[Music] hi everyone welcome to the octopart podcast control listen uh today I have a very special guest for you it is Mike Hart he is the founder and CEO of both the Sierra energy and Sierra railroad company thank you so much for coming on the show Mike it's great to have you thank you appreciate being invited anytime uh to start I guess do you want to tell people a little bit about both companies uh their journey and your journey with them sure um I've been the CEO of Sierra railroad company for 30 years now um we uh we're a Shortline railroad operator we operate all over California I think we're in eight counties right now where we operate both Freight and passenger operations um we operate tourist railroads like the skunk train up in Fort Brag or the river Fox uh tourist train over in Sacramento uh we are the inventors of electric assist rail bikes uh which we operate on those railroads so it's a lot of fun but our main business is Freight and we handle over 14,000 car loads a year of freight from our different operations we operate the port of West Sacramento uh conquered Naval weapons station Sierra railroad out in the Gold Country uh down in Ventura uh we operate um the Sunburst tourist operation in addition to Freight down there so we do we do a lot of railroading all over California the Sierra energy came about about 20 years ago um I was looking for ways to reduce our carbon footprint as a railroad and um we had on the idea of biodiesel in fact we were the first railroad in America to operate on 100% biodiesel uh we actually name the US EPA named us environmental Heroes for the work we were doing 20 plus years ago but my friends were over where I graduated at UC Davis um kept needling me saying you can do better than Buy biodiesel you know that takes crops so what can you do differently so we hit on the idea of using garbage and so we created the company Sierra energy uh just about 20 years ago now and the idea to take any form of waste trash of any sort and convert it to fuel as we've gone through the stages of doing this over the years turned out you can do it really effectively um the technology that we've developed with Sierra energy is called Fasto and that technology takes any kind of waste people go Oh you mean plastics it's like no the whole black bag you don't even have to peek inside we put it into our system and we inject oxygen and steam and the oxygen reacts with the carbon that's in the waste itself to create a very high temperature we operate at 2200 de C so an extraordinarily high temperature over 4,000 F but but at that temperature all waste breaks down and so you end up with either molten metal so all the metals that were in that waste to recover inorganic slag so that means all the the the glass uh Rock dirt Ash anything like that was in the waste melts and is recovered as a glassy slag that's actually a product can be us as a cent replacement everything else is synthesis gas and that synthesis gas or s gas is carbon monoxide and hydrogen so that process is what uh if you go to your website and you see it called gasification that's what you're talking about that's right okay yeah it's the gasification process that we've developed and you're saying that you're fusing that technology with the trains so you're using that gas that you're creating from the Sierra energy to power the trains for the railroad that's right and so we take that synthesis gas or Sy gas and we can make a variety of things with it um fuel is one um but you can also make fertilizer uh protein there are companies that take sast to protein um but on the list of things that you can make probably the most high demand item we're getting from around the world right now is hydrogen and so for a metric ton a th000 kilograms of trash we can create 100 kg of hydrogen and so hydrogen is extraordinarily valuable right now people are looking for it all over the all over the world um you can just make it out of garbage and so that's our Focus right now is making hydrogen and so what we did um years ago we decided to start converting our locomotives to operate on hydrogen which means we'd have zero emissions from operating trains um I mean railroads are already the lowest emission way of moving anything across the country on a per ton basis trucks can't even come close but what's fascinating is that if you then run on hydrogen you're then moving all of that with zero emissions so it's pretty exciting stuff we now have America's first American built hydrogen locomotive operating over in West Sacramento wow that's very cool I was going to ask you this later in the interview but I think it kind of ties in here um Do You See that in the US the general aversion to rail Transportation uh is holding back the evolution or progression of Technology like this yeah it's funny most people don't understand that railroads have never in history hauled more freight than they are today people always think oh railroads that was something you know back in the 40s or something before the highways and everything like no it's the total amount of material that's moved mve is skyrocketing I mean that's that's just a fact so as a percentage railroads are hauling less of of a total percentage of all the material hauled but in absolute tons it's never been higher than it is today and railroads have never been more efficient than they are today so we're trying to take them to that next step where we're now going to be moving all that material with zero emissions so now in your question about is the the the aversion I think the problem was is that it was subsidized opportunism and that is that if somebody's basically going to let you build your factory um five miles away from the railroad out in the middle of nowhere and where the land is cheap well that's fine because the highways cost nothing and the truckers you know they don't work for much so all of a sudden you've pushed all of that transportation from low emission low carbon Solutions on rail and you've pushed it out onto the highways where we get to share with those truckers every day um as those factories get the benefit of using free publicly subsidized highways and so and the the real the tragedy of the commons is all of that pollution is what we have to live with instead of what used to be more efficient is that you put big shippers on rail so the material can be moved at the lowest possible cost as as well as with the lowest amount of pollution yeah yeah on on rail a lot of the time that leads to the ports obviously so straight from the factory Rail Port ship from there if it's going internationally or somewhere far away in the US there's a lot of motivation right now globally not just in the United States where people are trying to reduce their carbon footprint Industries around the world whether there's government involvement whe government incentives it doesn't make much of a difference everyone is trying to do better and as they're looking at their carbon foot print they're going why is our Factory over here instead of over there I mean why aren't we on rail why aren't we on some you know low emission Network because that's our biggest part of our footprint well they're making those changes and so across the country right now Industries are relocating to rail and railroads are dramatically reducing those emissions as a result fantastic do you think that shift is completely to do with uh I guess efficiency and uh the carbon footprint or do you think some of it's been uh part of the shift since Co to restructure the way the business is done and make it more efficient overall well um I'm sure Co had a role it seems to have a role in everything these days but um I think the reality is that industry is looking for efficiency pollution is inefficient it's inherently inefficient um and so industry looks for ways to try and you know get rid of that and they try to look for what's the lowest cost way of moving things as government starts realizing that wow you know Carbon taxes and trying to to Target you know those High polluting trucks as that starts to happen that is a huge impact I mean right now with two crew members I can move a 100 unit 100 car train um that is the equivalent of 200 to 400 Truckers with two men at an emission of something like 12th or 150th of the total emissions and so the efficiency is is staggering and so it's people are beginning to wake up to the fact that railroads really are the solution and now is we're substituting out right now my railroad has the lowest emission Fleet in America per unit the lowest Miss Mission Fleet in the entire country as we now are shifting to high hen will now be moving towards the first zero emission Fleet in America I think we've got 42 uh tier three locomotives um which since that's what we have as a fleet uh that means we have the lowest emission Fleet and as we're adding the zero emission locomotives coming in it's moving us all the way beyond that wow and I think that kind of puts you ahead of the game uh as far as regulation goes because I know we've been watching Europe pretty closely seeing what's happening with there because they really regulating that emission space uh and there's some expectations obviously that the us is going to follow suit Maybe not immediately but in the next you know sort of few years well the California Air Resource Board is a first mover they're trying very hard right now to U reduce the carbon impact of Transportation um they made an agreement with the trucking industry where they're basically giving them a massive subsidy um to try and shift trucks starting with the dra units that operate at ports uh moving them to Electric hydrogen things like that um they're trying to encourage the trucks to make that shift um since trucks are generally regulated by the state um that is something they have a tremendous amount of u ability to make that change railroads on the other hand are federally governed so the California Resource Board is is taking actions trying to um create their a Nexus where they have more authority over railroads um I don't think they'll be successful with that but I think the the message is clear from what happened with the trucking if they provide sufficient support for the railroads to make that transition to low emissions it's going to happen we're now making it available here in California voluntarily so we're doing it ourselves first and as I said we're operating in eight counties as we our plan right now is we're going to build um a factory um here in California on rail um but as we build that factory um to build hydrogen locomotives that'll be available throughout the state for the 260 plus uh locomotives that are used by Shortline railroads at least initially and then obviously the class ones the big railroads uh Union Pacific and Burlington Northern Santa Fe out here uh we'll certainly make it available to them as well so just jumping back a little bit to the energy production of things uh how big of a role could technology like this come to play in the future for both the gas generation and waste reduction yeah I I think the thing to keep in mind is that the world is creating 2.2 billion tons of trash a year right now um when you think about that on a daily basis that's a line of garbage trucks stretching from San Francisco to New York City Bumper to Bumper every single day that is a staggering amount of waste if you're able to convert that waste using our technology because we can um you'll be able to create enough um hydrogen for example um to replace the energy requirements of diesel for example in the United States um so there is a huge amount of energy embedded in that waste but instead of burning it which is like what an incinerator will do if an incinerator it it puts air in and so you end up with a huge volume of pollution coming out of the stack we inject oxygen and so our The Gas We emit is a product instead of a pollution so that product we're creating actually has high value um and so instead of burning trash which makes a marginally efficient amount of electricity we have a dramatically more efficient solution that could make electricity fuel hydrogen um or just whatever U for example with with fertilizer I mean what are the places we import fertilizer from right now uh the Middle East China Russia um it would be awesome if we could make it ourselves um from our own trash or biomass left over from farming operations right right any of those to make our own fertilizer using our fast stocks techn ology Alum 365 lets you hold the fastest design reviews ever share your designs from anywhere and with anyone with a single click it's easy leave a comment tagging your teammate and they'll instantly receive an email with a link to the design anyone you invite can open the design using a web browser using the browser interface you're able to comment mark up cross probe inspect and more comments are attached directly to the project making them viewable within Alum designer as well as through the browser interface give it a try and get started with Alam 365 today especially I mean like you're not only getting rid of waste in a clean way but your byproduct is something that people are like you said really desperate to get their hands on so it's a win-win all around well you know the funny thing is is that when you throw a ton of trash into a landfill you create two tons of greenhouse gas people go ah doesn't make sense the math doesn't work it it actually does because what you create is methane um and methane is 86 times more impactful as a greenhouse gas than CO2 and so if you really want to have an impact on our carbon footprint as a planet the first place you should be focusing is methane not CO2 is interesting methane is a problem and that's government around the world are beginning to recognize that but if you can stop that waste from going into the landfill in the first place prevent those tons of CO2 equivalent of methane from going into the atmosphere convert it first to clean energy you can then offset a fossil fuel at the same time so it's a double win you're preventing one kind of pollution and replacing another one with a zero emission fuel it's very impressive it's uh seems like a no that that's the path we should go down you know it's it's it's a we're a 20-year-old startup for a reason and that is I have to say that as a as a CEO of SE energy we self-funded um for many of those years um finally in 2019 we we raised our first outside Capital um led by breakthrough energy Ventures um I think Bill Gates's organization Cox Enterprises uh B&P parabot uh France a number of other investors came in in that raise I think we raised about $37 million in that raise um to commercialize the company but I I have to applaud those people for their vision and their help in getting there because what was frustrating for all of those years before people would hear what you just heard you can prevent greenhouse gas from the trash prevent the need for landfills and all the toxic leeching that goes into the the soils and everything else % recycling zero emissions and you replace fossil fuels This sounds too good to be true that phrase right there has caused us more harm as a company than anything else because people hear they hear all this and they go nah that can't be right and so it took the the leadership of these sorts of organizations to actually do the technical due diligence um the US Army became our partner California energy commission but they had to do those deep Dives and going wow this is really true it you can do exactly what you're saying but that took years to get past all of the people being uh concerned that just sounded too good to be true now that we've gotten past that um we have now received I think over 10,000 requests from around the world from different organizations mostly communities uh businesses that are looking to do something better with their waste than what they're doing right now or to create some sort of fuel that they need for their their processes I think we've got ammonia in South Africa renewable natural gas in Eastern Europe to replace Russian natural gas uh sustainable aviation fuel in Singapore um ethanol in the midwest uh hydrogen all over the place but in each of these cases people are making something that they need from waste that's fantastic uh that's just one more way that we can combat you know climate change and actually reduce carbon footprint so I was going to ask you as well I remember reading on your site you had a special project out at uh I think it's Fort Hunter liot that's right yeah a bit about that yeah so in 2019 uh when we raised our um our financing or series a from our our investor group um we were able to commission our first commercial facility there in partnership with the US Army uh at Fort Hunter liot in Monterey County California uh great partners and they wanted to be a z the first zero waste and zero net energy facility between what they have in solar um but the problem for the military is is that you know you can't have you can only fight mil you know Wars when the Sun's shining uh you actually have to have some ability to create power around the clock and so our gas fire creates that opportunity to run 247 uh from just waste so they've been great Partners in developing our facility there which we've been able to operate and demonstrate how the technology Works come up with the improvements we need to go to fullscale commercial for other users and we're now moving on to do that so 400 liot has been a huge step for us um in commercializing the technology wow so uh structure-wise how big is the actual building or facility required to to perform this operation shockingly small um the the the facility is less than an acre um to handle let's say a community of let's say 50,000 people um it would be less than an acre for the facility itself now since we're in California California has very strict rules about not only emissions but also about how you handle Recycling and so it's very important in California that you pull out the recycling that you're able to first um after that's been pulled out the waste that's left over typically is dumped into a landfill um we'll take it after that in other words that we'll take after the recycling has been done and so the perfect location for us is next to a recycling facility um where someone has done that recycling pulled out whatever they can of high value for example aluminum doesn't do us any good um it just goes into the mixed Metals um it's much better if you pull it out first organic waste um you know your your food scraps um we give it to the chickens but um if you um if you throw that in your trash it's just a bunch of water really um Melly water um if the Organics have been pulled out it actually increases our throughput of our system so we love it when they pull out the Organics um if there's high value Plastics sure you can pull them out but we can handle all of the Plastics whatever is in there we can take it all you don't need to sort it out interestingly one of the companies we're talking to right now um they want to do Cradle to cradle plastic and that is that they want to be able to take all of the Plastics our our waste is littered with different kinds of plastic and only a couple really can be recycled the rest of it is just garbage um they people dutifully pull it out of their trash they put it in a container and then the recycling companies take it and put it back in the dump um because people really don't understand most of it really can't be recycled um what we do is we take the whole waist stream with all of those different Plastics turn it into synthesis gas CO2 you can make plastic from so you can make virgin plastic from the Sy gas that's made from that entire waist stream so we don't care which number plastic it is it doesn't it all looks the same to us uh 4,000 degrees it really doesn't matter what it was um it all turns to gas and all the the metal rings and the contaminants in it and the you know the change you left in your in your trash bag accidentally all of it the the metals melt so they're 100% recycled the Organics are basically turned into gas and then that that uh plastic is turned into a synthesis gas that can be recovered uh in California about 20% of all waste is water and so we capture all of that so we don't need water for our system and people always ask this question could I could explain this for an hour and after the show somebody's going to say so what kind of energy do they use to run that thing is it natural gas and it's like no we don't need external energy to operate our system it's driven by the carbon in the waste itself that's an important thing to point out um exactly now it is true that we do use electricity to get it started or we use some sort of a gas or something like that but just basically a thermal boost to get the the system started but once you get it running it runs for pretty much continuously um so that is it's it's a common question people asking well where does the oxygen come from Good Question um 20% of the energy that we create needs to be consumed back into the system to create that oxygen and it's called a parasitic load so we lose about 20% of our of our total energy production to actually drive the process but that's already factored into our outputs Bley you mentioned ideal Place uh for you was next to a recycling center we actually had a guest on the show a little while back that uh had a fully AI automated recycling uh offering which just made me think of that and how useful that would be in California to you with the removal of those specific types of plastics and metals so if you were next to a facility like that it did all the automatic sorting and then right next door brought the finished product over to you I imagine there would be an incredibly efficient process of actually running that system it's funny one of the AI companies that I I I talk to pretty often they they actually have live market pricing going on in their AI about what's the value of aluminum metal what's the value of this plastic that plastic and so when they're their sorters going back and forth very quickly going through the waist stream they're optimizing for highest value on on the recycling um and so at some point a number of products don't make sense to recycle or at least pull it out of the waist stream so they can feed it to us continuously it really it's it's a fantastic opportunity for us to work with a recycler like that um where they are optimizing for either the value to make S gas or the value as an end product because there are number of process like pyrolysis anerobic digestion there are other technologies that do very low temperature but they need to be very specific about one part of the wa stream is all they can handle and so I'm perfectly fine working with them we're just the goalie doesn't let anything get past us let them everything else we sit at the end to make sure it's 100% recycling but yeah we work cooperatively with any kind of recycler anerobic digestion pyrolysis whatever awesome so coming up to the end of the the discussion um I I want to ask you are there any Trends in the renewable energy space that stood out to you recently that people should be sort of keeping an eye on or paying attention to in the energy space yeah um I think one of the things that that a lot of folks are paying attention to right now is hydrogen I mean that is the the opportunity to shift away from conventional fossil fuels to hydrogen the problem is right now the people that are making the most money off of that shift are the oil and gas companies um because to make hydrogen most almost not all of it but an enormous percentage in the high 90s of where it's coming from is from natural gas so you're taking a fossil fuel you're cracking it to make um it's called steam methane reforming but you take that and you make hydrogen and so it is a potentially very polluting process so hydrogen has a bad reputation because of the way um it's made traditionally and so they unfortunately are the big beneficiaries of all of the the the hydrogen activities that are going on right now um I think as people are beginning to go okay hydrogen could work they're starting to shift towards the focus on renewable hydrogen um their vast complexes being developed across the country in the thousands of Acres of solar panels where they'll use solar wind um to take uh water crack it through a process called electrolysis where you can take water and turn it into hydrogen that's a dramatically better solution from a carbon perspective for the planet um what's interesting is that those electrolyzers are very expensive and if you're using solar for example like most of these projects are that means you're only able to run those for relatively short period of time while it's sunny out and your expensive electrolyzer then sits around having nothing better to do for the rest of the evening and such putting our gasifier along with those solar panels has a double benefit one is it keeps electrolyzers working around the clock 24/7 much higher efficiency but the cool thing is is that when you crack water to make hydrogen your waste product is oxygen right you captur the hydrogen which is the feed stock we need to run our process so putting us next to an electrolyzer has a massive reduction in costs and can cut the cost in half of that hydrogen going to Market and make it dramatically more carbon effective because you're now preventing methane from going into the atmosphere by taking that waste and adding that that hydrogen that's coming from the Sun so it's a it's a great combination and so those opportunities are coming up now all over the world so it's a very exciting time for our company fascinating I didn't realize that um and then lastly the last thing I want to ask is uh are there any upcoming projects or anything exciting coming up that people should be keeping an eye on from the company yeah we're actually um we're we have we have been focused as a licensing company just supporting um other people's projects around the world um probably the first six projects of our gasifier which will be in the hundreds of tons of waste per day will all be done um by other large companies using our gas fires part of their process we are now going to shift into development as well so following the successes with those our plan is to start building our own facilities starting in California um a very large project we have in mind right now I can't name the location but it's uh a very large project that we're working on at this point um but the idea is that we're now shifting into becoming a development company and I think we're going to give the public an opportunity to participate with us and we'll be looking for investors in the not too distant future oh exciting uh and then finally uh if people want to follow along with a company uh what's the best place to do that apart from the.com and social media uh yeah we're also on Facebook and sure we're on all the other things I don't do that but uh I'm sure we're on all the platforms you might have heard of um but it's CR energy.com is the thing that I'm old school I barely figured out emails so I'm I'm still working on it but um we we do have it out there and so yeah welcome people uh letting us know they're interested and uh we'll be we'll be in touch with those folks that reach out to us fantastic well thank you so much for coming on the show it's been uh fascinating talking with you James I really appreciate the opportunity thank you it's been a great time talking with you thank you and for anyone watching come back next time we have another guest for you [Music]
2024-10-03