Instigators of Change

Turning pollution into jet fuel (and yoga pants)

May 18, 2022 Khosla Ventures Season 1 Episode 8
Turning pollution into jet fuel (and yoga pants)
Instigators of Change
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Instigators of Change
Turning pollution into jet fuel (and yoga pants)
May 18, 2022 Season 1 Episode 8
Khosla Ventures

Sure, lots of business leaders have big dreams. But when Jennifer Holmgren tells you she wants to turn pollution into both jet fuel and yoga pants, she means it. And she's done it. Her company, LanzaTech, has refined a technology to recycle carbon. And, as she explains, they can pull right up to a super-polluting steel mill and start gobbling up their emissions. Jennifer talks about her long-running quest to keep fossil fuels in the ground, her concerns about the role politics plays, and why - years ago - she said yes to a CEO gig on the eve of retirement.

Show Notes Transcript

Sure, lots of business leaders have big dreams. But when Jennifer Holmgren tells you she wants to turn pollution into both jet fuel and yoga pants, she means it. And she's done it. Her company, LanzaTech, has refined a technology to recycle carbon. And, as she explains, they can pull right up to a super-polluting steel mill and start gobbling up their emissions. Jennifer talks about her long-running quest to keep fossil fuels in the ground, her concerns about the role politics plays, and why - years ago - she said yes to a CEO gig on the eve of retirement.

Kara Miller:

Welcome to Instigators of Change, a Khosla Ventures podcast where we take a look at innovative ideas, the people who come up with them and those who invest in them.

Kara Miller:

I'm Kara Miller, and for the next couple of weeks here, we're going to focus on scientists who got into business largely for one reason, to keep fossil fuels in the ground. But as you'll hear, doing good things for the environment is not quite good enough when you're trying to grow a business, pay investors back and chart a path forward.

Jay Whitacre:

You know, there's a constant question I ask myself when I do technical diligence for venture firms, is how many miracles need to occur between now and when this product is on the floor somewhere, is doing its thing? And the answer is sometimes, there's multiple miracles. It's not even one, there's a couple.

Kara Miller:

That's Jay Whitacre from Carnegie Mellon University who you'll hear from next week, but this week, I talked to Jennifer Holmgren, a leader who doesn't mince words on where we stand.

Jennifer Holmgren:

We need to make it really hard to continue to get new oil out of the ground. We need to really transform our economy, and companies alone can make commitments but they can't do it fast enough.

Kara Miller:

The struggle to get fossil fuels to stay right where they are, that's coming up on Instigators of Change.

Kara Miller:

One of the biggest challenges for CEOs working to stem climate change is to remind people how much, despite all the advances that have been made, we're still pretty wedded to fossil fuels.

Jennifer Holmgren:

You know, 30% of all of that fossil carbon equivalent from mostly petroleum, coal and natural gas ends up in materials that you use in your daily lives, from clothes to shoes to your furniture at home, right?

Kara Miller:

Holmgren, who herself is an author of about 50 patents, runs LanzaTech, which captures and recycles carbon, and her PhD in chemistry came in pretty handy when I asked her what in my house might come from petroleum.

Jennifer Holmgren:

Well, I would say any polyester that you have in your house, any plastic that you have in your house, any foam that you have in your furniture cushions, all of these things are fossil.

Kara Miller:

Which covers a lot of my house. Plastic, polyester, big chunks of the couch, but Holmgren wasn't done.

Jennifer Holmgren:

So if you look at your running shoes, the foam at the bottom of the shoe, the uppers probably are polyester, there's also probably some polyethylene. If you have anything that looks like plastic like a chair, that's polypropylene. If you have acrylics on your windows or your computer screen, I would be surprised if 90% of your home is not fossil derived.

Kara Miller:

Holmgren's company is based on a technology designed to keep more fossil fuels in the ground, but, she says, without people and their governments wanting change, it is hard to see real progress.

Jennifer Holmgren:

And so I'm on a mission to try to show the world that, one, please understand where your stuff comes from, and two, we can make it from waste, we don't have to make it from fresh fossil carbon.

Kara Miller:

Holmgren, who worked on renewable energy inside Honeywell back in the early 2000s, was planning to retire when she found out about a technology so compelling, she just didn't want to walk away.

Jennifer Holmgren:

So what we do is we use waste carbon resources, so we can use industrial waste like emissions at a steel mill, we can use solid waste, like municipal solid waste, and what we do is we have a bacteria that ferments gases. And so you know how you normally make beer by fermenting sugar? We just don't ferment sugar, we ferment a waste gas and we convert that to ethanol, and so because of that, we are not using a fresh fossil carbon resource.

Kara Miller:

LanzaTech wants to ferment all sorts of stuff that we normally ignore. It can pull up to steel mills and use the carbon dioxide that they're pumping into the air to create the raw materials for your tennis shoes, your couch cushions, your plastic plates, even that new dress that you've been eyeing from Zara.

Jennifer Holmgren:

And so we really believe that what we're doing is creating a circular economy. We use waste industrial emissions to make a Zara dress, to make the polyester for a Zara dress, and you can imagine someday taking that dress back to the store, post-consumer waste, and then we can convert that back to a dress, so our goal is to really create these closed loop systems.

Kara Miller:

Turning detrimental emissions into dresses seems far-fetched, but Holmgren says it's only going to get more common.

Jennifer Holmgren:

Zara sold a cocktail dress over the holidays that was made with polyester where the carbon from that polyester came from industrial emissions, a steel mill in China. We can go up to a steel mill and instead of letting that carbon dioxide go out the atmosphere, we capture it and turn it into ethanol, and then we take that ethanol and turn it into stuff. Now, Zara makes the dress so all we do is we deliver the chemicals, the polyester, and they're able to take that and make the dress, just like any other dress except the fiber came from somewhere else.

Kara Miller:

The real trick now is to scale up in a world where global warming is already having enormous consequences.

Jennifer Holmgren:

10 years ago, 12 years ago, we were making fun of solar panels and nobody's ever going to be able to scale it, and now, you can't go anywhere without seeing them. So I think we just need to get to the exponential growth part of these curves and then we'll really have made a difference.

Kara Miller:

And Holmgren warns that we have to scale up faster. So many companies and investors and governments are focused on clean energy that it might seem like we're making huge strides, and we are. But if you look at the numbers, the amount of petroleum we use in the US, it has not fallen since let's say the 1950s when renewables hardly factored into the equation. Actually, the amount of petroleum we use has just about tripled since the '50s. In aviation for example, we fly a lot more than we used to, and very little jet fuel currently comes from renewables, which is why along with making dresses from Zara and yoga pants from Lululemon, Jennifer Holmgren has her sights firmly trained on planes.

Jennifer Holmgren:

So today, the world uses 100 billion gallons of petroleum derived jet fuel per year. And so what you have to have for a plane, it's a heavy machine, you have to have a dense liquid so you have to have a fuel. I know a lot of people are working on batteries for planes, electric planes I mean, and they're also working on hydrogen for planes, but these things are still a long time from now and so in the near term, what we're trying to do is just create drop-in fuel replacements that have the same energy density as petroleum derived jet fuel. And like you said, I've spent a career working on this.

While I was still at UOP Honeywell, we developed a route using used cooking oil, greases, oils, vegetable oils, to make a drop-in jet fuel. And that's all great, and in fact, about the 20 to 30 million gallons today of sustainable aviation fuel that are made today actually come from that route, from this conversion of oils, vegetable oils. But what I had wanted to do is actually make it more from waste derived resources that were more available and had nothing to do with the food chain. At the end of the day, how much used cooking oil are you going to find in the world? Not a 100 billion gallons worth. And so what LanzaTech does is it makes waste derived ethanol and then we develop the process to convert ethanol to sustainable aviation fuel that looks exactly like kerosene and is a drop-in.

And I guess one thing I should also add is we need to think of some of these drop-in replacements as actually being potentially better, not just from a greenhouse gas footprint, but also, these planes fueled with sustainable aviation fuel don't have the same contrail or particular emissions, and the reason for that is because something called aromatics rings that go into conventional petroleum jet fuel, we don't make them, not our route and not the route that other people are using to make sustainable jet fuel. And I need for us to remember that these mean that all that ugly skies, the contrail, all the particular emissions, so it starts to also solve a social justice issue of living near an airport. And so I think it's important for us to try to make things that are even better and solve multiple problems.

Kara Miller:

So how far is LanzaTech in actually making a dent in the huge amount of fossil fuels that we use every year to fly places?

Jennifer Holmgren:

Yeah. So we're building a plant that will be up and running next year that will make 10 million gallons of sustainable aviation fuel. So like I said, there's only 30, this year is about 30 million, so this will add quite a bit of capacity, but it's still a long ways from the 100 billion gallons. So one of the goals that the US Department of Energy has set is they want to produce 3 billion gallons of jet fuel by 2030. The aviation goal is 10 billion globally, and so we're participating in that and making a commitment to make 1 billion by the end of the decade, and I think that's super important. These really ambitious short term targets are really important in getting us to scale, and I don't think it's a problem to go from 10 million next year to a billion by 2030 because we'll be scaling. We won't be building 10 million gallon a year plants after the first 10, we'll be building 300, 500, a billion gallon a year production plants.

Kara Miller:

So this, it feels, around the way you're talking about, like turning the corner on planes being really big emitters of fossil fuels, like that that's possible.

Jennifer Holmgren:

Oh, there's absolutely no question, and to be honest, I think it's a license to operate. I think if we don't solve this jet fuel problem, I think it's going to be hard for all of us who care about the climate to continue to fly. And I want to share a vision with you. I want to make the fuel for the jets, but I also want to make the foam for the seats and the seat belts, et cetera, etcetera, from recycled emissions. We should be able to transform everything on that plane to a low carbon resource.

Kara Miller:

You once got a call I think from DARPA, which is basically the research arm of the military, and it sounds like the military itself is quite interested in pushing this kind of technology forward.

Jennifer Holmgren:

Oh, that's a great question. In fact, the first time, the reason I did all that work on aviation actually in 2006, 2007, is because we were making diesel, not jet fuel, and the head of the program at DARPA called me up and said, "We need to develop sustainable aviation fuels. I need to be able to fly on sustainable aviation fuels. And if you can make diesel, then that means you can make jet fuel, right?" I said yes, and so he said he was going to put some funding for multiple programs, not just ours, to try to develop alternative routes to aviation fuel from sustainable resources, and that was in 2006. By 2010, we worked with the Navy. On Earth Day 2010, we flew the Green Hornet which was an F18. It went supersonic using sustainable aviation fuel, and DARPA did give me that call, but more importantly, everybody said, "You're never going to be able to do this. You're never going to fly in sustainable aviation fuel." And guess what? By 2010, we were doing it in a supersonic F18.

Kara Miller:

Wow. I think this is a good place to fit in a break. When we come back, we're going to look at the barriers, not just for individual companies, but for societies as a whole in transitioning to an energy system that keeps more fossil fuels in the ground. I'm talking with Jennifer Holmgren, she's the CEO of LanzaTech. We'll be back after a quick message from KV.

Speaker: 

The job market is filled with endless possibilities today. If you are ready for your next adventure, consider joining a company in the Khosla Ventures portfolio. KV companies aim to fundamentally change health, finance, the future of work, transportation, energy, even space. Check out khoslaventures.com/jobs. That's khoslaventures.com/jobs. And now, back to Instigators of Change.

Kara Miller:

I'm Kara Miller, talking with Jennifer Holmgren. She runs LanzaTech, and I wonder, when you think about the whole system, and obviously, big change requires governments, it requires consumers, companies, funders, so there's all these different moving pieces, what feels to you like the biggest obstacle to really changing this system to get it to be more green?

Jennifer Holmgren:

Political will.

Kara Miller:

Yeah, okay.

Jennifer Holmgren:

I don't think there's political will. This is needing to be transformational and we need to completely change our carbon economy, that's the only way we'll be successful. And we could do that in 100 years or we can do that in 20. We need to do it in 20. And you're not going to do a system change in 20 years without the political will to do the transformation that we need. We need to make it really hard to continue to get new oil out of the ground. We need to really transform our economy, and companies alone can make commitments but they can't do it fast enough.

Kara Miller:

Okay. Does that mean to you something really clear cut? I've talked to a lot of economists who've said, "We should have a carbon tax," to just make it very clear and trackable and that kind of thing. Is that the kind of thing you're talking about?

Jennifer Holmgren:

Yeah. I think we need two things. One is a carbon tax or some way to equalize the cost of the new technologies which will always be more expensive initially, and then the other thing we need to do is help companies scale technologies. Crossing the value of death as it's called, which means going from a pilot to a demo to a commercial, increasingly costs more and more money, and it's hard to finance all of that scale-up using private dollars because there's no return and there's always a risk premium until you get to commercial scale, and so governments really need to help with that. And by the way, we're seeing a lot of that. We're seeing that happening in the US and Europe where governments are stepping up and realizing they need to help fund that scale-up.

Kara Miller:

Do you worry that we don't have the political will or that politics, or administrations change often enough that even if somebody has the political will, they're just not in power long enough to really do that much?

Jennifer Holmgren:

Yeah. I don't know what the reason is of why we don't have the political will. Some of it is rotating quickly. The other is they all want to get reelected and we don't have enough voters or consumers that are saying, "This is my priority. This is really important." I do worry a lot. I'll tell you, for what it's worth, when I did my PhD thesis, it was right after the first oil embargo. I remember we used to stand in line waiting to get our gas because there was an oil embargo.

Kara Miller:

Is this the '70s?

Jennifer Holmgren:

Exactly, it was the late '70s, yeah. And so when I went to get my PhD in 1981, everybody was working on alternatives to petroleum, that was the thing, and everybody said, "We've got to get off petroleum." That was in '81. How many other oil crises have we had since then? And every time the crisis disappears or we think it does, we stop. We can't. We just have to keep pushing on this and we cannot... It has to be relentless and it has to happen now and quickly. Otherwise, well, I think it doesn't take a rocket scientist to see the impacts of climate right now.

Kara Miller:

Right. I know that LanzaTech does stuff all across the world. Is your sense that the US is out in front on this issue? That we're lagging on this issue? Obviously, Europe has policies, China has policies, everybody's got their own set of things that they're doing.

Jennifer Holmgren:

Yeah, and I would say that nobody's leading, okay?

Kara Miller:

Okay.

Jennifer Holmgren:

The US has 45Q, which is a carbon credit, and that's been around for quite a while, and before this administration. It was during a Republican administration that got augmented, so we have things like that, we have the Department of Energy, but we don't have the massive scale I don't think across all of the sectors that is required. Europe also has a lot of support for green initiatives and many people think they're ahead. China has a lot of support. India's doing a massive amount of work in creating low carbon alternatives. But I would say nobody is clearly leading, clearly pushing to keep fossils in the ground, clearly pushing to make sure that carbon is a number one priority.

Kara Miller:

Let me back up and ask you a different kind of question. We talked at the beginning about how you were about to retire and then this opportunity came along and that went out the window. I think a lot of people have an image of the quintessential tech entrepreneur as being 25. Tell me about whether you have often encountered people who have that view, what we get wrong about that? I just wonder if that's something that you've encountered in your own life.

Jennifer Holmgren:

Well, yeah, I do encounter it. First of all, I'm a girl so already I'm in-

Kara Miller:

And that too, yeah. A 25 year old man, I should say.

Jennifer Holmgren:

Exactly. Exactly. So you know what? I do encounter it, I've always encountered it. And actually, one of the things I always get told is, "Well, you worked for 20 years at a big company. People who work at big companies are not entrepreneurial. They don't take risks, they don't work at startups." And clearly, that's not true. I think there's a lot of prejudices we need to get past, and I would argue that I'm working on a massive social change so being a woman I think predisposes me for that.

The other thing is the only thing that I've learned in my life or I think I've learned in my life getting older, is don't sweat the little details and don't let anything stop you. And I think when I was 25, I would've sweated every little detail. Building a company that does something so different, that really fundamentally changes everything, you cannot do that if you let little things stop you, if you let people that are telling you that's a dumb idea stop you know. It's a distraction. The older you get, or at least I think, the less distracted I am by the noise and the more determined I am to create change. So prejudices aside, I frankly don't care. I'm going to do this no matter how old I am.

Kara Miller:

Yeah. When you meet other founders of companies, and I especially say this because this is not a company that started yesterday, you've been at it for a long time and you came in and it was already a technology that existed, what would you say to people who are starting companies in the early years in terms of sticking it out?

Jennifer Holmgren:

Yeah. I always like to say if it doesn't violate a law of thermodynamics, then it's probably going to work and you just need to keep trying until you get it right, but I think the most important thing is really, it's a decision making process. A lot of people try to get things 90% right before they make a decision, and to me, what you really have to do to scale something is to make sure that you can make quick decisions, and then you're constantly observing whether maybe you've made the wrong decision. And so then what you've got to do is pivot immediately and course correct, so you need to make fast decisions so that you can move forward quickly and so you can course correct quickly if you need it. And if that's the case, you will scale the technology. I'm sure of that.

Kara Miller:

Jennifer Holmgren is the CEO of LanzaTech. Jennifer, thank you so much.

Jennifer Holmgren:

Good to meet you. Thank you for having me.

Kara Miller:

Next week, as I mentioned at the beginning of the show, we're going to continue our exploration of clean energy with Jay Whitacre at Carnegie Mellon University, who may challenge your assumptions about whether a fully electric vehicle is always the cleanest car you can drive.

Jay Whitacre:

Yeah, I badly want an electric vehicle but I can't ethically bring myself to purchase one because I believe that I should be buying a vehicle that represents the lowest total emissions for where I live.

Kara Miller:

That's next week on Instigators of Change. Remember, you can pick up our podcast on Apple Podcasts, on Spotify, on Google. The show is produced by Matt Purdy. I'm Kara Miller. Talk to you next week.