The modern world heavily relies on a complex network for extracting, processing, transporting, and utilizing hydrocarbons such as crude oil and natural gas. However, these resources come with significant drawbacks: they are finite, challenging to extract, and contribute to carbon dioxide emissions.
Rather than aiming to decrease humanity’s reliance on hydrocarbons—an endeavor considered impossible or undesirable by some—Terraform Industries proposes a different approach. They seek to produce synthetic natural gas using electricity and air through a system called the Terraformer. Today, the startup announces the successful commissioning of a demonstrator Terraformer and the inaugural production of synthetic natural gas.
About the size of two shipping containers, the Terraformer comprises three main subsystems: an electrolyzer, which converts solar power into hydrogen; a direct air capture system for capturing CO2; and a chemical reactor that combines these inputs to generate pipeline-grade synthetic natural gas. The entire system is optimized to operate with a one-megawatt solar array.
While CEO Casey Handmer acknowledges that the company’s approach isn’t entirely novel—processes like electrolysis and Sabatier chemical reactors are well-established—the company has innovated on these methods. This includes developing its proprietary direct air capture system and adapting the entire process to function efficiently with a variable energy source like solar power. Thus, while individual subsystems may have origins dating back to the nineteenth or twentieth century, the overall process represents a novel and innovative approach.
The outcome is remarkable cost reductions: Terraform claims that its system can produce hydrogen from clean electricity for less than $2.50 per kilogram of H2. Currently, green hydrogen typically costs between $5 and $11 per kilogram, according to estimates by Handmer. Additionally, the direct air capture system filters CO2 for less than $250 per ton, setting a new world record, as stated by the company.
Terraform anticipates further improvements to reduce these costs even more, aiming to achieve cost parity with conventionally sourced liquefied natural gas for its synthetic natural gas. This goal largely hinges on the widespread deployment of inexpensive solar power and the production of thousands of Terraformers annually.
Certainly, while Handmer is remarkably ambitious, it’s important to note that he is grounded in reality. He understands that Terraform’s success hinges on having a solid business rationale behind the company’s plans.
There’s this concept we’ve been working toward, which is that many of these innovative technologies aimed at addressing climate change are not inherently profitable under capitalism because they often require more investment than they generate returns. This makes scaling them up extremely challenging. However, if we can find a way to generate more revenue than we spend, then we align with the principles of capitalism. It’s a system where money naturally gravitates. That’s the crucial goal.”
Terraform, headquartered in Burbank, California, has secured agreements to sell the small quantities of natural gas it produces to two undisclosed utilities. While the initial volume is modest, “it’s a significant milestone,” Handmer noted. “It demonstrates that we have produced gas that meets their requirements.”
The company is also engaged in discussions about developing or selling standalone electrolyzers as standalone products, as well as exploring the production of liquid fuels other than methane. Terraform is currently accepting reservations for the first batch of production Terraformers, with the ultimate objective of scaling up manufacturing facilities to support a rollout that could potentially revolutionize the world’s energy systems.
