develop this technology. Okay, now they're going to pay attention. So the grant not only gives you money to work with it,

38:20 gives you that necessary credibility. Because let's be honest, there's some people running around in the long-duration energy storage market. I'm sorry, they're selling a technology that can't

38:29 work. And we've seen a couple of those coming in the Houston area So we do have that issue, I mean, Cylindra with the solar panels, Theranos with the medical technology. We've seen some people

38:42 get a lot of funding and then burn out. And that makes the investors very worried, which it should be. Yeah.

38:50 But I think one of the questions we're going to get to is what made you take that leap to go from industry to say like, is it the problem that you need to solve or what? It was so, and this leads

39:02 into the book, I'm sure. Four years ago, I was working a project, it was a difficult project, and I just realized I'd had enough. I'd done enough in the oil and gas industry.

39:15 There were questions about climate change, questions about a lot of stuff, and I stepped away from the oil and gas industry, because I, A, I needed a break, and B, I needed to answer those

39:24 questions. So actually, I started doing research on temperatures across Texas, across the Midwest, looking at all the temperature data, trying to figure out, is climate change real or not? I

39:34 mean, we keep being told believe in climate change, but if you're in the oil and gas industry, you also have people telling you to believe that it's a hoax. So what do you believe? Well, I don't

39:44 want to believe I want the data. I want to look at the numbers. This goes back to the whole thing of the oil companies use me as a problem solver. And what I learned very quickly was, when you go

39:54 into a facility that's had a event, the operators, you're going to walk up to the opera and go, What happened? And he's going to go, I don't know.

40:04 And it's A, 'cause he doesn't know or B, he doesn't wanna go to jail or he doesn't wanna get fired. So you need to go pull in all the data to understand what happened. And then you can ask the guy

40:15 intelligent questions, did you open that valve? Did you close that valve? What did you do? And then you can figure out what happened. So same thing with climate change. I went and pulled down

40:24 all the temperature data to see are we having climate change? And the short answer is yes we are, but it's not consistent And then doing that led me into other issues of immigration, taxes,

40:40 gerrymandering, ranked choice of voting, all of this stuff. And that led me to write the book, Fixing America. Do you want to show the book to the camera over here? We gotFixing America. There

40:50 we go, for YouTube, yeah. So that led me to write the bookFixing America. It was published January 30th of this year. Congrats

41:00 It was a lot of data, a lot of research. And that was helping me to come to grips with leaving the oil industry. At the same time, I was looking at the electric market, the energy markets, and I

41:13 went, oh yeah, long-duration energy storage, that's the way to go. And that led me to start working on how do you do long-duration energy storage, which led me to found cavern two and a half

41:22 years ago. So that's what the journey was. It was, I got dissatisfied with the oil industry. I got, it was, and I'd worked 32 years straight. And no break between jobs and everything. And I

41:38 was like, I'm done. But yeah, it was, it was, it was an interesting journey. Writing the book forced me to look at

41:47 beliefs that I had been taught that I'd come to believe and come to accept. And then when I went to find the data to support them, I couldn't. And that was really shocking when you're like, you

41:58 know, when you're raised a certain way and you're taught, this is how things are. And then when you go to find the data, you're like, Oh, this is not how things are. It was a really interesting

42:06 experience. It was kind of a search for the different data that led you to all these different topics and based on what you found and what you didn't find. So if you're looking in healthcare, one

42:15 of the things you see is high rates of obesity, diabetes that have increased in the last 60 years. Well, why is that? Well, then you start looking at the food industry. Well, 60 of our diet is

42:27 now ultra, what's called ultra process food, Twinkies and stuff like that, where the food has been essentially processed to the point of not really having any link to the original food stuff it

42:38 started from. So once you get those links together, you're realizing, okay, well, why did that happen? And with the ultra process food, you realize that in the 1970s,

42:50 Russia was having these famines. So the Nixon administration, the head of secretary of agriculture, a guy named Earl Butts, went to the farmers and said, Go big or go home. grow fence row to

43:03 fence row, I want as much as you can grow. And they changed how the federal subsidies worked to encourage more crop growth. We were talking about how the farm land, the agriculture industry has

43:15 transformed to generate more crop yield. Yep. So that happened is, that was the key of

43:27 creating these massive crops growth. What happened then was Russia recovered from its families Well, now you've got all this extra corn. Well, what are you gonna do with it? Well, hey, there's

43:36 a new food industry here. They'll take that corn, they'll process it, they'll turn it into Twinkies or whatever. Conflicts. I don't mean it's two by Twinkies, but anyway, and everybody's ultra

43:44 processed foods are. It also was the start of the whole cattle market where we now use feed lots. So whether we, where we used to have cattle on open range, now they're in a feed lot and they're

43:56 fed that corn. So that changed our whole food industry. It wasn't done intentionally, it wasn't done with any conspiracy theory or anything, it was just how factors came out. Now, here it is 50

44:08 years later, we have higher levels of obesity, higher levels of diabetes. It was a, it was that type of links of finding how one thing linked to another. It was a really, it was an amazing

44:18 experience, yep. I think the

44:23 weird challenge of American innovations were really good at making a lot of stuff very cheap And once you figure out how to do that and make things very cheaply, then you gotta find a way to sell it,

44:36 right? It's kind of a race to the bottom on cost, be it calories or, you know, kilowatts or barrels of oil. And,

44:47 you know, it's amazing what people come up with too to figure out how to get it consumed. But we struggle with what happens after, right? Yeah, it's like we're innovative. Yeah, very innovative,

44:59 a little crazy how innovative we are. It's the knock on effects. It's the con for seeing consequences that surprise us. But you can't blame them either, in some ways, 'cause how would you know?

45:07 Yeah, but I think at the end of the day, like with climate change too, it's us being smarter as humans, right? And looking at, like you're saying, looking at 20 year view and understanding like

45:17 what are going to be the consequences of what we're doing. Let's talk about climate change for just a moment. So I view climate change as an equation. And the equation is how much energy does each

45:26 person on the planet use, how much CO2 do they release, how much waste heat do they release, times the number of people on the planet, that's climate change. In 1960, we were three billion

45:36 people on the planet. Now we're over eight billion people. And a lot of those people living in China and India have massively increased the amount of energy per person they use because their

45:46 lifestyles have become so much better. They're moving toward a more Western lifestyle. So we can say, oh, we need to address climate change and we can attack the fossil fuel companies. It is the

45:57 consumers and the increasing populations that are really the factor behind climate change, but that's not what we want to talk about. It's so much easier to cast the oil companies as the villain,

46:07 and that falls right back into a basic Hollywood story. Yeah, do you, I think I saw, was it 10 years ago in the New York Times ranked policy changes that had the biggest effect on carbon output?

46:18 And number one was China's one child policy. It had the biggest impact on carbon production And number two was the fall of the Soviet Union because it slowed down the economy and the production, you

46:31 know, the Soviet production system. Yeah. And I think it goes to your point. The biggest challenge is people want stuff. Stuff takes energy and carbon. And so you either gotta have less stuff or

46:44 you gotta have less people. And no one ever wants to address the less people problem. In 2021, we saw cooling in some areas. Why? Because we had a massive drop in energy use in 2020 and the

46:54 lockdown actually had a direct impact. There were areas in India where the smog went down drastically. They could see five or six miles across the city. So that is definitely one of the impacts.

47:06 We've got to, and that's, it's a question of, we've got to recognize that population is an issue. And we've got to recognize that we have to be smarter at our energy use, more efficient in our

47:15 energy use. Yeah, I mean, 'cause at the end of the day, it's the American consumer step. Consume a lot more energy than anyone in India in China does today, right? It's just because of our

47:24 lifestyle. Yes, but their expectation is they want to catch up. Yes, absolutely. They want to catch up, right? Absolutely, but what kind of model are we setting, right? That everyone wants

47:33 to drive for the kind of lifestyle that we have here that is not good for the environment? In fact, not at one of the points to your favor is the US is 47 of the world population. We use 20 of the

47:44 oil. So

47:47 that's a thing that

47:49 we've got to adjust because now the Chinese and the Indians all want to use more food stuff.

47:55 And, you know, to that, I know you've shared these stories with us before at the energy techniques, but I, you know, we all often ask our guests about their kind of climate change story. And

48:04 you've been someone who's been in the middle of the eye of the storm, literally. Yeah. So talk to us about that, your experience of, you know, being in barrel and all the other hurricanes that

48:16 you've experienced and how that might have impacted. So I grew up in New Orleans I lived in New Orleans until Hurricane Katrina, Hurricane Katrina put six feet of water through my one story house,

48:28 came to Houston, had a house along Buffalo Bayou, was in the process of selling it when Harvey put five feet of water through that house. So hurricanes are something that insurance companies do

48:40 worry, don't insure anyone here willing them

48:44 I've told my wife I say this, you know, this. this house in Houston, we're in at the moment, we're probably going to want to be on a mountain somewhere because I've had enough of hurricanes.

48:52 Barrel went right over my house, I walked out and was in the eye of the storm. That's the second time in my life that's happened. The duration in May, I was actually walking out on Attic's

49:02 reservoir when that caught me out out on the reservoir. So yeah, I've had a lot of weather experiences. But I think what you can clearly see is that

49:12 the people that talk about we've had these massive climate events, we have had massive climate events But in my data research and everything, I found heat waves in the 1930s that killed thousands

49:21 and thousands of people. Because it was so long ago, we'd forgotten about it. So there's a lot of interesting data around the weather events and a lot of conflicting data, which is how I got

49:31 looking into it as much as I could. But yeah, I think what we've got to see is we've got to be smarter about things. North Carolina, we're seeing houses get swept off into the sea because coastal

49:43 erosion Coastal erosion happens. It always is going to happen. Um, we're seeing a lot more damage from hurricanes and people have been saying, oh, it's bigger hurricanes. No, it's actually

49:52 because more people now live in those target zones. And the thing we're seeing right now, which is going to be fun is, um, flood insurance. Some people in Florida having trouble getting insurance

50:04 and that's going to force people to, you know, flood insurance was something that was federally subsidized. And as a result, people could, could rebuild, they could live in a danger zone without

50:15 consequence Now we're seeing that change. And I think it needs to change because people need to understand the consequence. If you live, if you have a wonderful beach home and you're looking out on

50:25 the Gulf of Mexico, great, but you're at risk. Yeah. And you've got to bear the risk and not the rest of us. So let's, let's talk a little bit about Houston. How have you seen the innovation

50:36 ecosystem here evolve a few years? It's, so I came to a new, I came out of the oil patch and, um, working from a mid-sized

50:47 And we were actually talking about this earlier is that mid-sized oil companies don't like to be serial number one. They have enough risk that they're carrying, they want a proven technology. So

50:55 that was the thing I saw there. We saw a lot of innovation, we saw the shale industry, massive innovation there. But now that I'm outside of oil and gas and looking, working with the startups and

51:04 everything, you're seeing as a caution,

51:10 we need more money for the real young startups so they can try out their ideas so we can know whether it's valid or not. And we're not seeing that. I think we need more of that in Houston. We need

51:22 more capital that can be put at risk to help these new young startups to go. Is this storage system work? Does that new technology work? And it's hard, it's hard for these guys to do.

51:34 Do you think that's a

51:37 market challenge or a technology challenge? Because I think in some ways Houston will fund risk if it's about leases. or understanding where there's good land, and they know how to drill well in it.

51:49 Well, but I mean, so I think it's a question of, so like Sage, Fervo, Energy, those companies, they had good ties to the oil industry. A lot of them are ex major oil companies, executives.

52:00 So they had ties to access to funds and all that to help those get those technologies off the ground. But you see something smaller started where they don't have those personal connections, and

52:08 they're having trouble getting that initial funding. I think we need a fund that's in the Houston area that's an innovation fund that'll say, okay, I'll give you200, 000 to get you started. I'll

52:19 do to give you a little bit of money just to see what the understanding of, you're not gonna see your return on investment. I like that because you need that to be able to apply for the grant money,

52:31 right? To be able to sustain you so that you could apply for that two, three million dollar grant money that you need to actually get a demo. I mean, we have some angel networks in the area, but

52:41 they want a percent of the company, They wanna see a return on investment. they want a, a, a in goal. And sometimes when you're at the very start with the technology, you don't have that in goal.

52:51 I mean, you can tell a lie and go, oh, yeah, we're going to make millions. We're going to make billions of dollars, but you really don't know because there's some technical humps that you've got

52:59 to clear and you've got to get passed. We don't have good funding to get companies through those initial points. I think that's the one thing. Other than that, I think we've got a lot of people

53:08 working in this area. I think we've got, we've got energy technexists. We've got some other incubators in the area I think it's a good setup. Well, so one of the things I think you're hitting on

53:18 is there's a lot of prize money in the Houston ecosystem. Like, yes, there's the rice business plan competition. Only I think three or four Houston companies get to apply to that and you got to be

53:27 a student. I remember in New England, when I was there, you could spend your whole summer winning prize money and never have to go off and raise angel capital and still show up with 250k, right?

53:39 And that was between different prizes I did mass challenge, I did a clean tech open. And then there were additional grants that you could put aside that the state itself had funded and here it's

53:52 It's rare. Yeah, I think it's it's really just a little bitty the pitch contest. Here's5, 000 there10, 000 That's not it's not the 250 you need right That's not gonna get you to go sit down with

54:01 Texas AM and fund a metallurgy study You need bigger you need a lot of money to play that game. Yeah, so yeah, I think we do need more of that We need more of that initial Funding awards prizes

54:13 grants. That would be great But yeah, no, but there's a lot of people working in the area. I think there's a lot of recognition that the energy transition is going to happen

54:24 I Think we definitely are I think some of the oil and gas companies are starting to recognize that

54:29 It's not real that yeah, this is going to change Do so taking it aside a

54:35 little bit. Are there any hidden gems in the ecosystem that you've discovered? Oh Not really.

54:43 Um, and because that's the point of me, you know, we've been trying to make some headway in the area. I think they need to see again, it's the credibility. You need it. Once you have

54:54 credibility, doors open until you get that initial credibility. It's not really there. It's the challenge. As you were saying, the prize money, the stuff like that, you need that to get some of

55:04 these unknowns, these people who are, they don't have the oil company connections, the executive management connection Those guys and everyone's needing the help, yeah.

55:15 What is the one thing our audience could support you on in helping you meet your goals? Oh, I think the big thing is we need to make it, we need to get a long-duration energy storage market. Not

55:30 for me, but for everybody in that space My big concern is that we're going to have a situation where. When we need long-duration energy stored, when the electric grid reaches the point where the

55:41 volatility from the wind and the solar and where natural gas prices have risen to the point where we're seeing, we, the consumers are feeling the pain, you're five years away from getting

55:51 long-duration energy storage. So that's my one fear is that we don't start soon enough to avoid that pain. My thing would be if you think I'm right, write your Texas legislature member.

56:06 So we have what's called the Texas Energy Fund, we gave, we passed a constitutional amendment to allow the Texas Public Utility Commission to manage a fund to fund natural gas power plants. That's

56:18 fine, but where are they going to get the natural gas in 20 years? That's my question. Energy storage, long-duration energy storage is excluded from that at the moment. Write your Texas

56:29 legislature member, write the Texas Public Utility Commission, ask them to open the doors so that long-duration energy storage can be considered. for those funds as part of these new initiatives at

56:40 the Texas PUC and the Texas ERCOT people are developing so that we recognize that long-duration energy storage is the future. That to me is the big challenge right there.

56:51 And where can people come to find you on the internet? So, cavernenergycom is the website. We've got a little three-minute video, YouTube video that explains the technology. There's a way to

57:01 contact us through the website I will be speaking at the on-duration energy storage consortium in September 10th. The

57:12 book is available. Fixing America is available at Amazoncom. It's also about Barnes and Noble. You can also go to Process Bookstore and the Blue Willow Bookstore here in Houston and order locally.

57:24 Cool, all right. Yeah, and we'll have to bring you back on to talk in more detail about the book. Yeah, thank you so much.