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The Oil and Gas Startups Podcast showcases emerging technologies and tells the stories of founders, investors and industry leaders.
0:00 All right. Everyone today, we got a special guest. It's funny. Every podcast I do. I'm like, we got a special guest. But today's super special. We got my boy, Mike Umbro, the fucking legend
0:11 from Twitter. California's worst nightmare. That's right. I like that. I feel like I'm getting ready to go in the ring right now. That's a Bruce Buffy. Yes. And so, you know, we were just
0:22 talking before we got on the mic. We were talking about, we were talking about what's up, Jake? You want to? Yeah. You're in well. Yeah. We're coming up.
0:33 Jake making a surprise introduction into the podcast to dap up mic. How's it going? You too. But we were talking about the new wave event that we did in Horseshoe Bay back in 2020, 2021. And it
0:47 seems like so long ago that I forgot about it, but you just jogged my memory. And a story about that is you were up on stage
0:56 talking, I believe before we, were you on stage? Maybe I might have asked a question. You ask a question, yes, you ask a question 'cause I'm sitting next to Toby Rice, CEO of EQT. And he's
1:06 like, is that Mike from Twitter? He's like, Fuckin' love that guy. That's awesome. You know, back in the day, Mike, you used to make these videos and you'd be out off the coast in a little
1:19 boat making videos with these oil tankers talking about California's bad energy policy. Tell me a little bit about that so everyone can get some context of the social media work that you were doing.
1:30 Yeah, I mean, I just got sick and tired of listening to the propaganda from government officials saying, oh, this, that and the other about oils hurting you, oils hurting communities. And I
1:43 thought, well, this was sometime in the pandemic. I think it was 2020 where the supply chain backup occurred at the port of LA in Long Beach. There were like 80 container ships out there, dozens
1:55 of tanker ships My buddy lives in Newport and he has a Boston Whaler, sick little boat, he's like, let's go out there. I'm like, hell yeah, let's go out there. So we take it out of
2:07 Newport Harbor, go up, we park it in front of a tanker, and I'm just like, you know, spitting the facts, you know, South Coast Air Quality Management District says, this port complex is the
2:17 number one source of pollution in the LA basin. It pollutes more than all 6 million vehicles we have registered in Southern California Why are we transitioning our vehicles when these tankers and
2:30 these cargos are just pumping socks, knocks, diesel particulate? Who cares about carbon? We're talking about stuff that actually kills you or hurts your lungs over time if you're living in those
2:41 communities. Yeah. Those are kind of the things I was trying to just get out into the atmosphere and share with people. Yeah, I mean, when you look at bad energy policy, you know, the coast has
2:54 really bad energy policy, whether it's California or Massachusetts. really great work, but I think that's how I originally discovered you,
3:03 you know, I just did this dude on a boat driving around the oil tankers and I was like, that's fucking nuts. I love it. Yeah. People always tell me like, that was your best video. I'm like,
3:12 well, yeah, I'm like on a boat next to a tank. I was like, yeah, that was a hard that was high lift content. Yeah, I wish we had these cameras. Like that was iPhone. My buddy just tell me
3:22 it's all the best content is recorded on an iPhone. But I mean, the heavy lift was getting out on a boat and going out there. And so yeah, love that. You know, I think that that's how you
3:32 originally made your name. And that was that was great stuff. And so you tell me the reason I want you to come on this podcast today and we'll get to this in a minute is because I wanted to talk
3:42 about geothermal and ground storage. And we'll talk about
3:48 that. But let's talk about like, I don't know your background. Sure. I just realized that like I'm in this podcast like I don't know your background. Yeah, my point of The conception was that.
3:56 boat videos. That's a point that I know you, but tell me about your background real quick. Sure. Yeah. I think that's an appropriate way to discover me because I'm born and raised in San Diego.
4:07 I love the beach. I love going to the beach. I love being outside as we talk in the industry. We're all
4:18 environmentalists more than those outside of us might understand So I grew up San Diego, played soccer, volleyball, beach volleyball, that kind of thing, Southern California sports, went to
4:30 Pepperdine, studied economics again to be by the beach, good scenery, good school, left there. And I didn't know what I wanted to do. I graduated with a degree in economics and went into finance.
4:46 I was first at like a boiler room day trading set up in Mission Valley, like 8th floor. I'm like, I don't know how to stay trade, lost all my That went to Morgan Stanley. Got a taste of this big
4:59 corporation finance job. I was an analyst. They wanted me to be a financial advisor. I'm like, I don't even have my own money. I'm not going to do this whole money-raising deal for you. It's not
5:10 happening. That next job was at a firm called Bainbridge. It was a buy-side mergers and acquisitions shop. I had no idea about oil and gas before this job. We had a managing director that was
5:26 signing private equity groups to retain their fees, to go buy certain companies or source deals in different industries. I was assigned to the upstream EMP vertical. We had a management team in
5:39 Houston. I'm sitting in La Jolla. My job was to basically dial for production. I'm calling people in Texas, Oklahoma, New Mexico, trying to buy at this point conventional producing assets,
5:52 withdrawing upside. uh, that would fit into a master limited partnership type structure. This is back 2007. I love this. So you're the one essential Cali boy that's been banker calling us. Yes.
6:06 Yes. Guys, I love like call well, anything's for sale at the right price. I'm like, these guys are cool. Like this is the easiest cold call I've ever made, you know, every other vertical
6:17 you're calling like, no, no, no, you know, like, well, how much money you got? What, you know, tell me about what I only guess I mean, I tell everyone the most capitalistic people you'll
6:25 ever meet in your life. And you're right to that, though, so exactly. So that's how I felt and I, since 2007, I've stayed in oil and gas. I've, or energy, let's say now with geothermal, but
6:39 I left that job because I realized I think you have this kind of same entrepreneurial spirit. I'm like, I'm cold calling people. You're not teaching me anything. I'm setting up deals. The deal is
6:49 the most valuable part or the relationship, excuse me, valuable part of this deal. So I left and started FieldV Capital in my living room in 2008 when the financial recession hit. I'm like, no
7:01 one's hiring anyway. So I might as well try it on my own. And it took four years, but then by 2012, I had done a deal partnering a management team with a private equity group with an Eagleford
7:13 shale asset. I mean, I don't even think I knew that the shale boom was on. This was 2012. I'm just like, oh, there's a deal You know, you're just putting it all together. And it was95 million
7:27 deal, 96 million deal, and boom, it validated me. I felt like, okay, I don't need a big Morgan Stanley name above my door. I could care less about that. I don't need to frankly be in the
7:43 office 90 hours a week grinding for some managing director that wants to drive his Range Rover around and tell me what to do. And then it was just on, that this is what I'm staying here and doing it.
7:57 Yeah, that first one's important. That first taste, and then the private equity group tried to just hose me out of my fee. Of course. Their fee of course. Typical private equity, where's Chuck?
8:08 Chuck's out of the office, right? It wasn't Kate Anderson, it was not Kate Anderson I. won't name the firm, but it's like, dude, it's your agreement. I performed to the letter of the agreement
8:20 You don't wanna pay me because 2 of this transaction fee goes to your management success. And I'm coming in as the person that's sourced it and you're gonna have to pay me half. And it's like Narcos,
8:33 it's like a drug. I mean, they'll just cut you out and they don't care because they know that they've got a billion dollars under management and all the legal backing and come sue me, which I had
8:44 to do. And I got 10x what they offered me originally, but not what they owed me. But it furthered that drive of like, okay. Okay, several kinds of stories like that. Same story, yeah. But
8:57 then that's what led me to want to be a developer because I'm like, okay, I know I can do this. I know I know how the money thing works. And if they're going to cut me out, why am I going to just
9:07 give you cheese? Like I'm going to figure it out and source the deal and be on the development side, which turned out to be one of the most costly financial decisions of my life to date
9:21 Until we get permits,
9:24 I
9:28 mean, but that's where I'm at today. So let's talk about this entire permitting thing because do you've been fighting the permit battle forever? Yeah, 2017, 2017 is even longer than I thought.
9:37 And so, one, what are you trying to get permits for? Two, why
9:42 has
9:45 it been so challenging to get permits? Or why are you not getting permits? Give me the full swing. two major permit pathways, one, drilling wells. So CalGEM is our railroad commission. They
9:55 give you the permit to drill and two, underground injection control. So to re-inject brackish water back into the reservoir it came from, it's not like the railroad commission will give you SWD in
10:09 a couple of weeks. It's, you have to prove there is no USDW, no potential aquifer to foul anywhere remotely close to your project, which we are cited in the middle of nowhere. If we were in Texas,
10:22 we would have permits in weeks to months. Yeah. California, part of the Y is, we're in Kern County, western edge of Kern County, about an hour's drive west of Bakersfield. Remote feels like
10:37 West Texas, but there's actually hills on the horizon. Yeah, yeah. Oil country. But Kern planning and natural resources department, tried and is still trying to institute a county-wide ordinance
10:53 and an environmental impact review that effectively allows any oil and gas operator to get permits ministerially. So you just go to the counter, you pay, it's expensive, you pay for all your
11:06 mitigation, air, land, impact, all that, and boom, the county gives you the drilling permit as lead agency is what they call lead agency for meeting the California Environmental Quality Act CEQA.
11:21 So I mentioned that a lot and the federal side is NEPA and CEQA is more stringent than NEPA if you're dealing with federal land. So all that to say, the current planning and natural resource
11:35 department trying to take over this permitting as lead agency, it's continually legally challenged by groups like Sierra Club, Center for Biologic Diversity. uh, friends of the year, whatever,
11:48 you name an NGO, they'll find something to complain about and file a lawsuit that shuts down the county from efficiently processing permits. And then it gives our state agency, which is shadow run
12:04 by Sacramento, who has said, we want to phase out oil and gas by 2040, which actually means now we're not permitting any new drilling now. Yeah. So that's what's happening in a nutshell. Yeah.
12:20 You know, it's kind of a, um,
12:24 I was listening to Ted Cruz one time and he articulated this really well. He said, you know, there's only one place in the United States and it probably isn't just one place, but this point stands
12:36 that fracking could have been invented in Texas. He's like, what other place in the world could you say, have we're going to drill a hole underground under houses and we're going to send explosives
12:44 down and blow it up. And I thought about that and I was like, man, just the ability to be able to build and get permits in a timely manner is so important for economic activity and for progress. I
12:59 also do think that there's a place for regulation, I think, you know, like the whole issue that we're having in Texas with PA, I mean, it's just not acceptable, right? And so how do you balance
13:10 that with, hey, we need regulation and oversight, not too much regulation and oversight where we can't move and do anything. And so you have this really extreme in California, but the way that
13:22 you just laid it out, you know, from a county perspective to state perspective and all of these third party groups that influence that and it kind of builds its way up to the top. I mean, really
13:32 just clearly articulates how you can't get shit done, just because there's so much outside influence. There is. So there is. Yeah, that's gotta be frustrating. It's really frustrating, Now,
13:44 we've gone through the undertaking of doing our own environmental impact report, and we will do all of that in-house breaking away from the county. You get your EIR certified, and then you
13:56 theoretically, the agencies permit you. And we've also done work with the national labs, which we can talk about, but - How do you, if you're doing this environmental study, yourself, you have
14:07 to work with third party to get that verified, how does that work? Yeah, you're doing everything, your bugs and bunnies. So you've got biologists out there surveying for endangered species,
14:19 flora and fauna. We're looking for kit fox, burrowing owl, blunt nose leopard lizards. So I see the lizard deal popping up in West Texas now. Now that that species is listed, that's gonna, it's
14:31 kind of the playbook is being run out in West Texas. So you've got biology, you've got, you're looking at all your water quality data Do you have any aquifers that you could file USDWs? We don't.
14:46 You look at surface use, you look at air impact, you look at proximity to homes, sensitive receptors is the big word now in California. And it's a one to two year process and three to500,
15:03 000 at the end of the day. And it's your statement that says boom. Yeah, it's not cheap. No, it's not the things that you have to do I love that you brought up the lizard thing because the lizard
15:14 thing is a clear case of hey, there's some outside influence that's trying to make this a bigger deal than what it is. All the people in West Texas, trust me, from West Texas live there. Zara,
15:24 when the lizard thing like really started becoming something, everyone in West Texas says fuck that lizard. Right, right, right, right. Yeah, we'll skewer it and barbecue it. Yeah, have some
15:33 snacks. You know what's, did you see this? I know you saw this article about the Joshua trees and the solar farm. Yeah, absolutely. It's fucking crazy. Exactly. You know, one, it's fucking
15:42 crazy to cut down thousand plus Joshua trees to install a solar farm in the name of saving more Joshua trees. Right. But how do, if oil and gas wanted to do that, if you were saying, hey, we
15:56 wanna develop the sacred and we need to cut down a thousand Joshua trees, you know, what would be the reception for that? Oh, it'd be insane. I was talking to my wife on the way to the airport
16:05 yesterday. I'm like, Sacramento and now in these other states that it's the climate crazies. We're environmentalists. We will go out and drill on a pad so we don't put wells everywhere. We'll put
16:17 12 of them on one acre in our case and we'll survey for the lizards. We'll protect them. We'll put habitat aside for them, but to your point, I think it's more like 3000 of these Joshua trees or
16:29 something, it's an insane number. And if I heard someone say, I haven't verified it, but if someone in that Mojave area wanted to take one out like in their driveway. for their house to make room
16:41 for an expansion, whatever. They have to pay15, 000 a tree. For this solar developer, it's500 a tree. So there's literally separate rules for these flat panel photovoltaic, you know, solar
16:55 providers who are ruining our grid. If someone's getting paid on the back end of. Oh, yeah, of course. And it's, you know, it's technology that's destabilizing our grid. Then you need the
17:05 lithium batteries for quote unquote, storage, which is one to two hours. Nobody's talking about nobody's talking about Otai Mesa, San Diego. There was a 250 megawatt battery park on fire for two
17:16 weeks. Yeah. And this was in June. Yeah. This was like a couple of weeks ago. You know, I'm not like, I'm actually a huge fan of residential solar. Yeah. Even like, you know, Chuck has a
17:27 funny story that I like to point to all the time because people are like, oh, yeah, when's the payout on that? I'm like, I'll actually pay a premium. If you're in a position too, I'd pay a
17:34 premium to have solar and battery at my house energy sovereignty. I just want to be able to control my power supply. And Chuck's dad, O'Mann Yates, got a solar on his house. So Chuck was busting
17:47 his balls like, Dad, that's never gonna pay out. And anyways, Winterstorm, Yuri hits. And Chuck's without power, he gets where he goes to. He goes out to his dad's house and it's like, I'm
17:57 sorry dad. I get it now. And so, I do like residential solar. I think that, I do think that industrial-scale solar does have a place, but you look at these storms that have hit Texas last couple
18:11 weeks, absolutely destroying solar farmers with hail. I mean, just ripping through them. And everyone's responses is always like, Oh, well, entrance, yeah, well, hey, entrance costs go up.
18:23 The cost to build out these projects goes up and entrance isn't just free. And so, it'll be, I
18:34 agree with you that, Like, I think Texas's problem is that the rate of which we've built out wind and solar is the problem. We're building those out too quickly and not investing in enough capital
18:48 and thermal generation or nuclear. I think that that's the main problem. And it's interesting looking at California with this whole duck curve situation. Like, I saw some interesting graphs the
18:58 other day where with batteries coming online, it's taken away from some net gas, peak, or plants And it's like, batteries are coming online. But it's like, what happens when you have 12 hours
19:11 without power? Right. Right.
19:14 It's really expensive. So
19:18 I think that all of these things have to be balanced. And I am pro-energy. I think that every energy source and technology has a place. But it's about being very thoughtful about - Right Case A,
19:32 case B, case C. Scenarios exactly what happens because I'll tell you I lost power at my house last week for three hours With the high wind storms. That's fucking irritating. It's hot pretty quick
19:45 You know just people aren't going to They're not gonna they're not gonna deal with no no power. They don't want that. Yeah, and so
19:51 You know, let's transition that into the storage play because I want you I want you to school me up on What's the technical term for geothermal storage? There's like so the the the easy term is
20:11 geotess It stands for geological thermal energy storage. Okay. Got you so geotess Well, you know, it's funny, and I'm gonna I'm gonna throw myself under the bus here. Yeah to make my wife happy
20:24 but Julie when we were doing Fuse whenever it was a year ago or so She's like, Hey, should we have a panel on geothermal storage? And I was like, Geothermal storage? She's like, Yeah, someone
20:38 brought that up. I was like, That's not a real fucking thing. That's not a real thing. And she's like, No, I think it is. I was like, No, it's not. And then I started seeing you talk about
20:46 it. I told Julia, I was like, Okay, if Unbro's talking about it, it's
20:51 something to it. So anyways, I'm open-minded. I'm open to hear about anything. And so one, school me up on the concept of an idea I tend like I know nothing 'cause I don't know anything. And
21:04 then I wanna talk about your angle and what you're trying to do. Yeah, and two fuses ago, I moderated a panel with Tim Latimer, Fervo, and Guillermo of neighbors. It's all smart people. And
21:18 maybe that's where she heard me mention it as asking questions. So
21:24 Geotest, in our case, is a way to continue our project And most importantly, a line with policy and a line with state goals, which is what I'm most excited about. Okay, now we should have our
21:40 social license to operate again, but what you have in California and specifically Kern County, 70 of the oil production in Kern County is thermally enhanced. It's a heavy crude and operators take
21:55 natural gas to fire a steam generator to put steam into the reservoir to get more oil to flow. Yeah. Thermal EOR. So that's very known. That's been happening for 70 plus years in the Central
22:08 Valley. So we know the heat transfer, the physics of it and the thermodynamics of how reservoirs respond to heat, porous permeable reservoirs, sandstone reservoirs in our case. So what we're
22:23 doing is taking away the natural gas feedstock, Taking away the steam generators. and replacing that with solar troughs. So these solar troughs are 18 foot parabolic troughs. So they're pretty big
22:38 systems. And they concentrate sunlight onto a sapphire tube that sits right three feet off the face of it. So you're not scorching birds with one of these power towers. It's not exactly what it
22:52 reminded me of. None of that. And you can actually get close and touch that too. It's very safe technology These troughs came on to California's independent system operator in the early 2000s.
23:06 There were, I think, three 250 megawatt trough plants that were out in the Mojave and Eastern part of the state. Yeah, big plants. They work. They're very efficient. They're like three times
23:19 the efficiency is flat panel PV. Well, what happened was flat panel PV got so cheap that everybody's like, well, why wouldn't we just roll out all that flat panel PV So the trough industry kind of.
23:30 You know technically why it's so much more efficient than the five thousand. 'Cause you're concentrating, you know, it's a parabola in your con, that sunlight comes in and concentrates. So we
23:39 heat a working black to the technology. We heat a working fluid in that pipe to 700 degrees Fahrenheit. Okay. So it gets hot. Yeah. And then that goes to a heat exchanger. Yeah. We bring up the
23:52 reservoir, brackish reservoir water. Yeah Unpotable, non-usable for ag or human consumption. In
24:01 a closed loop, we bring that water up. That gets heated to 500F at that heat exchanger. And then it's re-injected into the reservoir. So it will take 12 months. And the time depends on your well
24:14 spacing, your patterns and all of that. The wall mechanics, yeah. So we will heat the reservoir to 500F over a period of 12 months Once you're hot, you can then activate a second loop. which is
24:28 a traditional steam turbine power generation set and you're basically bringing on geothermal clean power on demand. We're not operating as a base load because because of the duck curve, power is
24:43 worthless in the middle of the day. It's ruined the base load generation market completely. And so we're saying we'll come on at peak and night time, so 4 pm to 6 am or whatever you want market
24:57 approximately 8 hours a day. We're looking at like 3000 hours a year. Every day we're kicking on at night, providing clean electrons when our grid is otherwise importing coal and gas. So that's
25:10 the model. And the huge benefit and then I'll stop, the reservoir gives you 1000 hours of storage, integral storage, added bonus because the reservoir is heated and stores that heat for 42 days.
25:26 Okay, so. I have a lot of questions. Yeah.
25:32 My first question is, so it sounds like it's kind of like artificial geothermal. You're essentially saying, Hey, we're going, instead of finding hot zones to drill into, we're going to heat a
25:46 reservoir using solar thermal and a heat exchanger, send that down, down hole. You said that there was a fluid, is that just brine? No, in that pipe, it's a polysilicon oil. Okay. That's
25:58 rated to about seven or a half. Got you, cool. That's what I was wondering, 'cause I was like, I don't know how brine reacts when it's that hot. Okay, so I understand that. My second question
26:13 is, did you see that startup that just got funded by Sam Altman and some others down in Miami that they're building solar thermal for data centers, and it's like these shipping containers.
26:26 essentially just taking solar heat and then powering a steam turbine. So it seems like solar thermal generation is actually, there's a lot of cool things that are happening with it. The third
26:40 talking point, I'm gonna be all over the fucking map here, but my mind is just running as you're talking. Talking about the duck curve, this is the thing that bothers me a little bit is the
26:52 economics of energy projects like, yeah, solar on a marginal basis is super cheap. How do you make money doing it without subsidies? And this always brings my mind back to is like, hey, if we
27:07 ever do have a future of free and abundant energy, can this be a capitalistic system, or does it have to be subsidized? Which I'd almost make a case that, hey, free energy should be subsidized
27:19 'cause it'll grow GDP. That's a conversation for another fucking podcast. but right now it is a problem because it's like, hey, we have this project that we can bring online, but it's not
27:32 economic because during the daylight hours, this is what the, I mean that gas peakers and everyone we're dealing with is like, you just have abundant energy during the daytime and projects don't
27:43 pencil out. So it doesn't make sense to build that net gas peaker plan that you need at six, seven pm And so it just throws economics, it throws the market out of whack.
27:57 But going back to this
28:00 technology, one, it sounds like this, this technology is already available on the market. You said that there is this 350 megawatt plant that had them. And so are you essentially taking that same
28:16 technology from the provider that that plant was using scaling it down for a smaller plan. How many megawatts would a plant like this be? Like answer some of those questions. Yeah, yeah. There
28:29 are some technology improvements we're making to the trough system itself. Some concentrated solar folks use a lot, mainly use mirrors. If those mirrors break or they're more prone to break,
28:42 they'll crash on the sapphire tube, break the tube, you have all these maintenance issues. These are these compounding problems. Yeah, so we've got a partner in California who is using aluminum
28:52 sheet metal and spray silversing that. It looks like a mirror. It behaves, it has the same reflection, it's amazing. And so, and it's easy
29:12 to assemble them, put together. And they've also demonstrated multiple concentrated solar trough plants in Nevada. Solar one was theirs and Louisiana, they've done some work. So we are improving
29:15 significantly some of the issues with the trough technology And, um, Sorry, what was the second part of that question? Yeah, well, it was the second part. Actually, before I get to the second
29:25 part, a stand on that topic. So for you in trying to build out these assets, is this a underlying asset play for you guys, or is it a technological play for you all? I mean, do you see it as -
29:39 Oh, it's an a making It's. okay Asset. play asset thermal battery. Yeah, that was the second part of your question is how we're gonna scale. So we're gonna demonstrate this. We're gonna put out
29:47 100 kilowatts for 24 hours That's a system that includes eight wells, six injectors, two producers, and two acres of this trough. Then we'll scale to our first commercial size, which will be 10
30:00 megawatts, 34 wells, about 50 acres of trough. Ultimately, at our lease, we plan to develop this to a 400 megawatt system. And we will have north of 300 wells and it's land intensive with the
30:18 solar.
30:20 a section to two sections of land that are these troughs. And so you need, and
30:25 there's trade-offs to everything, but you'll have no emissions. Yeah, with it being land intensive. What's the challenge there with land owners? Surface use those things of that nature. How does
30:38 that work? The beauty of California and specifically the west side where we're at is it's all, the surface and minerals are owned in fee by the operators typically, big companies So Chevron era,
30:50 which just got sold to CRC and even the independence we work with. So there's, it's like a dream working with service owners and having a good relationship. There's a, there's a rancher that runs
31:01 cattle out there, but it's so dry out there. It's worthless run in the cattle. Yeah. So the, so working with these other operators, we lease from other operators. So we lease the minerals, we
31:13 work out the surface agreement on the solar And then we go and develop it in the beauty. The first part of the question about why out there and the benefit of that is we are in the West side of
31:27 the Kern County, San Joaquin Valley, Southern San Joaquin Valley, prolific oil reservoirs. And it's the region where they're installing all of the carbon park technology. So the county back to
31:40 that county planning office has designated 30, 000 acres for solar. So we're saying, okay, give us 2, 000 acres for concentrated solar It fits right into your plan with CRC carbon terra vault,
31:54 they're 40 minutes up the road from us. One of the things a lot of people don't talk about with new technologies, whether they're carbon capture, whether they're carbon storage, whether they're
32:03 direct air capture and storage, they take a lot of power. They require a lot of power. And what we're saying is we can do commercial off-take agreements with these bigger operators to sell them
32:15 clean power at night when they don't have it.
32:19 you know, reducing emissions if you're buying fossil gas and coal-fired generation at night. It just, it doesn't make sense. Yeah. I think that's actually - So that's kind of the strategy of the
32:29 territory. Yeah, that's interesting. You know, with this, with this broader idea of
32:38 generating heat and heating a reservoir, can this be applied to other reservoirs like out in West Texas? Hell yeah. I see there's a ton of flooding and different parts. And so is this something
32:53 that's specific, just out, you know, towards this part of the world or do you think this can be scaled out to other basins as well? We think if they unleash the permits and are part of the world,
33:04 this will be for California what the shale boom was to West Texas. And that's not exact. We have a grid that we want to decarbonize by 2040 And we have no long duration energy storage in the works.
33:19 That's a problem. Takes 10 years to interconnect, 10 years from now, it's 2034. How are you gonna build 50 to 60 gigawatts of long-duration energy storage in 16 years? This can do it. Number one,
33:31 number two, we think the west side, the depleted oil reservoirs depleted, depending on how much we've pulled out of there, could pull off 50 to 60 gigawatts of geo-test installation. It's there,
33:46 the reservoir, the pore space is available and the technology will work because we have the solar irradiance. So moving that, we overlay NREL, the National Renewable Energy Lab, has a solar
33:57 irradiance map of the country. So you can look, we believe anywhere where you have shallow oil reservoir and good sunlight, there's a candidate right there. Now some of the weather issues you
34:09 mentioned, you can turn these troughs down if you have hail, but if it's the size of a volleyball or whatever you guys get out of here, Like sick people posted there some dude Sometimes you get
34:19 some crazy hills. It's not always - Like there's a cannonball coming through. You know, it's funny, dude. I saw
34:25 this video, you know, it was in Fort Worth and people had stopped traffic 'cause they were parking their cars under a bridge, which is a bitch move to do. But I saw people like up in Massachusetts,
34:37 like, oh my God, they stopped for a hill, like, well, Pussies, I might do. Have y'all seen Texas and Oklahoma? Yeah. Like, yeah. I have never seen it in person, nor do I want to Yeah, no,
34:47 you stuck out in a hill, man. Like, one, if it's, you know, marble size, it just hurts, but you can't get to the size of our shit, man. You take one of those for the head, it can kill you.
34:58 So, but that is good to know that you can
35:03 orient them down to where they can prevent or mitigate from having damage.
35:10 What about seismic issues? Any concerns on that? You know, just seeing what's happening out And, um, and. West Texas right now with saltwater disposal wells. It's interesting. You know, what,
35:29 when you guys are, when you heat these reservoirs, you know what, what type of effects does that have on expansion of rock or pressure, especially being in California. What if you get fucking 50,
35:40 these things standing up and all of a sudden California splits off in the ocean and the United States is safe?
35:48 We're all okay. Go mic on, bro. Yeah, yeah, yeah, I'll be on that island.
35:53 But, you know, seriously, I'm sure that's something that has to be considered and I'm sure California is way more strict already on this than Texas Railroad Commission is and so,
36:05 concerns there, things you have to watch out for. You know, what do you guys have to do to that consideration? Yeah, great question. From what I understand in West Texas, you're injecting deep
36:16 into the Ellenberger, the basement rock and you're over pressuring it and you're causing these earthquakes if simply stated non-technical, not an engineer. But where we are, California is heavily
36:28 faulted geology. It's beautiful geology. I mean, you have amazing oil reservoirs all throughout where we're at distributed up and down that west side. The real seismic areas of concern that you
36:42 hear about are more on the eastern side of the state where you have El Centro and the San Andreas. And that's also where you have geothermal because it makes its hydrothermal pockets make their way
36:55 up to the surface. You see the hot springs, you see, there's a ton of seismic activity just naturally in that eastern side of the state. So now, you know, knowing that the big one likely won't
37:08 happen where we're at, will we induce seismicity? operating at a reservoir depth of about 1200 feet. We're heating the top 200 feet of a sandstone reservoir and we have ceiling faults around us
37:22 that are not active. So we'll do all of this and this is kind of, it's hard for me to describe as a non-engineer but at 600 PSI at the reservoir pressure, we're keeping everything in the liquid
37:37 phase at the reservoir pressure, no fracking because if you frack, you're gonna frack through a fault, you're gonna frack and lose water. You're gonna blow out your reservoir. You don't want that
37:49 to happen. This is your entire asset. Right, so it's a real, it's a real, it's not a concern but a factor that our reservoir engineers look at what really matters is your fluid flow in and out of
38:03 the reservoir and managing that which is all manageable and all that to say there is no fracking and fracking's banned in California totally different technology than enhanced geothermal systems,
38:15 which is fracking, hot, hard, dry rock. This is drilling post holes into soft, permeable sandstone, cheap wells, drill them in a day or two. Yeah, looks like conventional oil plays. Yeah.
38:30 Just poke a straw on it. Yeah. So are these wells, you guys use casing and all of them? Yeah Now we're getting technical here, open hole, open hole, completion. They got, I'm not an engineer,
38:44 I'm like, all right, I'm going to fucking - Well, yeah, there's a question around, to sidestep that, I don't know the exact completions on open hole, I believe we are, but you do need flow
38:55 rates. So you need nine and five eighths wells. You can't necessarily think you're going to convert - That's what made me ask, because you started talking about flow rates, and I'm starting to
39:04 think about well design here, and so I'm like, okay, what do you need to get the flow rates set?
39:12 And, you know, interesting conversation, I was having breakfast with Tim Latimer from Fervo a few years back. And for those that don't know, Tim, Tim, is a former oil and gas completions
39:24 engineer at BHP. Went to Stanford and now he's the CEO of Fervo, which is, to my knowledge, probably the leading, leading AGS for sure. Yeah, leading geothermal company, they're crushing it.
39:37 And anyways, I said they're talking to Tim and I'm just talking about the similarities between oil and gas and hey, what are you taking over from oil and gas to geothermal and blew my mind when he
39:49 told me that historically geothermal didn't run casing in the walls. It was all open hole and I was like, oh, that's like, wow, that didn't, I wouldn't think that, but started talking about
40:00 flow rates. And I was like, oh, I could see why they went open hole, but that's what really matters. And geothermal is just fake Can we pass fluid? Yeah, we're going to be moving a million
40:13 barrels of water a day if we have a 400 megawatt plant. Yeah, so a lot of water. Yeah, a lot of fluids. So,
40:21 yeah, the well design on on these things is interesting to me to see how that all that lays out. But other than that, you know, moving forward in the future, do you think that this is
40:38 the play for long duration storage? I mean, do you think that it's more economic than than commercial batteries? Do you think it's more scalable? Yeah, interesting. You bring this up. NREL put
40:50 a chart up. I was at AAPG and geothermal rising event before this. And they put up a chart that shows geothermal is a little bit cheaper than PV plus battery storage. So, geothermal in itself is
41:05 known to be more expensive than onshore wind and just flat panel. PV. But when you add the storage, it's right there cost competitive. Geotest, the storage is free. So people ask me, well, why
41:21 do you think this is so great? Or why is it this way? Well, when you're injecting heat into the reservoir, if you're, if you're losing heat, your battery is just getting bigger into your
41:32 reservoir, you have ceiling faults. So at a certain point, it's all contained, but your battery is getting bigger. And as you step out your well patterns, you're just honeycombing those out and
41:41 out and out. So your battery is just getting bigger. So the cost of storage is effectively free. So when I think of people doing sand batteries and shipping containers, molten salt, all those
41:53 ideas, yeah, if you want something maybe that you can put in a specific area and you need that technology, sure. But if you're just putting electrons on the grid, we'll have a levelized cost of
42:05 energy at six cents a kilowatt hour. That's cheap. It's interesting that you brought up the price comparison between geothermal and solar plus battery because I'd written this, this post got me
42:21 some hate from some friends of mine in Houston that are in renewables, but stand by it is the truth. Everyone talks about wind and solar being the cheapest energy source. And they're right when you
42:35 look at it at the asset level But that doesn't mean that it's the cheapest for the rate payer and when you factor in batteries or backup generation, transmission and distribution, these things and
42:48 they didn't agree with that? No, they didn't agree with that. And so, and I'm fair in this too, because in that Twitter post, I said this is the same exact shit that oil and gas did promoting 40
42:59 IRRs on half-cycle economics. And yeah, hey, we have a 40 IRR if we back out land costs and she and they're like, What kind of fucking math is that? And so I said, it's the same exact thing
43:11 that's happening there. Oh yeah, wind and solar is the cheapest if you back out, battery, backup generation, et cetera. And anyways, yeah, some people will like, well, the developer, they
43:23 only care about the asset. And I'm like, yeah, but as taxpayers that are paying for electricity, what do we care about? We care about cheaper electricity prices. And that's not what ends up
43:35 happening. And so you have all these silos where you have people building, and this is why you have the fact that you can even have stranded renewable assets, blows my mind,
43:46 because they're so heavily subsidized. And they don't care. They made their money on that. But then, hey, for this to be operational, if you need batteries or backup, that costs adds up. And
43:57 it comes back to the rate payer. And so that's something that needs to be communicated to the community. Because you have to look at an all-in cost from end-end You're right. friends on Twitter and
44:11 I was like, I should listen to you. I was like, I'm not backing down from that because I think that I'm writing that. No, they should research California because I agree going back to your point
44:18 on rooftop solar at your house. Yeah, it's great if you can afford it. But what happened in California is all the rate payers had to chip in to give wealthy homeowners who own their home, who got
44:32 the tax credits to get 30 off their solar installation that then came off the grid during the day or whatever they say they are. Causing high electricity prices. Well now, yeah, now the
44:43 electricity prices go up because there's fewer rate payers buying those electrons during the day. And there's maintenance that has to happen. So now we get to pay for all the maintenance of the
44:53 system while these wealthy people with PV. But I agree, it's good technology. If you can afford to have it, have it. But it's not as cheap as this. And it should be subsidized. No, not at all.
45:04 I didn't even think about that loop of that happening That's what they're finding is that they had to get rid of. the subsidies and then change them just a couple weeks ago and they're always
45:14 changing them because they can't maintain the grid without passing those costs on it. Now we have fixed fees on every rate payer and
45:24 they wanted to do income-based and they said, Oh wait, we probably can't. That's a full-blown communist. It's just, it's just - And then about to have the EV tax for driving a EV for mileage. EV
45:36 tax for mileage because they're realizing, Oh, gasoline tax generates 13 to 14 billion a year. Which I see you goin' off on gasoline tax all the time. Absolutely, it's 275 out here. That's what
45:47 I - Does it make you jealous when you come back? Yeah, by 2026, our tax is a loan will be 275 now. And that's crazy. And then, but they turn around and blame Big oil. Big oil. And it's like,
45:57 Hey, why don't you back outyour taxes from that and see what gas prices are? Yeah. So, yeah. Jesus Christ. And big oil, you're right. the largest cartel in the world. Who we get 70 of our
46:08 product from. Yeah, it's big oil, you're right. I don't know how you live in California, man. I couldn't do it, but dude. I'm glad that you're in Texas today. I'm glad that we got to do this
46:18 podcast. If people wanna find you, they can find you on Twitter. What's up? Twitter, Mike Umbro, I'm the real deal. I'm not anonymous. So be real, be real, Mike Umbro, we'll put your,
46:30 we'll put your link in the comments. Preaches, come on the show. Yeah, thanks for having me.