E60: Keeping methane out of the atmosphere by using it on Earth, with Windfall Bio

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Episode 59 • 26th February 2024 • The Keep Cool Podcast • Nick Van Osdol

Nick:

All righty, Josh, welcome to the Keep Cool Show. It's wonderful to have you on.

Josh:

Oh, thanks, Nick. Thanks for having me.

Nick:

I always like to dive right into the deep end. Why don't you give folks kind of the zero to 10 on what Windfall Bio is, what the mission is, and how you got started working on this problem?

Josh:

Yeah, so Windfall Bio is a nature-based technology company where we take natural organisms from the soil that are able to reduce methane emissions, and methane is one of the worst greenhouse gasses out there, and actually turn them into valuable products for agricultural systems, basically replacing synthetic fertilizers. So my background as a biochemist and a biologist, I've been working in Silicon Valley in industrial biotech for the last 20 years, and I'm really excited to be able to start applying, you know, what I've learned in that industrial biotech space into the climate space.

Nick:

Excellent, yeah, and it sounds like this is, you know, already going to hit on multiple kind of grand climate challenges. Methane, obviously being the first one that you introduced, is a significant one. I think by some estimates something has like up to 30 percent of observable global warming that's already been experienced by our planet over the past two centuries since the Industrial Revolution is attributable to methane. And yet it often feels like all of the attention flows to CO2, and rightfully so to a certain extent. That's a big component of the conversation, but I'm certainly glad that we're able to have this conversation and give folks some perspective on just how important methane is to all of this. And then also potentially maybe a little nitrous oxide conversation as well, inherent to displacing need for synthetic fertilizer. So the table is set and a lot of good stuff for us to talk about.

Josh:

ts. And if we have targets in: 2030

Nick:

Right. Yeah, I couldn't agree more. I often sometimes, it might not be the most, I'm still working on kind of the terminology and the phrasing here, but I sometimes think of, Dramatic methane mitigation over the next two decades is something that could really like grant cover To the deeper decarbonization that needs to happen It's like there's a lot of technologies that are excellent that are being developed to reduce co2 emissions across all kinds of different Industries and sectors but just like solar on wind and EV batteries have enjoyed over the past 10 years they need another 10 or 20 years to mature and get more efficient and come down your cost curve and and meaningfully reducing methane emissions would be a great way to decelerate global warming to kind of provide more time for everything else that needs to happen.

Josh:

Yep. And it not just decelerates, it can actually reverse in the short term. So the CO2 goes in the atmosphere and then it stays there forever, right? So it's not a rate problem, it's an accumulation problem. For hundreds of years at minimum. Yeah. But methane is different, right? Because methane, it gets produced quickly, but it disappears quickly. So what you actually have is a just dropping into science terms, it's a dynamic equilibrium. So it's a difference of rates. And so what that means though is very small changes in the rate of production or the rate of destruction can have big impacts on the concentration in the air because it's actually moving around all the time in dynamic equilibrium. And our problem is we have gone out of, we haven't been tracking methane, and so methane's actually been going up in the atmosphere over just the last 20 or 30 years, and it's been increasing a lot. And that's, again, that can be a very small difference in the rates of production and absorption that's happening on the ground. And that's both a problem, because small differences that we're not paying attention to have big outsized impacts on temperature, but the flip side is a positive, where if we come in and start making smaller You know, incremental changes incremental changes right those those have big outsized impacts on climate and can actually create meaningful reductions and cooling of the atmosphere by reducing the concentration in the atmosphere. So again, small, small changes in the rate of output will actually reduce the concentration of the atmosphere. Whereas with CO2, like the models show, even if we stopped all CO2 emissions tomorrow, the concentration of the atmosphere would still go up and we would still have warming for the next 20 or 30 years increasing before the CO2 actually starts to come down. Whereas methane, if we stopped it today, the concentration of the atmosphere would drop almost immediately. So that's a huge benefit in terms of short term. The other side, because the warming of methane is so much higher, like if I'm gonna pay money to capture a ton of carbon out of the atmosphere, I would much rather, if I'm gonna say I've got a million dollars to spend, I can capture a thousand tons of carbon out of the atmosphere. If I capture a thousand tons of CO2, That's the equivalent of 1,000 tons of CO2. If I capture 1,000 tons of methane, that's almost 100,000 tons of CO2 equivalent in terms of warming.

Nick:

Yeah, if we take a 20-year timescale.

Josh:

-year targets for: 2030

Nick:

Yeah, always a yes and conversation It's tricky to get caught in that scarcity mindset of you know, we can only pick one or the other but I don't think Certainly don't think that's the way that we should be thinking about it Yeah, this has been a really I think, you know, hopefully for our listeners a very compelling kind of world building on why methane is a very valuable space in which to be working. Before we dive deeper into the business and the technology itself, I'd be curious just to, you know, pinpoint when in your kind of trajectory of your career, you decided this was a problem that you were both well suited to approach and quite interested in tackling.

Josh:

working in methane around the: 2010

Nick:

Lots of staggering stats came out of that area. I think it's still something like only 10% of corn in the U.S. is actually used to feed humans or invented to be used as feed in general, I don't know, but something like that.

Josh:

That was really challenging, but that was looking at, well, why is sugar not a great feedstock? We know that biology is really good at making all of these chemicals. In reality, all the petrochemicals, all the fossil fuels, everything, that's actually the product of biology. It's just biology that happened millions of years ago under the ground. So even things like natural gas came from biological processes. So we know biology is good at making those things, it's just we need a better starting point. And so in the U.S. anyway, this was around the time when methane started to become, you know, natural gas became very cheap and abundant. And so I was looking at, you know, things that we could do with this that would be better than burning it, right? Because today, you know, the best use for natural gas, right, you light a match, you burn it, you turn it into heat or energy. um and that's you know better than letting it go directly into the atmosphere all right so it's certainly better to do that but there should be better things we can do with that carbon because the other thing i didn't touch on it before the other big difference between methane and co2 co2 is the definition of a waste product it's the end product of combustion it's the lowest energy form of carbon Anything you want to do to modify, capture, sequester, it always requires energy. And energy's expensive. So if you're starting with CO2, everything is uphill. Methane, though, is a fuel, right? Again, natural gas. It has value. If I have methane to make... Super versatile product, yeah. Exactly. And I can put it in a pipeline. I can get paid for it, right? There is actual value to that methane. So if we can capture that energy and that carbon and we can turn it into valuable products, We can create better incentives, we can let the agricultural products stay as food, and we can turn the natural gas into things that actually displace other forms of carbon. And again, we can keep it out of the atmosphere. So it should be a win-win across all cases. And so started looking at, well, what are the biological systems that can actually, because we're very familiar with sugar as a feedstock for biological systems, right? You know, all of us I think are familiar with yeast, right? And you feed yeast sugar, you get alcohol, you get bread, right? These are all great things and probiotics and your yogurt, right? All of these things. And we think of those organisms and yeast and bacteria as eating sugars, which they do. And so the question is, well, can you find the same thing for methane? And in the end, the short answer is yes. And the thing is, in nature, there's no such thing as waste. The output of one process in nature is the food for the next one. And if there's energy there and available, something will evolve to use it because that's what living things do. And so it turns out, you know, methane is no different. And there are these organisms in the soil that we call MEMS that are basically there to eat methane. And they eat that methane. It's their only source of carbon. It's their only source of energy. And just as an analogy, everybody's familiar with trees and plants. And we think, well, plants eat CO2 and they pull CO2 out of the atmosphere. Again, the difference is that they need energy, right? So the plants are taking the energy from the sun and they're using that to take the CO2. So their energy and carbon are coming from different sources. MEMs have actually been around longer than plants. They're older. They've been on the planet millions of years longer than plants have been around. but they are microscopic and they live in the dirt. So we don't see them. We don't touch them. We can't, um, you know, we're not as familiar with them, um, even though they are just as natural as trees. And again, the difference is because the methane brings the energy along, they don't need sunlight to work, right? They're able to just live in the dirt. If they get access to methane, that gives them all of the nutrients and energy they need to survive and grow and basically consume this methane. And their normal role in the environment is actually to prevent methane from getting into the atmosphere. So they'll sit in this sort of top layer of dirt and wherever there's decaying organic matter that's producing methane, they will sort of sit above that, eat the methane and prevent it from getting into the atmosphere in the first place. And so that's their normal role in the environment. They're there to feed everything else. They capture methane. Great. That's exactly the type of natural cycle we want to promote. Yeah. So, so being able to turn that into a, uh, industrial process is obviously a little bit more tricky. So we spent, uh, I started a company called Calista. We spent about, um, 10 years sort of working out the details of the biology, building an industrial process and, um, and scaling that up. And we've, uh, Calista has now gone and built a, the world's largest alternative protein production facility plant in China produces 20,000 tons of protein per year. with natural gas as the primary feedstock. So it's taking pipeline gas coming in and high quality protein coming out. So that's a clear demonstration that this works and works at scale.

Nick:

I like to think that I've canvassed everything under the sun in climate and energy over the past three years, but I had not heard of that. Thank you for an introduction to something completely novel that I hadn't heard of.

Josh:

Yeah, absolutely. Aside, it doesn't need to go to the podcast, but we can provide the links to the website and all that sort of stuff. Beautiful. That process is up and running and works. Yeah, the the real scale of that is to displace animal feed and it displaces high quality fish meal and fish meal is also kind of an unsustainable resource right there because it's literally what it sounds like it's trawlers that go off the coast of South America and Africa, they scoop up anchovies and sardines out of the ocean. They bring them back on land, grind them up, dry them down, and then that becomes the protein ingredient for a lot of animal feeds and aquaculture feeds. Obviously, if you're scooping a lot of fish out of the ocean, that's not a very sustainable approach. The process, again, at Callista is really about intensification, large-scale production of protein. It really needs those concentrated sources of methane. The thing is that the organisms out in the soil, in the dirt, when they're out there just growing in the field, They're not getting 99% pure methane at multiple atmospheres pressure coming out of a pipeline. That's not their normal environment and food. They are really good at essentially just taking methane directly out of the air, very low concentrations, and turning that into nutrients in the soil that feed the other microorganisms, feed the plants. And that's what led to the starting of windfall is the realization that, hey, we can really mimic this natural cycle in a much better way. We can find uses for methane that create localized valuable products. that can drive a profitable business model without needing to rely on subsidies or external carbon credits or other factors.

Nick:

ck to kind of windfall bio in: 2023

Josh:

Yep. And honestly, the business model was kind of the biggest innovation in this whole process. Again, as we said, we use natural organisms. And from that respect, we don't see, there's not a lot of technology risk. So in the same way, right, you plant a tree, it grows, You know it had to have absorbed a bunch of CO2, because that's the only thing it can grow from. So when we grow these organisms, we know they're eating methane, they can't eat anything else, and we know they're preventing that from getting into the atmosphere, and we know they're producing the products that they need to produce. The customers that we go after, so just say the organisms that we use, the MEMS, they don't care where the methane comes from. A molecule of CH4, if it comes from a cow, if it comes from a rice paddy, if it comes from an oil and gas facility, if it comes from a landfill, those molecules- Decomposition of biomass or something like that, yeah. Yeah, because one, methane comes from everywhere, and that's really the challenge. It's coming from both natural sources and man-made sources. Again, the atmosphere doesn't care where that molecule originated from. It's going to warm the atmosphere exactly the same amount. So we are interested in capturing all sources of methane. And the organisms we use, right, all of that is food to them. So regardless of where it came from, they see it as food. If they come into contact with it, they will eat it. Again, that's what living things like to do. And so, yeah, they're really good at both eating food and making more organisms, right? So it's a win-win on that regard. The industries we work with are extremely broad, from agriculture to oil and gas, again to waste management, landfills, because again, methane comes from all of these different sources. Our business model also then has to be very flexible, because while the methane is the Industries are different, the infrastructure on the ground is different, the operators and the training level and the expertise and the capital available are all different. Right. The concentrations of methane are different. And the concentrations of methane are different. So, yeah, the intensity, the flow rates, right? Thinking about, you know, large natural gas fired power plants, right? And the flow of gas coming out the back versus the flow of gas coming from a cow barn ventilation system, like orders of magnitude different. Yeah. So how do you engineer to make sure those things work? So, you know, where we've come down to is, is really streamlining our business model such that we sell the microbes and we provide the support, um, for the operator, whoever, whatever industry they're in to help them, um, perform the best practices, uh, get the gas flows to the organisms in a, a, um, a mode that gives them enough time to eat it, because that's the biggest thing. If you have a gas flow at 500 cubic meters per second and you've got a little pile of dirt, there's just not enough time for them to eat the food before it blows out into the atmosphere. So we need to engineer those solutions, get them, it's all about residence time. But each individual operator can adapt that and customize it for their own facility. And they, so again, we sell them the microbes, they capture their methane, and the organisms, the MEMS, turn that into nitrogen-containing fertilizer on site. And if it's something like a dairy farm or a rice farm where they're using a lot of fertilizer, they don't need us for anything else. They're just gonna, they're gonna capture their own methane. That immediately turns into nitrogen for them. They spread it on their own field, and they end up saving money on the fertilizer they would have bought anyway. So for the farmers that we talked to in those areas today with the pricing and the things that we're putting in, we're seeing that at least in North America, farmers would be expecting to save about 50% on the absolute cost of nitrogen in the fertilizers that they would have bought anyway. So by just putting this in, again, they're reducing methane going to the atmosphere, which is great. But what they get paid on is they're actually buying less fertilizer, and they're putting less ammonia, less urea, less nitrate into their fields, which has the add-on benefit of less runoff, less eutrophication, and less nitrous oxide, going back to your earlier point. So that's all a complete win-win for those farmers. They're saving money. It's more efficient for their field. It's better for the environment, and it's better for the climate. For, you know, the landfills and the oil and gas operators, the people with, you know, they have a lot of methane and they have way more methane than most, you know, small dairy farms or things of that nature. But they obviously don't plant a lot of crops, right? They don't use a lot of fertilizer.

Nick:

Yeah, they don't have an immediate way to kind of save money on their fertilizer costs.

Josh:

ing we saw in, I think it was: 2022

Nick:

Yeah, and it has to be sustainable, it has to be valuable to a whole suite of stakeholders who can find the same benefit from it. And yeah, I love that reframe. So often when we think of sustainability at this point, you know, it calls all of kind of the green elements to mind, but it's also, you know, good to re-expand that and be like, okay, like sustainability also means for the people out of working, working at a company, you know, is that sustainable for their lifestyle? Is it generative to their energy and their passion? Yeah, there's so many different things that are subsumed by the, by the word sustainability. And thank you for that, that overview. There were so many interesting things that came out of it just to, you know, try to catalog some of the potential benefits here. Obviously there's significant potential to mitigate methane emissions, which is important. I also really enjoy the reframe, which I often come back to of, you know, this is ultimately like a resource that we should be valorizing. It's not, methane in and of itself is not you know, it's not bad. Like we can't blame methane for, you know, the global warming that it has in the atmosphere. We just haven't really learned how to engineer the systems and the structures in society to make full use of it in a circular beneficial capacity versus one that's net negative. And, you know, again, we've touched on some other very valuable components of this, which is, you know, synthetic fertilizers are important. They feed something like half of the global population. Without them, we'd be completely lost. But we do need to find ways to create fertilizers in a more sustainable, again, fashion to continue feeding the world populace without producing nitrous oxide emissions, which have something like a 300x global warming potential factor compared to carbon, and also, as you said, have other negative environmental impacts on water and stuff like that from agricultural runoff.

Josh:

Yeah, no, it's a good point, and I don't want to come across as saying synthetic fertilizers are evil and we need to get rid of all synthetic fertilizers, right? That is absolutely not the message, or we Fertilizers are critical. We need them to grow crops. We need a blend and a mix. There are good reasons why ammonia is the fertilizer that everyone uses. And we should be using that and other things. And the problems that come with ammonia are typically when it is over applied, when you put too much on the field. And if it's the only thing you have, then you're always going to put too much on. So we see our product very much as a blend. You need a little bit of ammonia because you need highly available If you want crops to germinate quickly and grow fast and produce, which we all do, you need that ammonia at the beginning where it's very highly available. But again, if you're only putting on the beginning, then it's going to run off by the time that the crops are big. So having that sort of mix of organic and synthetic nitrogen can be hugely important depending on the specific crop that you're growing. So, yes. It's a good point. I don't want to come across, you know, we're not ... I'm not going to say you did by any means, yeah. There are good reasons why that's being used and why it's there and why it will still be there. We're trying to fit in and create value in the system, not tell people. what they should be doing or what they shouldn't be doing. That's certainly not our role.

Nick:

Yeah. And I know that, you know, you're constructing your business in a conscientious way to not rely necessarily on public sector tailwinds or subsidies or carbon credit, carbon equivalent credit markets. But I think it is worth briefly noting that there are also, you know, significant tailwinds, especially if you look at certain European countries. The Netherlands, for instance, is thinking very critically about how to make their entire agricultural complex more sustainable. So there certainly is also public sector top-down pressure coming that's ultimately, you know, forcing farmers to think about how do we make our system more sustainable, and it's a very difficult thing for them to navigate because a lot of farming is ultimately a commodity, razor-thin margin business, and so fundamentally these folks need to be empowered with new solutions to be able to continue to stay in business, to continue to feed the world populace, while also navigating some of the You know, for them, it's more of a headwind almost of like, OK, you're telling us we need to cut our methane emissions by X amount by this date. Someone please tell us how you expect us to do that, you know?

Josh:

Right. Right. Yeah. And we see that kind of over and over again. You know, a lot of there there's technologies on the market to reduce these things, but they're they're pure cost. Right. So and if you're asking a farmer to just pay more for operations, that's like you said, razor thin commodity margins. They're also risk-averse for very good reason. The quote I've heard, if you've only got 30 or 40 chances to make your product in your lifetime, that's it. That's how many growing seasons. If you screw up, those are big impacts on your bottom line, on your total productivity. There's a big hesitance there for, again, very good reasons. change what they've been doing in different ways because it can have huge negative impacts if it goes wrong. You're right, there's absolutely some areas. We don't want a business model that depends on subsidies to work, but certainly if there are subsidies there, if there are credits in place, we certainly see those as beneficial and we'll take advantage of them. We'll help our customers take advantage of them to the extent that we can. There are other sources of methane. We can talk about a landfill and lots of farms that are nearby to landfills and things like that, but when you think about, say, like an oil rig out in the middle of the ocean, it's going to be hard to get fertilizer from that site out to a farm somewhere else. Those are cases that it might make sense for governments or corporations incentivize people to actually capture that methane and then because you're not going to be able to use that fertilizer, there isn't going to be an economic driver to capture that particular source. We also see opportunities for large-scale applications out in the environment. So when you think about Arctic permafrost and the amount of methane that's coming out of that as the everything warms is pretty scary. And these are the things that have the opportunity to potentially create these massive tipping points, right? Because the Arctic starts warming, it releases methane, creates more warming, which then melts more permafrost, right? And you have these positive feedback cycles. And those are the things that can drive massive amounts of climate change in very short amounts of time. And yeah, when you start thinking about that, those are the things that keep me up at night. Those are the scary things.

Nick:

e to bring this back again to: 2024

Josh:

Yeah, so we use the example of a dairy farm quite a bit, and I think dairy farms make a lot of sense because they have the full value chain on site. So we think about a dairy, typically you've got cows in a barn, the cows are burping and exhaling methane as part of their enteric emissions, and so that goes into the you know the air in the barn and there's usually a ventilation system that's blowing the air through so you know the cows have fresh air and all that so you have a stream of air with some methane in it. The cows are also producing manure constantly and the dairies typically flush that manure out of the barn so using water and then they separate the solids from the liquids. The liquids go into a lagoon where basically that turns into the equivalent of an anaerobic digester and it also produces methane. And in these situations, it's about 50-50 roughly, so about half the methane the cows produce are coming from the burping, half of it is coming from these manure lagoons. And then the solids from the manure, they'll get put into piles that are composted. And so the farmer will put those into a pile on site. They'll have somebody go out and turn those compost piles every couple of weeks with a backhoe, or sorry, twice a week or so with a backhoe. And then they will After a couple of months of composting, then the farmer takes that compost, spreads it on the field, and because they're also growing crops to feed to the cows, alfalfa or grass or corn or something of that nature. But there's usually not enough nitrogen in that compost, and so they're also buying synthetic fertilizers to blend with the compost to get enough nitrogen so the crops grow efficiently. And again, that saves them money on feed, so it's a nice circular version. In that scenario, the compost actually turns into a great home for the MEMS because they normally live in dirt. Compost isn't that different from dirt and we want the compost to be aerated and exposed to as much air and oxygen as possible because that's what composting is and that allows the breakdown of that material to make it a good fertilizer. So the farmer buys the MEMS from us, blends it into the compost, the solids, the manure solids as they're being separated and formed into compost piles. And then essentially the farmer can then connect the airflow from the barn and the manure lagoon to blow through that compost pile. And the MEMS live in the compost. They pull the methane out of the air. and they put that carbon and nitrogen directly into the compost pile. The farmer then, when they go to spread the compost on the field, they test how much nitrogen is there, and then they, based on how much is there, they buy less synthetic nitrogen. So when they blend, they're still adding the exact same number of molecules of nitrogen onto the field, just more of it is now organic, less of it is purchased. So that's where they end up saving that money. Simple fits right into what they're doing and doesn't require them to change practices pretty much at all. Understood.

Nick:

All right. So off the record, just for my own context, we are picking up perhaps a month or two later after we left off and we had done some good work kind of digging into the nitty gritty of a case study of all the different ways in which windfall solutions can be super beneficial to, for instance, someone, you know, someone operating a dairy farm. I guess one question I also have, Josh, is, and this is still off the record, to what extent would you be able to go into like a specific company or customer example? Or is that not so easy?

Josh:

At this stage? Yeah, we haven't publicly announced any of the partners or deployments. So yeah, I don't think I can talk specifics about customers.

Nick:

No problem. Yeah. I guess, you know, is there beyond having done some good work decomposing the work that could happen at a dairy farm, are there some other examples that you think would be readily appreciable and interesting to folks listening in that you also get excited about? I think we'd also already covered opportunities to maybe even go as far afield as like the Arctic where there's permafrost melting that could potentially be releasing methane and stuff like that.

Josh:

Sure. Yeah. I mean, right now I can say we're also working on methane coming from landfills and waste management. some anaerobic digestion projects, which is in kind of manure and waste management more broadly than just dairies. And then also really excited about the opportunities in oil and gas and something that's actually changed since the, or new developments since the last time we talked. So EPA has actually released a bunch of new regulations on methane emissions for oil and gas operators in the United States. And that we think is going to really be an opportunity for us. So there's finally a strong incentive for these oil and gas players to reduce a lot of their fugitive emissions, reduce a lot of their incidental emissions. And yeah, that's something we can certainly apply our technology to.

Nick:

Yeah, it feels like in: 2024

Josh:

There is, but even alongside of that, a lot of it is not being retained, right? So, IEA has been like every single year. So, one, I agree with everything you said. I'm just like the counter. Yeah, the nuance is great. It becomes a little bit counterintuitive. For the last 10 years, IEA has published a list of methane sources ranked by the dollar value of the methane that could be captured relative to the cost for capturing it. And roughly 50 percent of the methane they track is negative with the idea that if a company captured it, they would be saving money. And yet, every single year, it's exactly the same. Yeah, so you would think like, if the incentives were aligned in the right case, right, you know, after the first year, you wouldn't have seen any of those negative value methane anymore. And the fact that it still persists year after year after year. It tells you that the calculation isn't quite right. So even though they could get more money from capturing that methane, generally there's an opportunity cost and there's a cost. And so if you're an oil company and I have a million dollars to invest, I can make a small return by capturing the methane that I'm wasting today, or I can make a big return by opening up a new oil field or something like that. And so those are the calculations that are really being made as opposed to, can I save money on this methane? So this is why these new EPA regulations are so important, because they're actually going to start penalizing the oil and gas companies for those emissions. So it's no longer just a, well, you know, it's an opportunity cost. Now it's an actual fine that, you know, if you do this, you're going to be paying money directly to EPA for doing it. So hopefully they'll start changing the calculus.

Nick:

rly polling around, you know,: 2024

Josh:

Yeah. And I think the most important thing for me, yeah, I think you're right. So methane is definitely becoming more prominent in the messaging. But but also, most importantly, for me, it's methane discussed as methane, as opposed to just CO2 equivalents. And historically, you know, we've just been using the language like, oh, you can just turn everything into an equivalent of CO2. Yeah. You know, and what, you know, basically just implies that CO2 is really the most important and only important thing. But now, Yeah, people are talking about methane reductions as methane reductions. And I think that's really important. Going back to what you said before, there is a fundamental difference in the mechanism of action, the rates, just the turnover and the impact in the atmosphere of methane versus CO2. And you lose all of that nuance by creating some formula to turn it into a CO2 equivalent.

Nick:

y. And we so often talk about: 2050

Josh:

your target is, and you said: 2050

Nick:

Yeah, it's like I deeply appreciate the impulse to want to make, you know, stand to use standardized terms. And I even just think about something like GDP being such a prevalent measure of economic strength or health of any economy. And it's like, well, you standardize everything to one measure. It certainly reflects a lot of things about an economy, but by no means does it reflect everything. You know, folks are going to optimize for production to the more that you focus on GDP. And in the same way, the more that we focus on CO2e or the CO2 equivalent of any greenhouse gas, like that's always to some extent going to enshrine more focus on carbon dioxide when in reality, the problem is much more complex.

Josh:

Yeah. And that's exactly what happened. And, you know, I was actually trying to get windfall funded and started about eight years ago was the original pitch. And, you know, just couldn't get anybody excited about a methane related technology. And everyone would say, like, we have a mandate to, to deal with carbon dioxide and to remove carbon dioxide from the atmosphere. But methane is just not, not a focus for us. Which is, again, it's exactly what you're saying. This focus on CO2e creates this really perverse negative incentive to only deal with CO2. And even today, there are still groups of people I go and talk to, and they're like, yeah, we're really focused on taking carbon out of the atmosphere, but we don't care about methane. And it just completely misses the point that one in methane is carbon. Yeah, but so again, and it's just become this, you know, carbon and carbon, carbon is carbon dioxide, carbon dioxide is the only form of carbon that matters. And it's just putting these blinders on and really restricting the discourse and the focus. Yeah.

Nick:

The words that we use. Yeah. I mean, even decarbonization has become sort of a stand-in for global climate action. I do my best to try to remind folks that carbon dioxide, not the only driver of global warming. Global warming, hardly the only problem subsumed within climate change.

Josh:

Absolutely. So that's where the more nuanced view, I think, yeah, it's important. And again, I'm going to go back to the positive. I think people are starting, real stakeholders, government regulators, all of that, the language is starting to expand. And the focus has expanded. And we do have COP28, a bunch of announcements and targets specifically around methane and methane reductions, not talking about CO2Es. EPA's new regulations are creating fines for methane emissions that are based specifically on tons of methane emitted, not CO2Es. And yeah, so I think it's certainly moving in the right direction. And I think it's up to us to continue that. And not just methane, there's other things. Nitrous oxide is another huge driver of climate. Definitely. Which has no carbon, so it can expand the language. So yeah, all of these things are important.

Nick:

he beginning of a new year in: 2024

Josh:

Yeah. So for: 2024

Nick:

ont and center for you all in: 2024

Josh:

Absolutely. Yeah. And again, not a bad problem. And it's reflective of, you know, traction with the customers and going back to what we were talking about with recognition of methane as a real problem, we are seeing a lot more people interested in reducing their methane footprint specifically. So again, I think it's a great sign that the industry and the perception is moving in the right direction. But again, yeah, it's something we need to work through. And just need to do it faster than we were initially planning on.

Nick:

Yeah, makes sense. Are there other kind of key hurdles or roadblocks that come to mind for you as you think about the year? Obviously, that's plenty for one man and one team to focus on what we just covered.

Josh:

Well, yeah. And we're growing our team. So we're trying to bring in more. We need more people to address the demand that we're seeing. We are looking at a bunch of different verticals. I know we talked a lot about dairies, but we work in landfills and oil and gas, in waste management. Methane comes from so many different places within both man-made sources, natural sources, waste management and byproducts of oil and gas and other operations. There's just so many different areas that we can apply to. That's part of why our customer base is expanding faster than we expected. adapting the technology, adapting the product specifically to each of those different industries, doing pilot projects for different customers, making sure that it works well, optimizing it within each of those different verticals. So the specific deployment on a landfill is obviously going to be a little bit different than a dairy. And so just making sure we can meet our technology KPIs and productivity goals and create the value for the customer in each of those different areas. And making sure it's customized and tweaked in and works well is certainly something that we're working on.

Nick:

Yeah. And I imagine that measuring the impact of the solution can vary somewhat by application, or is that something that's actually a bit easier than some of the product specification?

Josh:

I'd say for most of them, it's a bit easier. There's certainly some applications, especially land applications and rice farming is one that we've looked at a lot that's really hard to measure just because it's so distributed and there's not a lot of infrastructure available typically in the areas where you're growing rice. But for most of the, like a landfill, for example, tends to have a fairly defined stream of gas that we can measure. the methane going in into our biological systems, we measure methane coming out, we measure the nitrogen that the system captures, so we can usually track quite well the the methane that's being consumed, which is then methane that's not going to the atmosphere. And the nice part, going back to the comparison of methane versus CO2, the nice part, once methane is consumed, thermodynamics says it doesn't go back. So there is no long-term, with CO2, you capture it, you have to put it in the ground, you have to certify that it's going to be locked up for a hundred years and everything to be able to claim that your credit is real or your impact is real.

Nick:

Yeah, you have to get a permit for a class six well in Wyoming or Louisiana or one of the few states where that's where the state actually has the jurisdiction to do it, etc, etc.

Josh:

Yeah, all of those things are challenging. But but with methane, again, once you if you take the methane and you turn into something that's not methane, by definition, it's always it's going downhill energetically. So the thermodynamics says nothing wants to go uphill. And so once you once you turn it into something that's not methane, it doesn't go back. That permanence is an important feature of any kind of climate impact technology. How permanent is that? transforming methane, consuming methane is 100% the most permanent solution that you can come up with. So from that side, it works really well.

Nick:

Yeah, if you have a good book or paper or reference on that, I'll probably bug you for that post post call. But yeah, I mean, it also sounds like, you know, we kind of spoke to or you spoke to that, yes, methane does come from many, many sources. And that's certainly true. But what's exciting for me and sort of hearing about y'all's progress is it sounds like you have a lot of really meaningful ones covered. If you look globally, enteric fermentation and farming is one of the most major sources. Oil and gas is probably pretty equal or close to number one and certainly is the second largest source, if not the largest source. Landfills are a really meaningful one. Wastewater treatment. And obviously there are others in the man-made category. We hit on rice. There's coal mining, hopefully the coal mining one. that solves itself a little bit as the globe makes some efforts to shift off of coal. It certainly won't solve itself inherently just by virtue of that.

Josh:

No. Well, and the thing about coal is, I mean, the coal will emit whether you're actively mining or not in abandoned mines, orphaned mines. you know, even when you shut it down and stop mining, they are still major sources of methane out there. So it's not something that just goes away because we stopped using coal. Good point. So that that's something that absolutely we're looking at it and, you know, as a way to kind of mitigate the long term impact of the existing mines. Makes sense. So, you know, absolutely. You know, we should shut them down. We should stop using coal. but we also need to do something to reduce those emissions going forward. And rice farming doesn't really get talked about as much. I mean, you just put it in your list, but rice farming is number two in agriculture right behind enteric emissions. I mean, it is a big emitter and it's all over the world. And it's really, and again, I would say, It's something we're looking at. That's probably one of the more challenging aspects for us to go after just because it is so distributed. But, you know, if a technology is going to work there, a biological technology like ours that is able to work in a more distributed fashion, I think it's going to be one of the better alternatives to it. So, yeah, the challenge is like every single one of those sources you mentioned, the format is a little bit different. Methane is methane, but the form that the gas comes in, the flow rates, the concentrations, like all of those details matter. And how do you plug our technology into that infrastructure and have it work and have you create value for the person who is actually deploying it on their site is a little bit different. And that's where, again, this sort of customization comes in and us needing to understand each of those industries, making sure we can work with the operators in a way that makes sense to them. Our philosophy is that we want to create value. We want to create profit for that operator, create the inherent incentive that makes them want to capture that methane, not just for climate, but because it's actually good for their business and impacts their bottom line in a positive way. For that, we do have to understand their operations. You can't just tell them. expect to throw it over the fence and tell them to figure it out because that's not a successful strategy.

Nick:

hat else as you look ahead to: 2024

Josh:

Yeah, it's a good question. I think there are a lot of really interesting approaches that are being taken. And when we go back and look at what are the major impacts on climate today, you know, yeah, methane is really important. The other one is energy generation. And there's some overlap between those two. But energy generation in particular, I think, is where you know, most of certainly where most of the actual CO2 going into the atmosphere is coming. Right. And we touched on things like coal and being phased out. And that's that's great. But it's still take a long time. So, yeah, it's still going to take a long time. And there's things that we need to do to speed that up.

Nick:

Still the number one fuel for electricity generation globally, unfortunately.

Josh:

Yep. Yep. And has been increasing in some parts of the world as well, which is, again, counterproductive. So we need to find more and better ways to get. I think a lot of battery storage and electrification is important. But like you said, if you use coal to generate the electricity, it doesn't help. So personally, I'm a big fan of nuclear and driving for investment in nuclear. And I think that makes a lot of sense. In terms of carbon capture technologies, I think the thing that's getting a lot of interest right now is the enhanced rock weathering. I think that's an interesting application. I think it technically works. I'm not quite sold on the logistics part where you're trucking a lot of heavy rocks around the country and crushing up a lot of rocks in an energy-intensive process and getting that to work. I'm hopeful that I'm wrong in my estimates on that. And they're able to find a way to move that stuff around in a way that makes sense and makes the whole thing pencil out in a carbon negative way. Right. But but on methane, I think we are seeing a lot more new technologies coming forward. I think, you know, windfall is one of several. So we're seeing a lot of sort of plasma based technologies, seeing some work on iron salt aerosols being used for improving oxidation of methane in the atmosphere.

Nick:

Some direct atmospheric applications. Yep.

Josh:

And again, I'm a little skeptical on the energy balance for that with the amount of energy it takes to put a bunch of iron into the atmosphere. But from a chemical standpoint, chemistry works and it's the normal way that methane is actually being broken down in the atmosphere anyway. So from a theoretical standpoint, it seems attractive. So yeah, I think, again, it comes back to the idea, I think methane is finally getting put in the spotlight a lot more. And alongside of that, then we're seeing a lot of new technologies that are up and coming that weren't getting any attention previously. So I'm excited about that. And I think I hope that Windfall will be one of many potential solutions because the methane problem is big and the climate problem is big and there's not going to be one silver bullet that solves everything.

Nick:

is a massive story for me in: 2024

Josh:

Yeah, I think going to our website at windfall.bio is going to be the best way. And we have a contact form on the website as well. So anyone who's interested can send us a note and we're happy to get in touch.

Nick:

Excellent. All right. Well, thanks so much, Josh. It's been a pleasure. And I'm confident that I'll be back in touch at some point this year to check in on progress. And then we'll be able to update folks with some some good real data on how it's working out in the world.

Josh:

Yep, absolutely. We'll be excited to share more as we continue.

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