Koloma's Bet on Buried Hydrogen for Farmers

Summary

Inevitable (an MCJ podcast)

Episode: Koloma's Bet on Buried Hydrogen for Farmers
Date: July 14, 2026
Host: Cody Simms
Guest: Pete Johnson, Co-Founder & CEO of Koloma

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Overview

This episode explores Koloma’s quest to discover and commercialize geologic (natural) hydrogen—hydrogen generated by the reaction of groundwater and iron-rich rock deep in the earth—and its game-changing potential, especially for the U.S. Midwest’s fertilizer/agricultural sector. Host Cody Simms interviews Koloma CEO Pete Johnson about the science, business model, market fit, and future prospects of a primary clean hydrogen resource. The discussion touches on both the technical exploration and commercialization challenges, as well as the big-picture implications for energy transition.

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Key Discussion Points and Insights

The Origin and Mission of Koloma

• Koloma’s Name & Mission:
  • Named after Coloma, California, the site of the first big gold discovery and a metaphor for “resource rush” and innovation. (02:01)
  • Koloma aims to discover the first new primary energy resource since nuclear power in the 1950s.
  • “If this works out the way we think it could, it'll be a big dogleg in the way we think about energy.” — Pete Johnson (02:50)

Geologic Hydrogen: Where and Why

• Prime Locations:

  • Major prospects are found in “rifts” or failed rifts—areas rich in iron-containing rocks, such as the Midcontinent Rift running from Oklahoma through Minnesota. (03:44)
  • This rift underlies the U.S. Corn Belt with the world’s highest hydrogen use per acre (in ammonia-fertilizer production). (04:16)

• Not Just About Power:

  • Hydrogen can provide clean baseload power, but Koloma’s initial focus is ammonia/fertilizer—where the market is immediate and the need is acute.

• Geopolitical and Market Fit:

  • Location match: where the resource sits on top of demand (i.e., fertilizer in Midwest, power demand or import reliance in places like the Philippines and Pacific Rim). (06:22, 23:01)

Midwest Fertilizer: The First Commercial Focus

• Market Opportunity:

  • The U.S. Midwest imports ~2 million tons of ammonia a year, despite being the world’s highest per-acre user of fertilizer ammonia. (08:22)
  • Ammonia supply is expensive—$150/ton premium over Texas—primarily due to transportation and logistics. (08:45)

• Why Not Locally Made Ammonia?:

  • Most ammonia plants are co-located with the cheapest natural gas (often not in the Midwest), creating supply/demand imbalance. (09:40)
  • Hydrogen produced from geologic sources could unlock low-cost, local ammonia production without the “green premium.” (08:03)

• Pipeline Challenges and Local Supply:

  • Hydrogen can be moved via pipelines (U.S. has 1600 miles), but pipelines are expensive and hard to permit; local supply obviates this need. (11:20)

• Analogy with Oil & Gas:
  “The first big discoveries of world-changing resources tend to have infrastructure located on top of them.” — Pete Johnson (12:53)

  • Infrastructure will follow the resource, just as refineries did after East Texas oil.

Koloma’s Business Model and Exploration Process

• Koloma’s Origin Story:

  • Built on a unique, 25-year-old database of subsurface hydrogen samples, originally a lab-testing company—transformed to leverage this data for exploration. (14:07)

• The Oil/Gas Exploration Analogy:

  • “Find, appraise, sell down” model: Koloma plans to find assets, appraise them, then partner with operators for development, reinvesting in new exploration. (14:46)

• Risk-Reward Realities of Exploration:

  • Success rate for frontier wells: 10–20%. (15:32)
  • “Much more likely to get knocked down than you are to land a punch.” — Pete Johnson (16:01)
  • Most of the work is heavy, data-driven seismic analysis, not “gushers.” (16:35)

The Scale and Nature of Discoveries Needed

• Resource Size Needed:

  • A typical world-scale ammonia plant: 500k–1M tons/year = needs ~100k tons/year hydrogen = TCF-size gas discovery. (18:13)
  • For smaller, distributed uses or power, smaller resources may be sufficient (as in the Philippines). (24:04)

• Resource Quality:

  • Hydrogen discoveries may co-exist with water and other gases (often nitrogen)—processing is off-the-shelf for purifying. (33:31)
  • “Anything that you find that's sort of 30, 40% hydrogen or above is going to be pretty darn competitive in the market.” (35:09)

Market Fit, Commercialization, and Use Cases

• Ammonia is the Beachhead:

  • Most immediate and largest value for Midwest agriculture.
  • Local production addresses both supply and transport cost issues.

• Other Use Cases:

  • Philippines: hydrogen could go straight to power gen, offset diesel (23:01).
  • Hydrogen as “the skeleton key”: power, steel, SAF, fertilizer—it’s all about price. (24:37)

• Location Matters:

  • “If I find hydrogen out in a desert somewhere and there's no electrical transmission, there's no power demand and there's no ammonia demand... it's hard to use.” (26:40)
  • Discovery in the right commercial location is crucial.

Hydrogen Markets, Greenwashing, and Tax Credits

• Hydrogen Cost Realities:
  • Natural gas-based hydrogen costs ~$1.30/kg in the U.S.; much higher elsewhere; supply chain and volume use also raise delivered costs. (35:53)
• Greenwashing and Subsidies:
  • Johnson leans pragmatic: cleaner hydrogen makes sense, but “if you can't see a path for something five years down the road to exist without tax credits ... it's hard to justify wanting to do it.” (37:39)
  • “...the government's role of creating tax credits to try to incentivize technical innovation is great... (but) perpetual tax credits... not a great way to think about it.” (37:57)

Koloma's Current Status and Challenges Ahead

• Company Scale:
  • Raised $400+ million; 20 million acres under lease (US Midwest, Philippines, Australia, Canada). (39:25)
  • Now focused on seismic analysis and drilling wells at an accelerated pace. (39:46)
• Permitting & Data Challenges:
  • Biggest US obstacle is permitting reform—too many veto points compared to simpler international regimes. (42:05)
  • “This is a data game.” Access and analysis of geophysical data is a critical bottleneck. (43:02)
• Ecosystem Gaps & Opportunities:
  • Opportunity for startups in geophysical data, AI analysis, and midstream separation tools. (43:44)
  • “Building equipment that's going to be really useful in the success case... you'd be way better off as a capital provider getting into the exploration side.” (45:36)

What Success Will Look Like

• The “Eureka” Moment:
  • Success = a well that flows high-purity hydrogen at consistent rates for 30 days—proof of a commercially viable, large gas reservoir. (46:29)
  • “Every single shareholder, every single employee is going to be there and going to be celebrating. It's going to be a big giant party.” (47:45)

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Notable Quotes & Memorable Moments

• On the market urgency:
  “There's no better place on God's earth to go find natural hydrogen that's really low cost that could actually fill up the storage facilities for ammonia-based fertilizer in the Midwest.” — Pete Johnson (08:55)

• About the oil/gas analogy:
  “The first big discoveries of world-changing resources tend to have infrastructure located on top of them... The first big discoveries, the infrastructure follows.” — Pete Johnson (12:53)

• On the realities of exploration:
  “You're much more likely to get knocked down than you are to land a punch... every time you're drilling a well, realistically, it's a well that's probably going to be a dry hole, but it's going to teach you something.” — Pete Johnson (16:01, 16:09)

• On subsidies and business resilience:
  “I constantly sort of say I don't want to work in businesses where... if a subsidy is canceled, the business is under. It's hard enough to build businesses and trying to predict what Washington's going to do is really challenging.” — Pete Johnson (38:10, 38:24)

• On the ‘eureka moment’ of discovery:
  “What success looks like is you drill a well... For 30 days you're watching this high volume come out... after 30 days the pressure is still basically the same... Then it's a high volume... that's going to be a really exciting moment.” — Pete Johnson (46:50–47:37)

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Important Timestamps

• Koloma’s Name & Mission: 02:01–02:28
• Geologic Hydrogen Overview & Midwest Focus: 03:30–07:02
• Midwest Fertilizer Market Opportunity: 07:51–11:11
• Hydrogen Pipeline & Transport Discussion: 11:20–13:31
• Koloma’s Data-driven Business Model: 14:06–16:13
• Resource Size Needed for Ammonia: 18:13–22:17
• Philippines and Non-Ammonia Use Cases: 23:01–25:48
• Hydrogen Market Realities & Greenwashing: 35:53–38:18
• Koloma’s Status, Challenges, and Strategy: 38:52–44:01
• Permitting, Data, and Ecosystem Needs: 42:05–45:09
• What Success Looks Like ("Eureka moment"): 46:29–47:45

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Summary

Koloma is making a bold bet on geologic hydrogen, aiming to be the “explorer” that unlocks a new primary energy source—one that could upend the economics of fertilizer in the Midwest and reshape global clean energy potential. The company’s approach, rooted in deep data and classic resource exploration, seeks both scientific discovery and practical commercialization, with an early focus on high-value, local markets. While technical and regulatory challenges are significant, the episode is optimistic about the timeline for major discoveries (“two years out”), and Pete Johnson’s experience—from data to business model to on-the-ground reality—anchors the conversation in both excitement and gritty realism.

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For listeners and policy-watchers, this episode shows both the promise and the complexity of betting on “buried hydrogen”—an endeavor with echoes of both the gold rush and the fracking boom, but with a 21st-century clean-energy twist.

Transcript

[A]

Today on Inevitable, our guest is Pete Johnson, co founder and CEO of Coloma. Coloma is a geologic hydrogen company. It draws on a 25 year proprietary database of subsurface hydrogen samples to find and produce naturally occurring hydrogen from deep in the earth. A clean fuel that forms when groundwater reacts with iron rich rock. The company has raised more than $400 million from Khosla Ventures, Breakthrough Energy Ventures, Amazon's Climate Pledge Fund, Osaka Gas and Mitsubishi Heavy Industries, and now holds roughly 20 million acres of exploration rights across the US mid continent, the Philippines, Australia and Canada. Natural hydrogen would be the first new primary energy source since nuclear power in the 1950s. And the and that alone is an incredible thing to explore. But lately Coloma has been putting real focus somewhere more specific. The potential for natural hydrogen to reshape fertilizer production in the US Midwest. I was eager to ask Pete how that became the first market and what it says about where this goes next. From mcj, I'm Cody Sims and this is inevitable. Climate change is inevitable. It's already here, but so are the

[B]

solutions shaping our future.

[A]

Join us every week to learn from experts and entrepreneurs about the transition of energy and industry.

[B]

Pete, welcome to the show.

[C]

Hey, nice to be here. I'm a big fan.

[B]

The burning question I want to start with is, you know, I think any of us who've been following the energy transition space are familiar with the company you're building with Coloma and this quest for geologic hydrogen, but I have no idea what the name means. What is Coloma?

[C]

Oh, this is a fun one. So Coloma is a valley in California

[D]

where Sutter's Mill is located. So this is where the very first kind of big gold nugget was discovered that launched the whole California gold rush,

[C]

that launched San Francisco and sort of

[D]

launched the Silicon Valley mindset, in my opinion. So it's spelled with a C on the map, but K is a better letter for branding, better letter for a website, but that's really what we named the company after.

[B]

And what an apt metaphor for what you're trying to do, which is, as I understand it, discover the first new primary energy source that potentially will come online since nuclear fission in the 1950s.

[C]

This is a big swing and as I looked hard at it when we

[D]

were deciding whether to jump into this

[C]

or not, it's just recognize that if

[D]

this works out the way we think

[C]

it could, it'll be a big dogleg

[D]

in the way we think about energy.

[C]

It's exciting.

[B]

As I've thought about geologic hydrogen, I've Come at it from that lens as well, which is like, hey, hydrogen can be this power source, it can power all sorts of industrial process. It could be a potentially even a primary baseload power. But it feels like where you are finding kind of your initial go to market is on the fertilizer and ammonia track. Maybe start with some of the developments you guys have had in the Midwest and how if those come to fruition, you feel like geologic hydrogen can be a unique lever in those markets.

[C]

Let me step back for a second. Just talk about where the most prospective places for hydrogen. Because hydrogen is like any energy source, where you find it helps to determine how it's used. Natural hydrogen or geologic hydrogen, those words

[D]

are kind of used interchangeably.

[C]

But you typically find the most prospective

[D]

areas in two places. One is in rifts or failed rifts where you've got this iron rich rock that's come up close to the surface or come out of the surface. And the Mid continent rift is this huge, huge failed rift in the middle of the North American continent that starts down in Oklahoma and winds its way all the way up through Minnesota and then up into Canada and back around.

[C]

And it's, you know, one of the

[D]

world's largest contiguous pieces of ultramafic or mafic rock with hydrogen generated potential.

[C]

Happens to sit right on top of the corn bell where you actually have the highest hydrogen use and form of ammonia. You have the highest hydrogen use per

[D]

acre of any place on the planet.

[B]

On the geology there. I'm from the Midwest, I'm from Kansas, born in Texas, grew up in Kansas. That also happens to be where a lot of the fracking revolution happened. Is there a parallel there? Is that a similar reason or not?

[C]

No, it's not. The oil and gas region in Kansas is really actually western Kansas and the Mid Continent rift is really moving through

[D]

the eastern part of Kansas, up through a little part of Nebraska, then through Iowa and Minnesota.

[C]

So it's actually not totally unrelated. It's not an oil and gas region. I mean, that's one of the pluses and minuses. The pluses are like you can come

[D]

in, you can lease land for pretty

[C]

low cost, you can move pretty quickly. A lot of people are really interested in this. I think the minuses are because it

[D]

hasn't been explored much.

[C]

You're starting from a kind of a

[D]

standing start as far as data gathering and trying to really understand the area.

[C]

You know, I think that's led to this taken a little bit longer than what I think a lot of people

[D]

and Pundits and people who write blogs on news are sort of expecting miracles within three years.

[C]

And reality is like it's a tough

[D]

slog to go out and get all the data you need to enter into a geology informed enough to go find traps.

[C]

And so that's kind of the double

[D]

edged sword of geologic hydrogen is you come in, you can lease up big tracks of land, you can get all these great land positions, but you've got a lot of work to do around data.

[C]

Stepping back just about the geologies where

[D]

we find this, so we find it in rifts.

[C]

And so mid continent rift is an example of that. You know, there's rifts in Africa, there's

[D]

rift zones in other places.

[C]

The Mid Atlantic Ridge is an example of that. The outcrops of Iceland. And then you've got places where plates

[D]

are colliding, so continental oceanic plates.

[C]

And so the Pacific Rim of Fire

[D]

is a really interesting area as well. You know, different geology. You have a lot of people talking about these ophite structures that you see in Japan and the Philippines and you know, even California.

[C]

Those are the other types of things

[D]

that are really interesting.

[C]

So geographically what's interesting is the fact that you find the most prospective source rocks like the we're looking at in places where you have massive agricultural demand, just fantastic. And in the case of the Pacific Rim where you have massive populations and

[D]

huge geopolitical implications of domestic energy sources.

[C]

And so finding hydrogen in Kansas or

[D]

Iowa or Minnesota, where ammonia demand is really high, is just a huge win.

[C]

Finding hydrogen along the Pacific Rim where

[D]

you have, you know, major geopolitical implications for new primary domestic energy sources is also just a huge win. And so are two places where we're really active.

[C]

It's exciting because the market is so

[D]

perfect for what we're looking for.

[B]

So let's dig in or dive in to the Iowa project that you're going after. It sounds like then yes, there is a market, but obviously you have to start with where is the resource. And so you've started with we believe there's significant resource here for these geological reasons that you were articulating. And then it just so happens that there is also a market. So you've hit this sort of combination of these two where potentially if you can uncover endemic resource here of a under the ground hydrogen, you have a potential real use case for why it matters in that location. Can you talk a little bit about why that's important from a hydrogen perspective?

[C]

Look, today hydrogen is used primarily for ammonia production, which is, which goes into

[D]

Fertilizer for the most part, and it's used in oil refining.

[C]

And those are the two uses today. And the reason why hydrogen isn't used

[D]

in other places because it costs too much.

[C]

And so if you can find hydrogen

[D]

as a primary energy resource, you're gonna be able to find it at a cost that makes it so you can compete directly on with hydrogen coming from fossil fuels. And then you can start to produce these things at really low cost and no green premium.

[C]

In the Midwest, we import 2 million

[D]

tons of ammonia, which is ironic. I mean, this is the place in the world that uses the most ammonia based fertilizer.

[C]

Any place, you know, any location in

[D]

the world, they import 2 million tons. There's a big pipeline that comes up from Donaldsonville, Louisiana that brings in ammonia from Russia and Ukraine and Trinidad Tobago. And you get some of the marginal tons come down from Canada because of that.

[C]

There's actually a $150 ton premium for

[D]

ammonia prices that they're paying in Iowa and Kansas and Minnesota relative to what you pay for ammonia in Texas.

[C]

So there's no better place on God's

[D]

earth to go find natural hydrogen that's really low cost that could actually fill up the storage facilities for ammonia based fertilizer in the Midwest. Because you're not only sort of addressing

[C]

a supply shortage, you're also selling that

[D]

hydrogen in a place where just the transportation costs make it so the ammonia is more expensive today.

[C]

You know, like the people who took the biggest hit when Russia attacked Ukraine

[D]

and even this Middle east issues, right? Ammonia spiked. The people who take the biggest hits are Iowa farmers.

[C]

And so that's a really important thing to think about.

[B]

Without going too far into a history and chemistry lesson, why is that? Why does that part of the United States import so much ammonia versus producing it locally?

[D]

The ammonia industry is a pretty complex industry and it's dominated by a few very large companies.

[C]

And they have various rationales as to

[D]

why they build producing plants in places they have.

[C]

But one of the things that you

[D]

want to do today is you want to build ammonia plants on top of the lowest cost natural gas you can. That's why a lot of ammonia is produced in Texas or in other places like that.

[C]

But there is ammonia produced in Nebraska,

[D]

there's ammonia produced in Iowa.

[C]

It's just a bit of an imbalance

[D]

of where it's produced and where it's used. And, you know, that's probably an interview for somebody from Coke or from Nutrien to talk more about that.

[C]

What I know now is that there's

[D]

just a huge imbalance of where it's produced and where it's used.

[B]

And a lot of it's steam, methane, reformation. You're sitting, you're co located, as you said, next to a natural gas plant. And you just talked about at the start how this rift that you're exploring along in Iowa and eastern Kansas actually is not a natural gas producing region by default.

[C]

Right.

[B]

So you don't have this sort of local resource where you could set up ammonia production, as I understand it, with hydrogen. One of the big challenges of it as a molecule, which I think you can also produce ammonia using hydrogen without natural gas, is that correct?

[C]

That's right. Almost every ammonia plant today uses natural gas. They split it into hydrogen and then

[D]

it's a hydrogen plus air equals ammonia. That's how you actually produce ammonia, as

[B]

I understand it, with hydrogen. One of the biggest challenges of it is that it's hard to move because it's such a small molecule. It's a challenge to move. And so if you can generate a local resource of it, you solve that colocation problem just using hydrogen instead of using natural gas. Am I following the thread correctly there?

[C]

I would frame it a little differently. So first off, we have 1600 miles

[D]

of hydrogen pipeline in this country.

[C]

We know how to move it, we

[D]

know what the pipeline should be. ASME has a whole book about how to pipe hydrogen around. And every refinery in ammonia plant has miles of pipe that's moving hydrogen.

[C]

So it's expensive to move, it's just

[D]

expensive to build pipelines in general.

[C]

That's the broader thing. The large industrial gas companies are really

[D]

good at moving hydrogen. There's a little bit of like a boogeyman concept that's coming up saying like you can't move hydrogen.

[C]

You can, we do it.

[D]

It's hard to build pipelines in general because you have to get a lot of people to say yes. There's a lot of people on the line that can say no.

[C]

The advantage of finding hydrogen in the Midwest is know when you kind of look at what's happening today to try to address the imbalance, you had a

[D]

lot of people trying to develop, I would say green hydrogen or electrolyzer hydrogen driven ammonia facilities in the Midwest.

[C]

When we went to those groups and we said, hey, we're starting to explore in this area and if we find

[D]

a large amount of hydrogen under the

[C]

ground, would you be interested in, instead of building an electrolyzer driven ammonia plant

[D]

close to a interconnect node in the

[C]

grid, would you be Interested in moving

[D]

it over 50 miles to build on what will be the world's lowest cost clean hydrogen supply. And the answer is always yes, it's

[C]

not, well, we like this site, so

[D]

why don't you build a 50 mile pipeline over to us?

[C]

It's always, yeah, we're going to go

[D]

build on top of the best supply.

[C]

And if you step back historically when oil was discovered in East Texas, that's

[D]

the reason why there's refineries there now.

[C]

It's not like somebody said, hey, let's build refineries and Kansas and we'll figure

[D]

out how to pipe the oil up from East Texas.

[C]

The first big discoveries of world changing

[D]

resources tend to have infrastructure located on top of them.

[C]

And only kind of 10 years down

[D]

the road are people doing the calculus

[C]

of okay, do I build new derivative infrastructure?

[D]

Do I build pipeline to the existing infrastructure?

[C]

And so you know, our view is the demand for ammonia based fertilizer is

[D]

pretty consistent across the Midwest. If you find large hydrogen supply, it's going to make the most sense to just build the derivative ammonia plant right on top of the hydrogen.

[B]

And you basically delete the reformer out of the production process and replace it with a hydrogen source.

[C]

That's right. Becomes a very simple plant which is

[D]

basically wells going into a hydrogen purification system going into Auburn. Bosch. There's not a big reformer in the middle. And the great thing about that is it's a lower cost ammonia plant processing lower cost hydrogen.

[B]

And where are you with these projects? You guys are the exploration engine. As I understand it, you wouldn't drive the wells yourself. You're not building a vertically integrated production company. Or maybe you are, but as I understand it, you are the exploration engine here.

[A]

Is that right?

[D]

We have this massive data advantage that we've built out over 25 years.

[C]

We can go into the story.

[D]

Coloma is not really a startup company. Coloma is kind of a rebranded lab testing company that realized that we had a data set that was going to give us a huge advantage.

[C]

So we've got this big data advantage. We're accelerating that data advantage by being

[D]

the most active explorer. We've drilled the most Wells, we've sampled 1.5 million rocks from all over the world trying to figure out the best source rocks and the best basins.

[C]

What we want to do is become the world's best natural hydrogen explorer and

[D]

just make discovery after discovery after discovery.

[C]

And then we're going to borrow a page out of oil and gas exploration

[D]

book which is really good. Explorers that are small explorers, they Find,

[C]

they appraise and then they sell down

[D]

ownership to a development partner who's going to go out and drill and operate a hundred wells.

[C]

What I would like to do is

[D]

find assets, appraise the assets, and then sell down and hold onto a minority

[C]

stake while somebody else who's really good

[D]

at drilling a hundred wells and operating that field operates. And I'm going to reinvest that capital into more exploration.

[C]

What's hard about discovery, what's not hard about discovery? It's a tough business. Look, when you step back and you

[D]

look at our business and what we're

[C]

trying to do, one of the things that you just have to be clear

[D]

eyed about is the fact that oil and gas exploration is quite mature.

[C]

We've been doing it for a long time. And your probability of success for a

[D]

frontier well in a frontier basin, depending on what company you are and are you top tier or not, you know,

[C]

you're somewhere between 10 and 20% probability

[D]

success in drilling a well.

[C]

Now that gets really expensive for oil and gas because exploration has driven them offshore.

[D]

And so offshore wells are 100 million, $150 million commitments. We're exploring mostly onshore, so wells are more like $5 million. So you can take a little more risk and you can move a little

[C]

faster, but ultimately you are much more likely to get knocked down than you

[D]

are to land a punch.

[C]

Every time you're drilling a well, you're realistically, it's a well that's probably going to be a dry hole, but it's

[D]

going to teach you something. So the next well or the next well is going to be a discovery.

[C]

Look, exploration's tough. And what people don't realize, right, because

[D]

drilling wells is kind of the sexy part of exploration.

[C]

And everybody's seen the movies. You know, you got oil raining down

[D]

or you got a big gas blowout and everybody's hugging each other.

[B]

There Will Be Blood is a great movie.

[C]

It's a good movie in some ways. Not good for the kids, but you know, it's all right for other things. But the reality is 90% of exploration

[D]

is around data gathering and data analysis

[C]

and doing the heavy lifting and the

[D]

hard work to go out and shoot 2D seismic lines and then follow that up with shooting 3D seismic and identifying traps. And most of your work is basically just finding fatal flaws and crossing things off your list.

[C]

We shot out of the gate, we

[D]

came out, we drilled a number of wells. We drilled wells at four different states.

[C]

The wells really built our confidence that

[D]

we were really good at picking basins and we understood source rock and we were finding pore space that was full of hydrogen. We brought 90% plus hydrogen to the surface. And people start to get really excited about this. And it started to feel like a when and not an if type of a question.

[C]

But that when is still a really

[D]

hard question to answer.

[C]

You look at analogs and oil and gas exploration, I mean, sometimes it's the

[D]

15th well in the basin that finally unlocks it and tells you the answer.

[C]

And so I've got a great set

[D]

of investors who sort of understand what they're into. And we are just hammering away, really focused on data. And then we're taking those shots when we can.

[B]

To use the there will be blood metaphor, the line at the end of the movie is, you know, I'll drink your milkshake, right? I'm going to stick my straw in and suck up all of your oil from underneath your land with hydrogen. As I understand it, the challenge has been you stick your straw in and you get like a quarter of a straw of hydrogen back up. You don't have enough of it to actually be a consistent resource. And that's ultimately what you need to find. How large of a resource do you need to find to solve some of the initial commercial use cases you're trying to solve? In terms of ammonia production, for example,

[C]

look, a world scale ammonia facility is

[D]

500,000 to a million tons of ammonia a year. And so let's work backwards from that and start 500,000 tons a year of ammonia, roughly a hundred thousand tons of hydrogen per year.

[C]

So you can generate a hundred thousand

[D]

tons of natural hydrogen per year if you find a TCF size gas discovery.

[C]

And that's a big discovery.

[D]

But people have found hundred TCF gas discoveries.

[C]

If you're looking at natural gas as an analog, it's a good discovery, but it's definitely within the realm of like

[D]

what people find every year, gas discoveries.

[C]

The big thing around gas, right, is you're looking for traps, you're looking for high points in the sedimentary rock that

[D]

has high porosity or sometimes fractured rock

[C]

where that gas can all be gathering.

[D]

And that gas can kind of be separating itself from the subsurface water.

[C]

There's no real such thing as purely dry gas.

[D]

It's always going to be sub gas, some water.

[C]

But you're looking for gas that might

[D]

be 50% gas, 50% water, 30% gas, 70 water.

[C]

And if you can find those sort

[D]

of bubbles of gas that are sitting in the top of these sedimentary layers

[C]

now, you can produce that gas really similar to the way we produce natural

[D]

gas or we produce helium.

[C]

There's views that I see expressed of

[D]

you can't find dry hydrogen. It always is going to coexist with water. And there's some reasonable arguments for that

[C]

because this is a reaction between water

[D]

and iron rich rock.

[C]

Water's got to be in and around

[D]

it for it to form.

[C]

The goal is to find places where

[D]

that hydrogen is migrating upwards and buoyancy is driving it in and it's finding kind of a bubble position and there's

[B]

enough of a shelf above it that it's not escaping back out through the porous rock. Right.

[C]

There's lots of different ways it could work, but simplistically speaking, you want to find that if you really kind of

[D]

draw a layer cake, you want to find mafic rock that's reacting with water.

[C]

And if I think about a really simple prospect and then sandstone or limestone

[D]

sitting on top of that, that's high porosity and a producible reservoir rock. And then on top of that maybe something really tight, like a tight shale or something else that's holding the gas in. And you want to find it shaped

[C]

like an upside down cereal bowl. If you ever been a kid and you've ever like gone down in a

[D]

swimming pool with a bucket and you've got that air trap, that's what it looks like when we find natural gas and when we find oil in subsurface is the buoyancy is kind of holding it in place.

[C]

That's what we're looking for.

[D]

The issue with hydrogen exploration is we're so early in this that most people are not yet drilling based on 3D seismic surveys. And that's the gold standard for making sure you're in a top trap. There's just a few of us that are now starting to acquire 3D seismic to be able to confidently drill traps.

[C]

And so a lot of the early

[D]

drilling we've done, a lot of the early drilling other people have done has kind of been strat wells where we're trying to understand these systems kind of check, you know, are these pores saturated hydrogen?

[C]

I think the next two to three

[D]

years is really where the rubber hits the road, where people are finally gathering the data you need to confidently drill traps. I think that's when you're going to start to see discoveries.

[B]

Back to the question then, if I'm a ammonia producer and I'm saying, hey, Pete's showing up and he's gonna solve the fact that I don't have access to enough natural gas here to build a easily build a steam reformation plant. And I'm tired of trucking in hydrogen to produce locally. How much do I need to feel confident that I can set my plant on top of a well?

[C]

That you're gonna discover it depends on how big of a plant. There are groups that have developed, I would say more midstream, like ammonia conversion,

[D]

which could go down pretty small and could work with 10,000 tons a year hydrogen.

[C]

So multiply that number by 20 to

[D]

25 and that's kind of the way you think about a discovery size that's producing over 20 years.

[C]

So think about like a 200,000 ton

[D]

reservoir is probably a like a minimum commercially interesting reservoir.

[C]

And then think about if I'm going

[D]

to build a world scale ammonia plant, it's more like a two and a half million ton. So it's kind of an order of magnitude there.

[A]

And does that math change based on different hydrogen use cases?

[B]

If you're talking about sustainable aviation fuel production or you're talking about long duration energy storage or other things that hydrogen may be used for, do you have different size resources that you're trying to find or are you somewhat agnostic to that problem?

[C]

We've partnered with a company and we've got access to technology and people who want to build it out for actually

[D]

doing kind of small midstream like ammonia,

[C]

I can find something small and we

[D]

can start to put ammonia molecules in the market.

[C]

But that wouldn't make sense if I

[D]

made the discovery far off in a desert somewhere and the ammonia markets.

[C]

So that's interesting. In one area we're actually actively exploring

[D]

in the Philippines now, which is really exciting.

[C]

That's a country that their marginal power comes from burning diesel and 98% of

[D]

their energy is imported.

[C]

So if I find hydrogen in the Philippines, what you're going to do with

[D]

that is you're going to make power,

[C]

you're going to try to offset the marginal cost. And that's not only like a major

[D]

value in like hydrogen discovery, just the energy value. It's an energy security win.

[B]

Right.

[C]

Like the Philippines is the first country

[D]

to declare a national emergency when the Strait of Hormuz shut.

[C]

The Philippines has more hydrogen seeps than any other place on the planet. There is hydrogen seeping out of the ground. We're operating and exploring in an area

[D]

where there's a 10 megawatt energy hydrogen seep coming out of an area smaller than a soccer field fuel.

[C]

You know, maybe you make ammonia there because the Philippines Uses ammonia and fertilizer.

[D]

But you're probably just making power.

[B]

And that would just be. You'd put a fuel cell there and. And generate electricity out of it. Is that the idea? Or you just combust it?

[C]

Fuel cell, maybe? Honestly, you'd probably put a recip engine. It's just lower cost, but kind of the same application. And so, you know, if you've got

[D]

3,000 tons a year, hydrogen coming out of one well, you can go put 5 megawatts of energy on the grid.

[C]

That's just unit economics.

[D]

You can drop those on anywhere you want.

[C]

I mean, I even talked to a

[D]

group that wanted to do big power from hydrogen discovery, and we were kind of laying out, well, what does this look like?

[C]

And they were kind of looking at cost of gathering hydrogen to a central

[D]

location and building a big power plant versus just putting like a recip engine next to each well and using transmission to gather the power.

[C]

And, like, there's a lot of ways you can commercialize hydrogen. What's the word?

[D]

Some people say it's like the skeleton key. You can use it for power, you can use it for steel, you can use it for a sustainable aviation fuel fertilizer. It really comes down to price. Can you produce it at a price that's meaningful?

[B]

It's sounding to me most realistically that with natural gas, you can have a 300 megawatt natural gas power plant, and that's like, not abnormally sized. I think with hydrogen, it sounds like more realistically, you'll end up with a lot of smaller distributed plants. 5 megawatt, 10 megawatt, 20 megawatt resource.

[C]

I think it'll depend. So, for example, we're working in a

[D]

place in the Philippines where we're measuring gas at the surface that is flowing at a very fast clip. It's 9 million years old.

[C]

So 9 million years old, gas coming

[D]

out of the surface tells you it's coming from a really big accumulation.

[C]

Is that accumulation commercially producible? Is the porosity right?

[D]

Is permeability right?

[C]

We don't know if it is. And it's that big of an accumulation. You may be talking about 200,000 tons

[D]

a year of hydrogen being produced from

[C]

there, and you'd produce 300 megawatts from that production field. It really just depends on field size. I mean, the point I'm making is we have solutions for small fields.

[D]

Solutions for big fields are really, really easy.

[C]

It's squinting at small fields and saying,

[D]

okay, what would we do with this small amount of energy out here? You Know, on the coast of the

[C]

Philippines, that's the one where you got

[D]

to be a little bit more creative and thoughtful.

[C]

But some of these fields, I mean, look, we're looking at some things that

[D]

could be TCF, 2 TCF type size. I mean, we just drilled into something that our initial estimates might be 4 TCF. And we're, we're working the process on it right now. Like, that's a big field.

[B]

So from a power production, essentially, if you discover smaller resources, you can still build sustainable businesses. With the ammonia use case, you need a larger resource for it to be a viable facility. It sounds like it sort of depends on how you're planning to use it in terms of what size resource ultimately

[D]

you need to discover.

[C]

There's always going to be people who say, oh, you know, hydrogen is just a, if you find it too far away, it's going to be hard to use. And I think that's a rational view. If I find hydrogen out in a

[D]

desert somewhere and there's no electrical transmission, there's no power demand and there's no ammonia demand, if I can coax somebody to come out and try to put a steel plant there, great.

[C]

But there are places in the world where if you find hydrogen, it's kind

[D]

of a big deal question. It's a shoulder shrug.

[C]

Our goal is we filter those out

[D]

early on our ranking process. I have a good commercial team who's sold a lot of hydrogen and knows the business well.

[C]

And some places they say, you know, we know you guys love this rock, but we don't think we can sell it here.

[B]

That's a tough decision for you as the founder, right? Because you ultimately still need to have that Eureka moment where you discover a resource that's sizable enough that you can say, ye, we did it. And yet if you do it in a place where no one can use it, like you said, it's not really a business, so who cares? But it is from a science perspective. It's a big deal.

[C]

It's a really good question and I would say there is still value in that proof point. If I make some discovery in a far flung place, all the financial guys are shrugging their shoulders saying, what are you going to do with that? Well, it turns out the way that we're finding oil and gas today is

[D]

we basically go find big discoveries here

[C]

and then we go find an analog

[D]

basin over here and say, okay, this worked here, let's try there.

[C]

So there's still a lot of sort of learning value and exploration acceleration value

[D]

for making a Discovery and at least it's harder to market.

[C]

But yeah, it's. You got to weigh that against I really want to sell the gas.

[B]

You could argue that discovering oil in Saudi Arabia when it initially happened maybe wasn't in the most convenient location for using said oil. Right. It's just that oil is much easier to move around.

[C]

I think that's the difference is we can pretty confidently explore for oil in

[D]

really far flung places.

[C]

But if you just step back and look at hydrogen, hydrogen is going to be a little more like natural gas where the infrastructure to be able to handle it, move it, you know, gas, yeah. We can put it in lng, we

[D]

can put in pipelines, we can do stuff with it near the wellhead.

[C]

But nobody's really interested in finding gas

[D]

in like really, really remote places. It's hard to use. Right.

[C]

Hydrogen is going to be similar.

[B]

Pete, we didn't do the service of actually talking through your background and like why you're the guy to go try to solve this problem.

[C]

Boring.

[D]

Yeah.

[B]

But you know, you've got your credibility in terms of trying to solve this problem is pretty top tier. So maybe, maybe just give us the highlights here for listeners who don't have familiarity with you.

[C]

Early in my career I ended up

[D]

at Stanford in a PhD program studying engineering because I kind of wanted to be in the mecca of energy entrepreneurship

[C]

that lined up that right when I did that you started to see this

[D]

big ramp up of interest into Cleantech 1.0. I was lucky enough to get pulled into a solar company backed by Kozla

[C]

and Kleiner, that I was given leadership roles beyond my years because nobody really

[D]

knew what the heck they were doing.

[C]

And we ended up doing a really good job and we built a company, we sold it for good profit, good multiple for the investors. It was a solar thermal company. And I saw our industry basically dying

[D]

on the vine as silicon prices came down and natural gas prices came down down with the shale revolution.

[C]

And so I started to think about

[D]

fuels and what are we going to do with really low cost hydrogen rich fuel like natural gas. And that led me to founding a company called Monolith Materials, that's the world's leading methane pyrolysis business.

[C]

And that kind of ended me eyeballs

[D]

deep in the hydrogen business and no

[C]

intention of dedicating a career to hydrogen in any respect. But you know, when you're splitting natural

[D]

gas into carbon nanoparticles and hydrogen, you got to figure out how to sell both.

[C]

And so started to really understand who are the buyers and who are the

[D]

talkers who just wants to put something on their front 40 to greenwash the plant, who really wants to buy volumes,

[C]

really understand the market?

[D]

2018, 2019 rolls around, people started getting really interested in hydrogen.

[C]

I stepped out and took a role

[D]

in an oil and gas private equity firm that wanted me to build a, basically a clean fuels investment strategy, energy transition strategy. So I was looking at hydrogen and renewable diesel and geothermal and lithium, all the things that an oil and gas firm should be thinking about if they want to make money outside of their core area.

[C]

So I was kind of in this happy place, working in private equity, coaching soccer and raising my kids. And the breakthrough energy guys came to

[D]

me and they said, hey, we are really interested and we want to stand up this natural hydrogen business. We think we've got an angle. You've built hydrogen businesses, you've built businesses, you've know the oil and gas space well enough, like, come do this with us.

[C]

My first reaction was, guys like, give me a break.

[D]

This sounds too good to be true. Like hydrogen coming out of the ground. I mean, all these people are just

[C]

killing themselves trying to figure out how

[D]

to produce this affordably. And it's challenging. And they introduced me to Tom Dara, who's my co founder of the business. And Tom had spent 20 years of

[C]

his life basically running a small commercial lab while he was building his academic

[D]

career at Duke and then Ohio State.

[C]

But running this small commercial lab that was the world's leading lab for measuring oddball hydrogen samples. And like, that's a niche business within a niche business. But over time, he ended up with 30,000 samples of elevated hydrogen across the world.

[D]

And a bunch of Those samples were 50% plus hydrogen content at the bottom

[C]

of wells drilled for oil, gas, water, uranium. You know, when we started to look at that data and where it was

[D]

showing up and how this could accelerate an exploration program, it started to get really exciting. The science of hydrogen generation in the ground is very well established. People understand that. The question is, well, where do you start?

[C]

Where should an exploration program start?

[D]

And Tom's database really gave us a head start. We could use that for two things.

[C]

We could use it as not a drill here treasure map, but a bit of a.

[D]

Here are the best basins in the world world where the hydrogen systems appear to be most active. This is where you should start your exploration programs. And then also with this training data set, we could build AI tools, we could build a bunch of other things that we could back test against it

[C]

and just really accelerate. That's kind of how I ended up in this business. It was a bit of a rolling and tumbling into it. Ultimately I asked a couple of friends in the oil and gas industry, really accomplished explorers, to come in and kick the tires and diligences with me with the express request to talk me out of it. And in the end they ended up investing in it. And so that was kind of like I was stuck at that point. So I got it started.

[B]

I love it. Thanks for sharing that backstory. I had two questions that jumped to my mind as you were going through it. The first, which we didn't cover when we were talking about how the discovery may end up being used with natural gas, you talked about, hey, there's. It's usually some mix of gas and water and it has to go through ultimately a bit of a refining process before it turns into actual natural gas. What happens with hydrogen coming out of the ground at the plant itself? What processing needs to be done on it?

[C]

Normally when you produce natural gas and you produce hydrogen or you produce helium, you're going to take this through basically

[D]

a separator tank where the water is separated off from the gas and then the water is going to get processed, cleaned, re injected, disposed of, whatever's appropriate. And then you've got this gas stream

[C]

and there's no such thing as a

[D]

pure gas stream coming outta the ground. Maybe somebody in Saudi Arabia has found something somewhere.

[C]

But in general you've got your target

[D]

gas and then you've got some cats and dogs with it.

[C]

And with hydrogen, with the hydrogen we

[D]

found, what we tend to find existing with it is primarily nitrogen. Sometimes we see a little bit of helium, sometimes you see a little bit of methane.

[C]

The good thing is when we produce hydrogen commercially now in the world, we

[D]

run it through these steam methane reformers, you end up making this soup of hydrogen and CO and CO2 and methane.

[C]

And there are systems designed called PSA

[D]

pressure swing absorption systems or membranes that have basically been designed to be able to separate hydrogen out from those other gases.

[C]

So the great thing about Colombia, we

[D]

don't have to invent any of that. That has already all been designed, even

[C]

to the point we actually store hydrogen

[D]

in the ground today.

[C]

So the hydrogen well, the casing, the

[D]

cement, the wellhead, all off the shelf.

[C]

I can just go talk to an

[D]

engineering firm, say I want this, that, that, and they can do that.

[C]

So for natural gas, there's natural gas processing plants that purify the natural gas, dispose the other gas for hydrogen will do. Hydrogen processing plants and the engineering and

[D]

technology is 30 years old, 40 years old.

[C]

So very straightforward. It adds a little bit of costs. So the lower the purity the hydrogen

[D]

you have, the higher cost of separation and purification you're going to have.

[C]

But anything that you find that's sort

[D]

of 30, 40% hydrogen or above is going to be pretty darn competitive in the market.

[B]

And then the other question that jumped out of your backstory is you mentioned you got good at understanding what the hydrogen greenwashing flags were in the industry. There's this thing in the back of my head when I hear any pitch on hydrogen, which is like, what's the motivation here? And I'm not sure why I have that question. I think it's because so many of the projects are oil and gas. Sponsored. But I'm curious to hear your thought on what. Have you seen that you would qualify as like a clean energy story of hydrogen versus something that is a tax credit grab or something else like that in an oil and gas business?

[D]

Let me boil it down really simply. The cost of producing hydrogen from natural gas. I'll use American prices where gas is cheap. It's like a buck 30 a kilogram.

[C]

And if the gas is $3 or

[D]

$4, it's going to swing a little bit.

[C]

And then the cost of producing the

[D]

same amount of hydrogen over in Asia where you're driven by LNG costs is probably like $2 a kilogram of hydrogen.

[C]

So anytime you see somebody who's buying hydrogen for $5 a kilogram or $6 a kilogram, you have to ask this question. Well, why know there's going to be three reasons. One is just their volume use is

[D]

so small that their cost of delivery, of getting it from a truck just makes it. So you're not getting it at buck 30, you're getting it at eight because cost of delivery.

[B]

So that's the transport cost issue that we keep talking about.

[C]

Oh, yeah.

[D]

I mean, moving hydrogen by truck is really, really hard.

[C]

You know, if you're a small user,

[D]

like you're some semiconductor fab and you use a little bit of hydrogen, it probably makes sense for you to just drop a small electrolyzer on your plant.

[C]

And so like when you're paying this way high price, I get it. When you start thinking, okay, well I'm going to build a giant electrolyzer and it's still going to be challenging to hit those costs.

[D]

Then it becomes, okay, I'm doing this because it's a cleaner path to a product.

[C]

I don't want to cast stones greenwashing

[D]

is a term that's really pejorative from my standpoint.

[C]

I think a lot of companies want to do the right thing and they

[D]

want to figure out how to decarbonize their supply chain and doing something more cleanly.

[C]

The challenge I see is when it's completely out of the money, then it becomes.

[D]

It's a one off project that I'm

[C]

going to do, but it's not something

[D]

that I can just sweep through and do in all of my manufacturing lines all over the country. And that's where it becomes, okay, I'm

[C]

trying to do the right thing.

[D]

I'm hoping that I can get this cost curve to come down over time.

[C]

I mean, ultimately my view, and I

[D]

think you're starting to hear this more and more, is like if you can't see a path for something five years down the road to exist without tax credits or five or 10 years down the road, it's hard to justify wanting to do it. Born and raised in northern Utah, I've got a little bit of a libertarian bend, but I think the government's role

[C]

of creating tax credits to try to

[D]

incentivize technical innovation is great and I'm very supportive of that.

[C]

The government setting up sort of perpetual tax credits for things, I don't think it's a great way to think about it. I think we have to eliminate our. The way we think about ongoing, continuous

[D]

perpetual green premiums and just think about trying to find things that are really going to compete on their own two feet.

[C]

Maybe they need a little bit of

[D]

a push out of the gate.

[C]

That's really what attracted me to this. I constantly sort of say I don't

[D]

want to work in businesses where 20 years down the road, 10 years down the road, if a subsidy is canceled, the business is under. It's hard enough to build businesses and trying to predict what Washington's going to do is really challenging.

[B]

All right, just to wrap us up here, I think give me a bit on the current state of the company. You guys have raised a decent amount of money. You've talked about a couple of the projects you have underway. Maybe just bring us current with where you are today.

[C]

One of the things we've done, we shot out of the gate early, we

[D]

raised a lot of capital so that we could build an honest to goodness international exploration program where we were focusing on drilling the best wells in the best places. And that's hard to do. You have to have capital, be able to do it.

[C]

We drilled some wells, we got very confident in our ability to high grade

[D]

basins and know the right places to be working.

[C]

And then we built a land strategy

[D]

that is very broad and far reaching. And we went from basically 200,000 acres leased to about 20 million acres today. And those are across the U.S. in

[C]

the Philippines and Australia and Canada.

[D]

Through partners, we're going to be expanding into a couple of other countries very shortly.

[C]

So at this point we've got this massive land position and we are in the middle of doing the heavy lifting

[D]

now to really find the biggest traps and the biggest, biggest plays within all those different positions and high grading them.

[C]

And so like mostly we're in the 2D, 3D seismic.

[D]

We're in that knife fight right now and we're going to start drilling exploration wells at a pretty fast clip. And nine months is about when we're going to kick off. And then it's going to be like a well every month or two for the next two or three years. And I think that's when you're going to see big discoveries start happening.

[B]

With a land position that means you've taken out a lease on the land and own the underground mineral rights. Is that the idea?

[C]

Yes. So in the US you lease the mineral rights typically from private owners and

[D]

sometimes from the federal government.

[C]

It's fairly straightforward.

[D]

And you can do that through private deals.

[C]

Internationally, you tend to make proposals of

[D]

exploration commitments for blocks of acreage.

[C]

And so it's a different game internationally. You know, the Philippines, for example, said,

[D]

hey, we've got these blocks of acreage that we want to see explore. Because the Philippines, the government owns all the mineral rights in most foreign countries. And so they want to see a private company willing to come in and spend some money to assess the resource.

[C]

And so you basically win those nominations

[D]

by proposing a program, an exploration program.

[C]

And so it's a lot lower cost upfront to secure acreage internationally, this is

[D]

in the US and then it ends up starting to cost you because you

[C]

have to fulfill your commitments over time. And so it ends up being net, net equal. But it's a good way to balance

[D]

out, you know, U.S. leasing and global dominations.

[A]

How are you measuring success along the way?

[C]

We challenged our team to build a

[D]

really diverse and strong land position and they knocked it out of the park. So I checked that box. You know, we challenged the team to come in and really demonstrate expertise in basin selection and high grading. And we think we knocked it out of the park on that.

[C]

At this point it's really acquiring valuable

[D]

3D seismic and geophysics that's going to Give us confidence in traps.

[C]

Ultimately, the big box that needs to be checked is we have to achieve

[D]

commercial flow from wells.

[C]

That's it. Exploration is a kind of a binary thing. You can go out and drill a

[D]

lot of wells and if you don't find anything that's commercially relevant, if everything's either low flow or this or that,

[C]

you can talk a lot about how much you learned. But it's different from like building a

[D]

machine and trying to get it to

[C]

work and it kind of works and

[D]

then it almost works. It's like it's a very non linear value creation curve.

[C]

We're in that point where I think we've done everything right, we're building into it and like I think in two

[D]

years we're going to see some discoveries and that's going to be really exciting.

[B]

Where do you need help?

[D]

If you're talking about in dc, it's permitting reform. It's just being able to move quickly.

[C]

I mean this is like everybody, the

[D]

interconnect, the transmission systems, everybody's kind of suffering from the same thing. We kind of can't get out of our own way. In the US Great thing about working internationally is it's a little slow up

[C]

front, but once you've got it, the key stakeholder in the middle rights ownership is the government.

[D]

And so they tend to want to push you to go as fast as you can. And in the US you sometimes find that you've got lots and lots of people who can say no.

[C]

So that's an area where we're pushing and we're engaged with really great people

[D]

in D.C. with senators and congressmen who really want to do the right thing and want to push things along and

[C]

recognize if you want to change the way we produce energy or do that

[D]

and you want to get to cleaner energy sources, the only way through it is to build your way. You got to build your way through it.

[C]

There's no other way. So we've got a lot of people who are copacetic to that. You know the other area, we are constantly looking at opportunities and making deals

[D]

and discussions with large companies that have lots of data and so securing data, accelerating how much data we have access to. It's a big priority for us. This is a data game.

[B]

Are there areas of the ecosystem that need to be built out around you or do you feel like you're mostly able to leverage existing mature, whether it's oil and gas or other infrastructure? Meaning do you see areas where other startups, founders who may be listening to this could Think, oh, I could see how I could take my technology and help support this growing, emerging, whatever you want to call it, space of natural hydrogen.

[A]

What are those.

[B]

What are those gaps of, like, innovation that you think other players could help you with? I'll start.

[C]

One side is around geophysics data. Better, different ways to acquire geophysics data,

[D]

better ways to analyze it, process it.

[C]

You know, there's companies working on AI

[D]

tools to be able to interpret seismic faster.

[C]

I mean, a lot of those things are just, can you accelerate steps that

[D]

we're already taking with better and simpler tools?

[C]

I talk to people who, you know, have, you know, different mousetraps. They say, hey, here's a geophysics tool that I can mount on a satellite and I can see this. And we tend to look at those, and we look at those skeptically. But we're open to looking at new tool tools for the most part. Looking for natural hydrogen, you're using tools

[D]

that were developed out of the mining industry, the geothermal industry, the oil and gas industry, and then we have some modifications on top of that for how we're looking at the rocks that we're interested in.

[C]

You know, we have some really good partners who are sort of tuning the way they tend to use their tools

[D]

when they sell them to oil and gas companies or mining companies. And they're working really closely with us to figure out, okay, need to do it a little bit differently for you guys.

[C]

For startup companies, you know, there's groups kind of thinking down the road, where's the puck going to be?

[D]

What are good midstream solutions for natural hydrogen? You know, are you going to need to be able to separate helium from hydrogen in different ways than it currently is?

[C]

There's definitely some opportunities there. It's like, to be perfectly honest, if I'm going to take risks and skate

[D]

to where the puck's going to be on natural hydrogen explorations, I would want exposure to a natural hydrogen exploration company

[C]

because that's where the biggest upside is going to be.

[B]

It's a convenient answer for you.

[C]

Well, but yeah, that's my answer for the VCs, right? For the capital. But I also tell them, I'm like, if you want to take a compound risk and build something that's going to be really valuable, when I make a

[D]

discovery, you got to realize it's a much higher return for me than for you. And you're taking the same risk.

[C]

Like, building stuff on the front end, like the picks and shovels. Makes a lot of sense. I think building equipment that's going to be really useful in the success case. Like this is an honest answer, probably not a popular answer, but you'd be way better off as a capital provider getting into the exploration side than trying to say all that once natural hydrogen is a big thing, this little widget is going to be really important.

[D]

So I'm going to invest in that widget. Like that's probably not.

[C]

You're taking the same risk honestly, but

[D]

you're not going to have the same return.

[B]

Last question. You know, we all have in our head the, you know, now outdated 1930s era picture of an oil well where the black gold is coming out of the ground for the first time. I'm sure you have visualized this yourself to the day when you do make this commercial scale. Eureka discovery at Coloma. What does it actually look like? What does that day's experience like?

[C]

So number one, the black gold rain around you is actually a pretty big safety issue.

[B]

Said 1930s. I don't think they do that anymore.

[C]

Yeah, when that well blows out and there's a giant fire, like, yeah, maybe somebody's celebrating, but that's pretty scary. So what success looks like is you drill a well. And as you're drilling that well, you

[D]

get a big gas kick.

[C]

Your rig is designed to be able to handle that.

[D]

It's got it pressure compensators, it's got a blowout preventer, but you get that big gas kick and you know it's there. And so then when you're done drilling that well, you put a production testing unit on which has a flow meter and a flare on it. And now you're going to run this. And for 30 days you're watching this high volume come out of this well.

[C]

And after 30 days, the pressure is

[D]

still basically the same.

[C]

And that tells you your well is connected to a really big gas supply. If you're connected to a tiny gas supply, you might get a lot of flow on day one. And then day 30, it's a little squeak. So success means I'm flowing almost the same amount of gas on day 30

[D]

as I'm flowing on day one. And it's the gas I'm looking for. Then it's a high volume.

[C]

It won't be quite as dramatic as the raining thing, but that's going to be a really exciting moment. And we'll have that production data and

[D]

we'll have that well humming. And trust me, I mean every single shareholder, every single employee is going to be there and going to be celebrating. It's going to be a big giant party.

[B]

Amazing. Pete, thank you so much. I learned a ton. Really appreciate you taking the time to share more about the exploration you're doing, and it's a unique thing in that you are truly trying to find a new resource on this great earth we all live on.

[C]

Well, thanks for having me.

[D]

I appreciate it.

[C]

This is a big swing, but it's a lot of fun and we're enjoying every minute of it. All right, cheers.

[A]

Inevitable is an MCJ Podcast. At mcj, we back founders driving the transition of energy and industry and solving the inevitable impacts of climate change. If you'd like to learn learn more about mcj, visit us at MCJ VC and subscribe to our weekly newsletter at Newsletter MCJ vc. Thanks and see you next episode.