The SAF Podcast
Welcome to The SAF Podcast, the only podcast on the internet that exclusively covers sustainable aviation fuel (SAF). So if you want to find out the real issues and challenges are for commercialising and scaling SAF production, look no further.
Every week we will be hearing from senior industry leaders who are actively shaping the future of SAF and aviation.
Hosted by Oscar Henderson and brought to you by the team at SAF Investor. Connect with us at www.safinvestor.com
The SAF Podcast
Dan Sutton, Syntholene: Building on a volcano and betting on geothermal
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In this episode, we sit down with Dan Sutton, CEO and co-founder of Syntholene, to explore their geothermally integrated synthetic fuel production technology currently being developed in Iceland.
Dan explains why geothermal energy is such a compelling foundation for eSAF production, how Syntholene's solid oxide electrolyzer cell (SOEC) technology — integrated with Iceland's abundant heat and electricity — creates a step-change in hydrogen cost reduction, and why the company believes it can achieve unit economics competitive with fossil fuels without relying on perpetual subsidies.
We also explore the independent feasibility study conducted by notable alternative fuels sceptic Robert Rapier, whose findings validated Syntholene's scientific fundamentals while identifying the integration and construction risks that Dan openly acknowledges — and explains how his team is managing them.
The conversation broadens into project development philosophy, the replicability of the Iceland model in geothermally active regions globally and how you manage earthquake and volcano risk, Iceland's strikingly low-bureaucracy environment for infrastructure permitting, and a frank debate on whether European eSAF policy is addressing the real problem — or papering over a fundamental unit economics challenge.
We close with Syntholene's unconventional but deliberate choice to go public on the TSX Venture Exchange — and why Dan believes building in public, with a diversified investor base, gives the company more control over its destiny than the traditional venture capital route.
Welcome And Why Iceland Matters
SPEAKER_00Hello and welcome to another episode of the SAF podcast, and I'm really excited this week to be joined by Dan Sutton from Cynthia. I like to find a first because every episode is unique, and I think this is going to be our first episode where we talk about Iceland as a country because Dan and Cynthia are developing a SAF project up in Iceland using geothermal energy, which I think will be another first. So you get two firsts now, Dan, so that you've started very strong. And we're going to be exploring all the work they're doing up there, as well as some wider industry context. People listening will be familiar with the drill by now. Dan, thanks so much for joining us. It's great to have you.
SPEAKER_01Thanks so much, Oscar. Such a pleasure. I am a longtime fan. I've read a lot of SAF Investors' work. And uh yeah, truly an honor to be on your podcast today.
SPEAKER_00Well, it we're delighted to have you. So glad you found some time to fit us into your busy schedule. So before we get into Syntheline,
Dan Sutton’s Path To Syntheline
SPEAKER_00tell us a bit about Dan Sussen, your background before you founded Syntheline and what you're doing now.
SPEAKER_01Totally. So I am a guy who loves weird, complicated, out-of-the-box entrepreneurial opportunities. I graduated with an economics degree and started working in nuclear power. One of my colleagues who actually has joined me on the Syntheline journey was working on a small modular reactor company that focused on high-temperature nuclear power operations as well as the ability to use low-enriched uranium. And that went on to some huge success. His name's Canon Bryan. He's actually a guy who's founded three separate billion-dollar companies. And that company that I work for eventually turned into another company called Terrestrial Energy. They went public on the NASDAQ last year at a multi-billion dollar valuation. So it was a really great first taste of how to take complex technology and engineering projects, get them resourced, and deploy them at increasing scale to the betterment of our energy grids and nuclear energy is also a super low emissions way to produce energy. So I think ties into the clean energy mission that Syntheline is on today. I went off for a few different jaunts into high field magnetics and did some other work. And then I founded an advanced agriculture company in 2013, built that to 150 employees and 20 million a year in revenue from myself in a coffee shop. So I was really blessed that at 24 years old I got to be the CEO of a growth company and learned a lot about supply chain management, recruitment, complex construction, deployment, all of that kind of stuff. Wound that down in 2023. And as I mentioned, my colleagues that I'd worked with in the nuclear world who had gone on to some great success actually took me out for dinner and said, Hey, have you heard of this stuff called synthetic fuel? I was like, I think I know about biofuels and I definitely know about petroleum-based fuels. What is synthetic fuel? And at its element, instead of using crude feedstocks like oil or bio-based feedstocks, synthetic fuel actually designs the molecules from the ground up using the substantially abundant resources of water, carbon, and energy. Now you need a lot of energy, and you need that energy to be cheap. And so they'd initially imagine this coupling really well to nuclear power, which it does and it will in the future, but a little tricky to go out and find a spare nuclear reactor kicking around with a bunch of extra heat and energy available. And I think we are seeing the beginnings of a nuclear renaissance. We understand that the risk profiles have been substantially overstated. And if we want a stable, versatile baseload energy grid, especially for industrial operations like chemical synthesis and fuel synthesis, we need nuclear as part of that mix. But then as I joined the company, started building with them, my mission was really to take it from a fantastic engineering project, some super strong early validation on the back of some instrumental work at Idaho National Lab showing these thermal integration
Why Geothermal Fits Synthetic Fuels
SPEAKER_01pathways and their efficiencies. We found Icelandic geothermal. And geothermal and nuclear are very similar. Such a weird thing to wrap your head around, but the earth is a massive nuclear reactor. Untold you can't tell people that.
SPEAKER_00You can't put that out in a public sphere that we're just living on a massive nuclear reactor.
SPEAKER_01Absolutely are. The core of the earth is thousands of degrees Celsius. There's probably fissions and fusions going on under our feet. It's pretty deep under our feet, fair enough. And it's been going pretty good for about four and a half billion years. So I don't want to alarm anyone. And there's also a lot of radioactive decay. That's the core difference, is that that's really the driver of the heat. But you don't need to look much further than a volcano to appreciate that this is exceptionally energetic. It's exceptionally hot. It's hot enough to melt rock in certain places. And there are lots of places in the world, or at least a handful of places, where you get this confluence of shallow access to the heat and high temperature access to the heat. And when you do that, the same coupling of nuclear reactors to synthetic fuel production can work really, really well. And so we started to build our relationships in Heistland. We started to explore the resources there. And what we discovered is not just an unfathomable abundance of geothermal potential, many, many hundreds of potential gigawatts in and around that island, quite literally a volcano sitting in the middle of the mid-Atlantic ridge, but also an incredibly industrious people. Icelanders are very special. They've got 400,000 people, they've got 12 ports, they've got three airports, they've got incredible energy generation infrastructure. They operate their entire society essentially on geothermal power and a lot of hydroelectric power, which are two of my favorite base load, consistently available clean energy sources. And as we've unpacked the deployment of this demonstration facility that we're working on now, I know we're going to talk more about that. We've found Icelanders to be low bureaucracy, no fuss, no muss, and a really great place to be doing business, especially to serve the broader European ESAF market, which as we all know is drastically undersupplied and is waiting patiently with baited breath for a cost-effective substitute that Cynthia is excited to be able to deliver.
SPEAKER_00I think actually the reason you went to Weisson is so you can have team meetings in geezers.
SPEAKER_01We sit in the hot pools, exactly, and guys are drinking gears.
SPEAKER_00That's where all the really productive, creative meetings happen, I can imagine. That's where I'd have them anyway.
SPEAKER_01100%. And then we're sitting in the pool, and the pool's heated by geothermal, and we're saying we're going to use this same energy to run our whole system.
SPEAKER_02Exactly.
SPEAKER_01Uh, but it is a fantastic place to do business, very beautiful place. Highly encourage your audience to go just as tourists. And if you have a chance to pop up to Husavik, which is in the northern part of Iceland, really beautiful place. You can go and see our infrastructure, which is now deployed and about to have the lights flicked on. And uh, you can see the world's first geothermally integrated high-temperature synthetic fuel production process in operation. It's gonna be a really exciting time.
SPEAKER_00You're based in the US. So how often do you are you heading over to Iceland in a year?
SPEAKER_01As often as I can. I was there twice last year. I have a feeling I'm gonna be there many more times this year. We do have an incredible Icelandic operational team, though, including project manager, you know, the chairman of our team there. We've got some strong inroads into uh the political landscape, you know, political stakeholders. And so I don't need to be sitting in a lawn chair sipping lemonade, watching a construction project go. I've got great faith in our operators. Um, but uh I do love to get up there as often as I can.
SPEAKER_00You you could be sitting in a geezer, though, which changes everything as opposed to a lawn chair.
SPEAKER_01You know, there is occasionally work to do that's not related to watching the construction project get built. Um, but no, you're absolutely right. There couldn't be a more picturesque region for us to do this, which is a nice uh added bonus.
SPEAKER_00So you've you've really effectively laid out, you know, where you're getting your energy from, as well as you know, the reason the overarching reasons why Iceland
The Tech Stack Without Breakthroughs
SPEAKER_00makes a good place to develop a project. Can you dig a bit deeper into the technology side? Where you're getting your technology from, which bits are you developing yourselves, how that technology stack for the pro for the facilities constructed?
SPEAKER_01Well, the great news is that the technology all exists today. It will continue to iterate, it will continue to evolve, but we are not reliant on any kind of technological breakthrough or bending our understanding of the rules of physics. And I will say it's not just a technology story. We hear a lot of discussion about the reasons why we haven't seen ESAF uh be deployed in a scalable way, while the unit economics are still mostly many multiples higher than fossil-based kerosene or even biofuels. And I think that the technology is really important, but it's also about citing that technology adjacent to low-cost base load energy resources beyond just wind and solar. Wind and solar are great, wind and solar plus batteries are great, but they haven't demonstrated the capability to produce e-fuel in a cost-competitive way, in quite the same way that baseload thermal integration has been shown already to be able to deploy. So the cornerstone of our step change advancement in the unit economics comes back to a piece of technology called the solid oxide electrolyzer cell. This sort of had its technological origins in the early 2000s. It was working at lab scale, it was very fragile coming into the 2010s. Then it started to be increasingly commercialized. It's very similar to a solid oxide fuel cell system, sort of the same idea run backwards. So we saw lots of really cool companies investing huge amounts in RD to make it more durable, more industrially capable. Companies like Bloom, Topso, Tysoncrip, you know, industrial giants in the US and Europe. And slowly but surely it started to pick up its pace in terms of industrial bankability. Now, for us, the cornerstone of our ambition was anchored at some work that was done at the Idaho National Lab. One of my colleagues, our chief engineer John Kutch, worked closely with the SOEC lab there to show that the SOEC is not just radically more efficient than low-temperature electrolysis processes, even just using electricity alone. It's probably about 40% more efficient than your traditional proton electron membrane or alkaline electrolysis systems, which fairly enough are almost 100 years old. These systems have had a lot of efficiency gains early in their process, and now they're sort of single-digit percentage points incrementally getting better. But the SOEC has another feature, and that is that it doesn't just need electricity. It doesn't just accept electricity as an energy input, it can actually accept industrial heat. This is a high temperature electrolysis process, and so it operates at like 650, 700 degrees Celsius, depending on which unit you're operating. And so by using thermal integration, which is what Syntheline has built RIP portfolio around and why we're integrating to co-located heat and electricity in the form of geothermal, we can actually further reduce the amount of electricity that's needed upwards of 25 to 30 percent. So these are compounding efficiency gains over your standard electrolysis process, but you have to have cheap electricity and you have to have cheap or essentially free heat, waste heat from some other process. We've seen this SOEC integrated to things like waste heat historically. There are a couple implementations, it's still sort of in its like megawatts to tens of megawatts type of scale, but that is really the key unlock that allows us to use heat and electricity efficiently, low cost, used efficiently equals low-cost hydrogen. Hydrogen is probably about 70% of the cost profile of e-fuels. And so if you can solve for low-cost hydrogen, then you can solve for low-cost e-fuels. Now, this demonstration at the Idaho National Lab was completed. They published their results in 2022. You can all go look at these results today, and they effectively chart the path to industrial scale-up achieving sub-1 per kilogram hydrogen costs. This is nothing less than a civilizational level breakthrough. If we can make hydrogen even below two bucks a kilogram green hydrogen, then we can start to effectively substitute for other steam methane-reforming gray hydrogen, which is a $300 billion industry today, uh, inherent in chemical synthesis and fuel synthesis. And so they show that this can work. Now it's incumbent on Syntheline and companies like us to take that lab scale work, show that it can operate in the field, show that we can show get the right energy integrations to steam and electricity. And that's what we're in the business of doing and really pleased to have our demonstration facility that we've been working on for the better part of a year now almost ready for operations. Yeah. And that really simple pathway of let's do it
How The Demo Plant Runs Early
SPEAKER_01in the lab, let's do it in a prototype. Now let's do it at a demo in a real world environment, tested in the field. And we're very ambitious to receive those results from an effects testing campaign as early as the next few months.
SPEAKER_00Yeah. The the interesting thing about your demo plan, most facilities, when they're looking at any form of scale up, struggle to run on time. Running on schedule is a big challenge that lots of SAF producers are facing, but you're actually running ahead of schedule. You're bucking the trend. You're six months ahead of schedule with your with your demo plant. So explain to everyone how you've managed to done that and to do that, and also what that means going forward. What's the significance for Synthele not being six months in advance?
SPEAKER_01You know, I've spent my entire career, at least adjacent to clean energy. And I think like so many clean energy fans and investors, we want to see things that are truly sustainable. Not just environmentally sustainable, but economically sustainable, cost competitive with incumbent uh emissions-intensive energy sources like fossil fuels. But time and again we see these mega projects, super ambitious projects run overtime, over budget, they don't deliver the economics that were promised, they don't perform at their nameplate. And it is essential for any energy project developer to buck that trend. We cannot be the butt of the oil and gas industry's jokes because we're way too expensive and we don't know how to manage projects. And this really comes back to Cynthia's orientation as less of a technologist and more of a project developer. Now, look, we do have technology that we've developed. We have internal IP around systems that allow us to integrate efficiently to geothermal resources, integration of our entire supply chain to really maximize the efficiencies of using heat at some exothermic processes, reintroducing that heat. My engineers are really, really smart and they're really good at inventing only in the gaps where we need new technology to be able to see these incumbent systems, these existing systems work. But for the most part, we want to buy the best solid oxide electrolyzer cells in the world from the best vendors in the world that they themselves have done billions of dollars of RD in most cases. We want to buy amazing fuel synthesis reactors from companies that specialize in that. And in that way, we're more systems integrators than we are technologists. Now, my team has also had a long history of deploying infrastructure. Collectively, we've deployed hundreds of millions of dollars worth of gear for large chemical companies, large energy companies, industrials. My project manager in Iceland has overseen the deployment of over 900 megawatts worth of geothermal infrastructure, including three of the five largest geothermal plants in the world. And this is his entire career is predicated on his ability to deliver things on time and on budget. So, how did we do it? We planned really thoroughly. In the planning process, that's the lowest cost process that you're ever going to run for a project. Take your time. We spent about a year to get our feet under us to really understand what we needed to do to then deploy a lightning strike of a construction project. I think we built our thermal coupling device, which is our core piece of IP, in 42 days. From getting permits to turning the lights on in the facility, we're projecting 72 days. We are under budget. We have not eaten into contingencies. And all of this comes back, I think, to two core components: really thorough planning and modular deployment. Anytime you consider a mega project, if you can build a small increment such as a prototype first and then twin that increment instead of doing a new first-of-a-kind project, you're going to be at a huge advantage to someone who's building something new for the first time. In the context of ESAF, it could be for the first time ever, you know, the first time in the world, a lot of these 20,000, 50,000, 100,000 ton facilities have been conceived. So I think it's really important. I think it sets the tone for the kind of project developers that we want to be. And we're starting to establish our reputation. Synthelean's still very early. We're still relatively small. Demo facility is fantastic. We've got a long way to go to be able to get to the first commercial instance, the ever-elusive FID that's been very hard to get for the sector. And then beyond that, to be able to say, okay, we can do 20,000, 40,000, 50,000 tons. How do we get to hundreds of thousands of tons? And that reputation takes 10 years to build and 10 minutes to destroy. And so it really comes back to project discipline and finding people that have done it before. We're going to continue to recruit high-quality talent that have deployed oil refineries, that have deployed advanced energy infrastructure, and complement the existing profile of that on our team.
SPEAKER_00You seem to be very much along the cruel walk, run, fly sort of methodology of taking your time in the early stages, setting the foundations, being very deliberate in how you're planning, which allows you to then scale quicker rather than trying to rush through early stages and therefore potentially run into problems later on. So you'd rather spend the time and the money instilling really strong fundamentals that will pay dividends further down the line, even if you could potentially develop one smaller project quicker. You'd rather do a slightly bigger project slower and better and more efficient.
SPEAKER_01Well, we're going to need a lot of ESAF. At the end of the day, a new 20,000, 40,000 ton project is just scratching the tip of the iceberg on the many billions of liters of undersupply that we're currently seeing on our 2030 trajectory. So really important that a few of these firms get it right and get it right at the right price and get it right in a way that they can envision how to get to cost competitiveness with fossil fuel at some economy of scale. If we're going to rely on perpetual subsidy forever, I think the unit economics really have been the stopping point. And I wish that I could take credit for the crawl, walk, run philosophy of Syntheline, but actually this was what we were directed towards. When I first joined the company and it was kind of this mature and exciting engineering story that needed to then transition into a real operating company and increase in commercialization, we took the time to go and canvass many large oil and gas companies, many large industrial investors. We're lucky to have some existing relationships with the kinds of funds and companies and banks that do invest in this kind of infrastructure or would, given the right set of favorable conditions. And they told us quite simply first and foremost, very difficult to invest in any kind of fuel infrastructure that is many multiples more expensive. Than fossil fuels and is reliant on long-term mandates and reliant on long-term subsidy to generate an economic return. I think at the root of all the complexity that we understand from why we're not seeing more FIDs is a struggle with unit economics. But also they indicated we're not going to bank you guys based on some lab work. You know, good for you, but that's a controlled environment. So you have to show us that this can work in the field, that it can work attached to a real energy asset, and that that energy asset can actually give you the economics of energy that you need to be able to make the economics of fuel that you need. And so, I mean, I've seen a handful of ESAF projects that say we're going to build this super efficient system and we're also going to build a massive offshore wind farm. And I think even with co-location, even with direct integration behind the meter, you're trying to stack two miracles on top of each other. And that's super challenging. So let's go where the energy already exists. We know that it's there. We know that it meets the right kind of criteria to deliver the efficiencies that we need. And when we have this demo facility up and running, that's going to be the time when we can now take those results, validate them with qualified third parties, and share them among those industrial investors. And
Managing Integration Risk And Skeptics
SPEAKER_01Syntheline believes we'll have nothing short of a step change advancement in the unit economic ambition, hopefully opening the floodgates, not just for us, but for other thermally integrated ESAF producers as well.
SPEAKER_00Yeah. You're very confident in the strategy and the unit economics of what Syntheline's offering. And you had a feasible third-party feasibility study conducted by someone who I think might have the best name, one of the best names I've ever heard in Robert Rapier, which is an unbelievable name. I can't wait for him to cross paths with Clive Cutlass at some point.
SPEAKER_01Come on, man. That's amazing.
SPEAKER_00But he very much in his report said that you've got very strong fundamentals in terms of the strategy and where you are looking at costs. And one of the the one of the things he said which sort of stuck out to me was there are there aren't necessarily issues with regard to the scientific unknowns, because as you mentioned, a lot of the technology already exists. You're merely integrating existing technology. So there's less scientific unknown risk. There's challenges related to that integration. And as you are you are currently undergoing that integration, where are problems? Where do you are you expecting? Have you experienced issues? How have you actually practically found that integration problem that Robert sort of highlighted as being the area where there could be more exposure to risk as opposed to the scientific unknowns?
SPEAKER_01Absolutely. And my confidence is pretty hard-earned, if I say so myself. I came into this company skeptical, as anybody would. Any of your listeners that are hearing this for the first time are going to say synthetic fuels without crude oil, cost competitive with fossil fuels. Oh, no, no, no.
SPEAKER_02Just sounds too good to be true.
SPEAKER_01From a volcano, uh just sounds too good to be true, right? And uh, you know, how can we, we've had such abundance of fossil-based hydrocarbon fuels for so long that it's hard to imagine how we would operate without them. They deliver every technology and amenity and quality of life, every good service, food, you know, that you own, that you buy is brought to you by diesel fuel and marine shipping fuel. And it we've just been so entrenched in this idea that that's what we need to be able to deliver cheap energy. And it does, it does deliver exceptionally cheap energy and has done for the last 150 years. The correlation of the advancement of human civilization associated with our abundant use of fossil fuels is no coincidence. And so my skepticism was slowly but surely mitigated over the course of many different red teaming exercises. That's one thing that I love about my engineering team is they actively sought out skeptics. They actively looked into who are the people that understand SOECs, who are the people that understand synthetic fuel supply chains, who are the people who have, you know, thrown dirt on the ESAF world historically because of its poor unit economics. Let's invite them in, let's ask them to find the problems in our diligence folder. And let's go open, open our story to them and have them pick apart our engineering. We've probably done this like four or five times. In the case of Robert Rapier, we commissioned him to do a report on the subject precisely because he is the most notable alternative fuel skeptic we could find. He actually has, you know, his 30-year history, worked for Conico Phillips, has done a ton of work in refining and alternative fuels, and he was commissioned by a fund to do practical and physical due diligence. This fund wanted to buy a biofuel facility. And he went to 14 different biofuel facilities around the world, diligenced all of them, and passed on every single one. He said the volatility of the feedstocks is too critical, that the chemistry is not there to be able to deliver unsubsidized cost competition. And so when we brought him in, I was pretty intimidated, and so were my engineers. And he was rightfully skeptical. And he looked at it, dove deeper, worked with my engineering team, gave them tough questions, they answered those questions, and slowly but surely I got to witness in him what I what I witnessed in myself, which is coming around to this realization that, hey, this technology really does exist. And this technology is now ready for increasing industrial scale-up. It has the robustness, it has the durability. And so remind me of your original question. I wanted to speak on Robert there for a second, but where were we going with that? You had a specific question at the end.
SPEAKER_00Yeah, I think the drive behind it was how are you approaching the aspect of generation risk that he highlighted as opposed to the scientific risk and how you're working at, you know, managing that because lots of people are integrating lots of different technologies across the globe and they're all unique in their own different ways. So hearing about how you are proactively and practically looking at controlling and managing that, I think is is an interesting thing to touch on.
SPEAKER_01So that was, I think, critical to Robert Rapier's tone and tenor, is that he did not say this is risk-free. And he did not say all the risks have been controlled. I think the validation that the technology risk is low, the scientific risk is low. These are important cornerstones to say, okay, now we can imagine going and deploying this infrastructure at increasing scale. He validated that step change of saying lab to demo to small commercial to larger commercial. And I think that that's the validation of our philosophy as well. But he rightly identified the same kind of risk profile as you would see in any complex construction project, integration to energy resources, you know, the combination of our tech into a geothermal resource has never been done. And so there are engineering risks that are inherent in that. There are construction risks, timeline risk, cost overrun risk, financial risk, partnership risk, all the same kind of risk you're going to get if you want to build a small oil refinery. Now, I think the lucky thing is that these risks are attractable. They're non-trivial, they're very real. I wake up thinking about them, I go to sleep thinking about them. And it's not one massive risk, it's more like a thousand small risks. And so, can we demonstrate the operational discipline to build the stuff on time, do it with the right people, do it with the right partners, bring in the right strategic partners on a project basis or a corporate level basis? And so, how do we mitigate those risks? Just solving a thousand challenges over the course of the year and chipping away one at a time. We see this all the time. We get to put out a great piece of news that we're six months ahead of schedule, but the amount of headaches and sleepless nights that took us to get there was pretty substantial. And so I think that that's probably the greatest advantage to a firm like Syntheline is that we have a mindset that those risks are inherent, they're inevitable. When we overcome them, then we're accomplishing our job. The idea that we could present to any strategic, industrial, or institutional investor and say this project is low risk or risk-free, it's not risk-free, it's not low risk, but we're in the business of solving those risks.
SPEAKER_00Yeah. It's um you talking about the the hundreds or thousands of small risks versus one big risk just reminded me of the question that I'm sure everyone when they're younger used to ask whether they want to fight one bear-sized chicken or a hundred chicken-sized bears. And it's one of those ridiculous questions, but it just brought that to my mind. And and most of the time you pick the more smaller problems because although admittedly they, you know, there's a lot of things on your mind, they don't have the potential to be to cascade and totally bring everything down so much, they're a lot easier to manage because they're smaller in scale. And yes, if lots of things go wrong, things can go wrong, but you can kind of juggle enough plates to manage them all as opposed to this one huge risk that you can't quite get your head totally around.
SPEAKER_01We also get to talk about reward because the risks that we're managing versus the reward of delivering cost-competitive synthetic fuel feasibly cheaper than fossil fuels. Like this the theoretical limit with reasonable economies of scale would put us at lower cost than the 10-year moving averages of many liquid fuel prices, notwithstanding current supply chain conflicts that have spiked many different fuel prices in many different regions, but even backing that out and saying, okay, forget it, you know, temporary supply chain shock, we really can imagine a world where synthetic fuel within our lifetimes will be so substantially cheaper, double-digit percentage points cheaper than fossil fuels, that we can consume it without having to make an economic compromise, without having to change our behavior. It's a commodity product. So it would just flow through the same pumps and fuel lines and pipelines and tankers as we use today for fossil fuels. And I mean, by my read, if that if we even had a 1% chance of delivering that outcome, it's nothing short of a civilizational level unlock. I want my great-grandchildren to have access to cheap, abundant, and clean hydrocarbon fuels. Yeah. That would be an amazing legacy for companies like Syntheline to lead. And I think our percentage chances are a lot higher than 1%. We're on the hunt here. And if we have to manage a risk portfolio uh that that financial analysts, I'm sure, will will you know pick apart and and highlight to death, well, what happens if we get across the other side and are able to overcome those 1,000 chicken-sized bears? Well, I think
Can Geothermal E-SAF Scale Globally
SPEAKER_01we can, I think, I think we're on the way.
SPEAKER_00Yeah. I want to ask about lot, there's lots of conversation around nth-of-a-kind projects, and that's when you really unlock the vast major vast amounts of capital to scale the industry quickly. For you guys, the uniqueness of the project in Iceland is the geothermal energy source that you guys have, the heat you can get from from Iceland being its unique volcanic location. How repeatable is the model of this project elsewhere? Or do you in terms of future facilities beyond Iceland, or is it Iceland so unique that you can only really do this in Iceland because it's the only place with all the ingredients required to do this at a cost competitive rate?
SPEAKER_01The project is repeatable. There are lots of regions in the world that have shallow and hot geothermal that would be suitable for an energy mix input to uh a thermally integrated ESAF production platform. Places like Alaska, Nevada, Utah, Texas, Central America, Indonesia, Italy, a lot of places in the Pacific Rim. There's a lot of places in the world that are known to be quite geothermally accessible and active. And the good news is we've also got a lot of cool technology companies that are working now to allow deeper geothermal to be accessed more cost efficiently. We just saw a fantastic IPO from Fervo, uh, who've been doing amazing work at the Cape Station in Utah to show how to reduce geothermal costs. And geothermal has sort of been overlooked and disrespected in the renewable energy mix. Maybe the cost reductions in solar panels and batteries have been so compelling, they've warranted probably about $20, $25 trillion worth of investment over the course of the last 30 years. Whereas geothermal on that timeline has only seen a few hundred billion. So it's pretty early on its efficiency curves. It's continuing to evolve with technology and it's continuing to iterate. But I would also say that much like crude oil, we will probably see ESAF production concentrated in regions, centralized in regions that have that magic mix of the criteria that are essential for a successful project.
SPEAKER_02Yeah.
SPEAKER_01Unless we're doing nuclear reactors in everybody's backyard, the idea of decentralized ESAF production in regions with expensive electricity or grid constraints, it just doesn't really seem very logical to me. And so we've got lifting costs for crude oil that are between five and twenty dollars a barrel in the Middle East, in Saudi Arabia, and Kuwait. We don't have those same lifting costs in Canada, the USA. And so we inevitably take as much cheap stuff as we can, we refine it sometimes in completely different places, then we move it around the world through incredibly complex uh petroleum logistics and transportation infrastructure, pipelines and tankers, that by the way, e-fuel producers can also use. So we're the beneficiaries of 150 years worth of that gear. And I do think that in our assessment of different regions with different criteria matrices of matrices of like all the different things you need to succeed, Iceland does rise to the top in a pretty incredible way. And part of that is because they just have so much geothermal. It's really hard to wrap your arms around how much geothermal, understood geothermal, known and explored and unexplored potential there is in Iceland. For a nation of 400,000 people, they're reasonably sitting on gigawatts and gigawatts, tens of gigawatts, maybe a hundred gigawatts, maybe more. And so to effectively utilize that energy, what they really need, what we really want to deliver for Iceland in Iceland, is a co-located consumption of that energy that can then be transmuted into a shelf stable and easily transmutable or transportable energy storage. And that's what hydrocarbon molecules are. They're the best show in town when it comes to storing and transporting chemical energy, chemical potential energy. And a case study on this is we make kerosene jet A1, JP5, feasibly JP8, because of our molecular purity. Kerosene jet fuel today is 50,000 times more energy dense than a lithium-ion battery. So if we can make that stuff and move it around, there's really no better show in town. Making geothermal into electricity and then trying to transport it in undersea cables is very expensive and hasn't proved economic to date. So I really hope that we get to make many millions of barrels a day of synthetic fuel in Iceland. Maybe it's not just Syncline, maybe it's us and peers and other firms and large oil and gas companies and industrials, and everybody joins the party. But then eventually we'd love to do it in the United States. We'd love to do it in other regions in the world where those conditions are suitable and amenable. But you know, I have to say I've really fallen in love with Iceland, and I hope that we get to build an export economy of clean, high-performance synthetic fuels for them, uh, which rivals oil and gas producing nations.
SPEAKER_00The countries and areas you you listed that have potential for geothermal also have another thing in common and that they're big earthquake risks. Are you worried about earthquakes?
SPEAKER_01Earthquakes need to be assessed when you're looking at a project. Um, you know, we did a lot of seismic analysis at the outset of looking at our region, and it's on a fault line. You know, that's part of the deal. Um, but actually, it's been relatively low seismic activity for sort of the last hundred years. Yeah. I love the idea that we're going to be operating this infrastructure for hundreds and hundreds of years, and maybe more companies should be built with that philosophy.
SPEAKER_02Yeah.
SPEAKER_01But uh, you definitely need to assess it in part of your risk matrix, and there's lots of other risks to assess in those risk matrix matrices as well. So earthquake risk is non-trivial, but it's kind of one of those small whole big drop type of scenarios. And uh siting can help a lot. If you site on the, I think you call it the lee side of a volcano where there's quite literally an active volcano, and that's where like a lava flow could and would come or did 500 years ago or something like this, you could just put it on the other side, you know, and you mitigate a lot of that risk. Uh, but earthquake, earthquake risk is is certainly non-trivial, but I would pretty pretty low down the risk ranking based on our ability to analyze historical seismic activity.
SPEAKER_00To be honest, past volcanic eruptions haven't stopped people living around volcanoes base and thinking Naples and a lot of people still live down there. And there's a very famous example of volcano Vesuvius had burying an entire city there. So, you know, people will build
Earthquakes And Other Site Risks
SPEAKER_00wherever there's good practical reasons to build.
SPEAKER_01So if we try to mitigate black swan event risk, then I think we should probably all live in underground bunkers and you know eat canned food exclusively.
SPEAKER_00Yeah.
SPEAKER_01So yeah.
SPEAKER_00I think you're absolutely right on that. I want to come to the another aspect of why Iceland is such a great place is the bureaucracy, the the relationship you can have with government in order to do things practically and efficiently without being caught up in lots of red tape or slow bureaucratic movements. So, how helpful has that been in enabling you to
Permitting Speed And Iceland’s Advantage
SPEAKER_00continue this momentum?
SPEAKER_01Okay, I'm gonna say what I mean here at the risk of offending some of the policymakers who may be watching this podcast, and the Western world needs to get its act together. Europe is a category one bureaucracy-obsessed area to do business. The United States is a bit better and it's state by state. Some states are way better than others, but it's nowhere near what we have experienced in Iceland. Iceland are a serious people. They are dead serious about building infrastructure, they're dead serious about building resources for their future, envisioning the kind of infrastructure they're going to need, and then getting the job done. And I think the Western world could take note. They could take a degree of license from how Iceland does business, which does not put projects at risk of code violations. They're really serious about meeting standards and meeting expectations. And yet somehow they're able to validate those things in a pretty efficient timeline, give clear, concise directions on adaptations that need to be made, and then go ahead and deploy the infrastructure and substantially do it quite efficiently. Do the infrastructure deployment on time and on budget. Sometimes that comes with government partnerships. That hasn't happened for Syntheline yet, but it could be a part of our future. And it's a government that knows what it takes to get infrastructure deployed, operate it, maintain it. I think it comes on the back of an exceptionally industrious people. They've got over a gigawatt worth of electricity generation infrastructure that they do maintain themselves. There's machinists, there's tool and tie makers. But our experience in permitting, licensing, we did a lot of groundwork, in fairness. We built the relationships over a long period of time. We established our reputation, and then we presented ourselves as wanting to invest in their infrastructure, in their economy, wanting to create jobs for. Them and made that a pretty plain-spoken case. And once we came to alignment, I felt that everybody around the table, policymakers, local stakeholders, governments, everybody was saying, okay, we're all on the same team now. Now that we've done the negotiation bit, now let's drive on to get this done quickly. And I was absolutely blown away. A permit that could have taken years in the United States, years and years across various jurisdictions in the European Union, was deployed in weeks, weeks, not months. And that's a testament to me of another axis on the risk matrix. You know, we got to have energy, we got to have a bunch of access to water, we got to have the right prices, all that stuff. But if we're doing that in an environment uh where we can't even anticipate the nebulous nature of what permitting is going to require, so many projects are going to essentially be spending money for an untold amount of time that increased project costs, it it hurts your end unit economics. And so maybe, you know, revised bureaucracy or efficient bureaucracy is an un undisclosed project risk and cost risk. Maybe part of the reason why we're seeing such expensive prices for e-fuel and such expensive uh, you know, uh end unit economics, there is a political risk premium baked into that. Really hard to build new energy infrastructure and really hard to build new projects.
SPEAKER_00I'm gonna defend the European Union and the US by saying Iceland compared to both of those jurisdictions is tiny. And there are so many, there are so many fewer working parts involved. Europe's got 26 member states or something like that, and they're all, you know, they've all got their own agendas that they're trying to get through. So negotiating a European policy across that's really challenging. In the US, you've got the biggest economy in the world, you've got 50 states, you've got the federal state balancing those policies. So it's it's far more complex to manage all those intrinsic parts of those bureaucracies rather than Iceland, which is sitting in the North Atlantic, sort of with its hundreds of thousands of people as all single digits millions of people versus vastly bigger populations in Europe and the and the US?
SPEAKER_01That may be true, but nonetheless, n equals one. We put our dollars to work in the economy that delivered an efficient process through our permitting. So if that continues to be true, why would we ever do business in a place? Why would we ever bring investment, feasibly hundreds of millions or billions of dollars worth of investment, job creation opportunities? And I get it, complexity is hard. But as a government, especially a unified government across many member states, that's your job. Make it investable, make it reasonable. I don't think it's it's an unachievable goal, despite the complexity, to say meet these standards and you can build infrastructure here and we can get it through quickly. And it's gonna need to happen quickly. Even if we were to get 20 FIDs on the 45 announced projects of only one which has an FID in ESAF tomorrow, we've still got construction projects ahead of us. And that ESAF mandate is looming in 2030. So moving quickly is not something that the European Union has a historic reputation for, and it's time to start building the components to build that reputation right now.
SPEAKER_00Do you think you've gone to Iceland where there's great Unix economics who are very clear about not relying on subsidies, whereas
Unit Economics Versus Subsidy Dependence
SPEAKER_00all ESAF producers who are based in Europe are looking very heavily towards the benefits of the um sustainable transport investment plan, double-sided auctions, helping them with the off-take side and things like that, as well as European grants from like the Green Hydrogen Bank, the European sort of development funds they've got there, as well as national government grants we saw Zafra get, a grant from Germany and the Brandenburg state government for their projects. Is there just not enough favorable unit economics in Europe to actually plants to stand by themselves on their own costs and what they can actually generate ESAF for to make it competitive? Is that the bigger problem rather than the policies that are in place that Europe particularly is seeing on the ESAF side?
SPEAKER_01I haven't done enough diligence on our peer firms to be able to say that definitively. I think I do hear a lot of you know policy complaints and frustrations with how this doesn't work right, and if only the policy was better, and somehow policy is going to solve the ESAF problem. When to my understanding, and like this is guidance that's been shared to me with the kinds of industrial investors that do scale this infrastructure, they've said at the core of it, underneath all of that noise, it is a unit economics problem. And when you make ESAP for five, seven, ten times the price of fossil fuel, and you don't have a view to how you can get to cost competition, it's very tough to bank that based on the I based on the necessity for perpetual mandates and subsidies. Yeah. Now, nonetheless, I think mandates, subsidies, policy measures, double-sided auctions, government support, grants, non-commercial loans, all of these are incredible levers. They're really important now in a time where production is small, costs are high, we don't have the unit economics to be able to validate those that cost competitiveness, and we can, and we can get there. And I believe the technology is there, and I believe the energy resources are there to be able to do this. So, can we use all of those mechanisms as a wedge to get towards striking distance of cost competition?
SPEAKER_02Yeah.
SPEAKER_01I think even airlines, if you said to them, you've got to pay a premium on this fuel, you've got to pay a 20%, 30%, even 50% premium, but you're gonna be mitigating the externalities of your emissions, which you haven't been doing to this point and are not doing effectively with fossil-based kerosene. And ESAP also has another feature. It's feed stocks are price stable. So what's going on right now? Supply constraints leading to price shocks, jet fuel is often a canary in the coal mine. It's kind of a leading indicator of other fuels. It happens more violently, the price changes happen more violently, and then they take longer to move away from. Well, I've got long-term potential agreements for all of my inputs, water, energy, carbon, these are predictable and stable. And I wonder what premium any fuel consumer would pay for a more predictable 10-year future price. So that's an economic reason, right? Like that's a good piece of economic rationale.
SPEAKER_02Yeah.
SPEAKER_01And so perhaps even if others can't get to cost competition with fossil fuels, but they can bring other economic reasons why paying a marginal premium, not a multiples premium, is justified. And we'll see airlines more voluntarily uh moving towards this. But yeah, I'm I'm uh I'm pro-policy mechanisms to see this infrastructure proliferate. I want nothing more than many billions, you know, of gallons or of barrels per year production produced in Europe. But if it necessitates perpetual subsidy, I think we're running into another problem, which is that somebody has to pay for it at some point. So it just shakes out in what the taxpayer has to pay for it. And I don't think that's
Funding Strategy And Going Public
SPEAKER_01going to be politically viable. And I don't think it's going to be economically self-interested.
SPEAKER_00Quickly before we finish, how has Syntheline been funded so far in terms of capital raises? Have you done any formal raises? Are you looking to do additional raises? How are you planning the future investment strategy for Syntheline going forward? Just give everyone a flavor of the financial strategy behind Syntheline.
SPEAKER_01We are always raising. I talk to many prospective partners and investors every week. And uh we want to keep and maintain relationships with them as we grow. There's different kinds of categories of investors, and perhaps we're almost ready for the kinds of larger scale industrial investors haven't been ready for that historically. And now we've got this demo facility. We want to make sure that all the uh the large industrials in our camp get first eyes on that and understand uh the implications of being able to deliver these economics and scale them up. But uh we've had some fantastic partners, we've got a really strong cap table. We are really substantially founder-owned, which is fantastic. And actually, uh the windfalls from my co-founders' historic work in nuclear power and other uh projects that they've worked on have allowed us to maintain a pretty strong control over our destiny and our board of directors. Um, and so we brought on some great investors sort of in the transition from lab to this demo facility. We've got uh a group called Inventa Capital out of uh Vancouver, BC, and they are a team that have not just raised a lot of money for a lot of different projects, but they've also achieved project financing for natural energy or natural resource projects and energy projects. And uh there are guys that have gone from sort of small-scale early ambitions to actually deploying infrastructure. So that's been super useful. Uh, we have some really well-heeled large family offices and high-net worth investors that prefer to fly a little bit under the radar, and they've been incredibly supportive to us as as we've grown as well, and sort of multiple groups that fit that category, which is fantastic. And we are the only publicly traded synthetic fuel company on any exchange worldwide. We chose this path because we believe in building in public, we believe in bringing the retail investor along for the ride. And uh, we think that there is a huge public markets opportunity to be able to share the value creation, not just with sort of venture capitalists and climate funds, but also with financial institutions, retail investors. And so you can find us on the TSX Venture at the ticker ESAF or on the OTC markets under the ticker S Y-N-TF. And we're tradable on the Frankfurt Stock Exchange. So for your European audience, they can actually access our uh our stock if they if they want to become shareholders and want to join us on this journey under 3DD0. And we chose that path because we believe it's gonna give us the most control over our destiny, as opposed to the more traditional venture capital route. And it's been going pretty well thus far. It's early days for us, we're relatively small, but as we deliver those incremental proof points, as we deliver further validation that we do what we're saying, what we say we're gonna do, and we do it when we say we're gonna do it, uh, we really are excited to be able to share this news of low-cost synthetic fuel with broader capital markets and global capital markets as we grow.
SPEAKER_00It's really interesting that I didn't actually know that you were publicly publicly listed, publicly traded. That's that's fascinating. So what why did you I get the transparency angle, but purely if we're thinking financial, why did you think that was a better decision than going through what everyone else seems to be going through is in terms of raising venture capital, growth capital, getting in some large equity players, and then looking at debt financing, project financing through that sort of structure?
SPEAKER_01So to be clear, we will still necessitate more traditional project finance or project-specific deployments that can come in the form of debt grants, project-based equity, you know, all that stuff.
SPEAKER_00We won't have the earlier Topco finance. Are you gonna do Topco financing like that, or are you gonna do projects purely project-related financing further down the line?
SPEAKER_01And we do have great partners in that, and that will be sort of its own entity. That's where our IP lives, that's where we'll be licensing that to the SPVs or project-specific vehicles.
SPEAKER_02Yeah.
SPEAKER_01Um, but why did we do it? I mean, in short, it's because we have a bunch of people on our team that have done it before this way. What I will say is it can be scary being publicly traded. You know, you're getting rated minute by minute, stock goes up, stock goes down, stock goes sideways. But if you have the discipline to just focus on the operations and get it done, the rewards are pretty substantial. For instance, we only need to raise a piece at a time when we need the capital. We don't have any investors in our cap table that can tell us when we can raise or when we can't raise. I've also noticed a pretty troubling trend in venture capital, especially for clean energy projects, which, if we're being honest, have kind of fallen out of vogue over the course of the last five years. There was a huge ESG push in the 2010s. That seems to have pendulum swung the other way. And so for some of the most notable clean energy funds and venture capital firms in the world, they're introducing new risk mitigation mechanisms into their seed stage investment term sheets, including things like clawback clauses, anti-dilution clauses, punitive clauses based on timelines and things that are a real risk for clean energy projects. We saw a little bit of that in our kind of early stage exploration, and we said, listen, the public market route for us, the way we've structured ourselves, gives us more independent control over our destiny. And we're not hamstrung to the whims or the investment theses of large-scale centralized investors. We have a lot more smaller-scale diversified investors. We really look forward to collaborating with large funds as we go, but doing that with a well-resourced demo deployment already in play, as opposed to trying to fund a lab-scale thing, in our experience, it was just better structured. Maybe other firms or future firms will have a different experience. But uh, this is not a costless choice. There's inherent risk to being publicly traded. It was just the best opportunity, cost, risk, reward uh mitigation strategy that we found at the time.
SPEAKER_00Quickly before we finish, how often do you check the stock price?
SPEAKER_01Very rarely. No.
SPEAKER_00Daily, every morning, every night.
SPEAKER_01Yeah. Uh I I don't find myself too hamstrung to the price of the stock. Uh Jeff Bezos has a really great piece of insight that he shared in a biography about uh about Amazon, and that is the stock price today is a function of work that we did years ago. And the work that we're doing today will affect the stock price in years. So we gotta just do what we got to do. And if we get our job done, the stock is gonna figure itself out. Uh, and of course, we do marketing, we do podcasts, roadshows, all the kinds of things that are necessary for a successful public vehicle and public issuer to do. But at the same token, we're highly confident that if we deliver our operational goals, then the value will be attributed by those markets. Markets are good at a few things, but ascribing value is one of those things.
SPEAKER_00Awesome. Dan, that
Closing Thoughts And Next Milestones
SPEAKER_00was absolutely fantastic. Thanks so much for joining us and giving up your time to be with us for this episode.
SPEAKER_01Such a pleasure. Thanks so much for your time, Oscar. I look forward to uh more discussions when we get those demo results, when we get uh the next stage of commercial scale up in play. We're early days, we come on the ride, we're moving quickly.
SPEAKER_00Awesome. Look forward to hearing any and all updates. Best of luck.
SPEAKER_01Much appreciated.