Terraform Industries converts electricity and air into synthetic natural gas | Hacker News Reader

Terraform Industries converts electricity and air into synthetic natural gas

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53 pointsjseliger37 comments

Here's a sobering view on the economics of hydrogen: https://about.bnef.com/blog/liebreich-clean-hydrogens-missin...

Hint, they remain terrible and you shouldn't get your hopes up.

Converting air into gas isn't hard technically. It's just really expensive. The expensive bits get waffled over a lot by proponents. But there's no real solution for this stuff just being really, really expensive.

They've supposedly got their H2 cost under $2.50 per kg. Your link calls $2.20 per kg by 2030 "hopelessly optimistic". In comparison steam reformed hydrogen from natural gas costs $1.50 - $5.00 per kg.

That's excluding carbon capture, which is expensive. Blue hydrogen is being talked about a lot but isn't being produced at any scale worth talking about currently. Most hydrogen is grey hydrogen and a tiny amount of it is green hydrogen.

This system proposes using hydrogen to create natural gas. Using grey hydrogen for this doesn't make any sense. It would be more efficient to just use the gas directly. You'd end up with more gas for less money. Even if you capture the carbon and somehow manage to get some cheap blue hydrogen it still doesn't make sense. Especially if you then go and burn the gas and dump the carbon back in the atmosphere. This plan only makes sense with green hydrogen. Which remains expensive.

They also claim to do carbon capture for $250 per ton.

> Most hydrogen is grey hydrogen and a tiny amount of it is green hydrogen.

They specifically explain that they produce fossil-free natural gas, i.e. the hydrogen they use is not grey hydrogen.

Just to point out... the whole point of Terraform Industries is to solve the problems that are raised in that sobering view! That doesn't mean they will succeed, but saying "this is hard, so they won't" is also not terribly useful. Ultimately, when faced with difficult problems, the only hope is to try to figure out how to solve them.

> the only hope is to try to figure out how to solve them.

Or to find alternative ways of doing things that aren't bottle-necked on pesky physics. Who needs really expensive methane? Natural gas is only convenient when it's cheap. When it's not, other means of creating heat are available. The whole premise of synthetic gas is that we don't have to change and it will be great.

The reality is that this isn't all that great. Even at the cited prices it would be an order of magnitude more expensive than what people pay for their gas currently. And I would take those optimistic estimates with a huge grain of salt.

Their target methane price is $10/kcf. That's not "an order of magnitude more expensive". It's about 2X current prices in the US and significantly cheaper than European prices.

Natural gas prices are dominated by the price of transportation in most places. Terraform's process can produce close to where it's consumed.

In other words, if the price of natural gas is $0 in Alberta, Terraform might be able undercut the price of that gas in Europe by setting up a plant in Spain.

People say the same thing about any new tech. Look at solar when it first came out.

Technology advances. Manufacturing costs go down, generally.

Sure, it's just that hydrogen is very dependent on solar and wind making lots of progress. The relative inefficiencies aren't going to improve much because of physics.

The article provides a good breakdown of reasons why hydrogen is very likely to stay relatively expensive and cumbersome for the foreseeable future. I don't think Terraform has nailed that yet. They wouldn't be the first hydrogen centric company to gloss over a few inconvenient things like physics.

With direct air capture, we're talking ginormous amounts of volumes of air that need to be processed. At ~400 parts per million CO2, there just isn't a whole lot of it around. Which means you need to drive some kind of mechanism that pumps enormous amounts of air through the system. Which presumably takes energy and costs money to build.

So, I'd take these numbers with a big grain of salt until they have proven that they can get their cost that low. The hydrogen part alone is nice. 2.50$/kg is still on the high side but it's better than the much higher price points for green hydrogen. Natural gas is one of the cheapest forms of energy which is the only reason it is so popular. Green gas generated from green hydrogen is going to be much more expensive; even at these wildly optimistic numbers. Which raises the question who would buy it and why they would not opt for far more efficient and cheaper alternatives instead. Including some renewable energy ones.

>Manufacturing costs go down, generally.

No they don't, you're just falling for survivorship bias - technology that's successful goes down in cost. Technology that starts off prohibitively expensive and remains prohibitively expensive is technology that tends to stay niche or nonexistent and not thought about.

Successful technology is almost definitionally technology whose manufacturing costs go down over time, but to use that as a basis for claiming that Technology X will go down in cost over time and therefore Technology X will be successful - well, that's circular logic.

BTW, solar when it first came out was solar thermal. Solar thermal, as an electricity source, is dead.

It really depends on the application. If a company wants to provide a premium verifiably carbon-neutral product, instead of some sham carbon credit scheme, they can swap out their fuels to carbon-neutral versions.

There's perhaps some use in capturing excess solar during times of negative prices and instead driving electrolysis. That hydrogen could either be used to sell back to the system when prices are at their highest, or export to another place. As solar enters over-capacity, such plants could be useful.

Congratulations!

Though I can't still wrap my head around it:

1. Terraform needs to produce hydrogen using electrolysis. Turning hydrogen into natural gas requires more equipment and energy.

2. Simultaneously, we transform natural gas into hydrogen through natural gas reforming. Currently, hydrogen is vital for fertilizers and refineries. This also uses energy and a lot of equipment.

So, before we produce synthetic natural gas, displacing hydrogen produced by fossil fuels with electrolytes should be more economical.

On top of that, fertilizers such as ammonia are way easier to ship worldwide than natural gas.

Yeah, and there are several long used and relatively efficient ammonia generation methods for direct electrical conversion that uses nitrogen from the air and water with renewable electricity.

https://www.frontiersin.org/articles/10.3389/fenrg.2021.5808...

The social benefit of such production, considered strictly, probably far exceeds methane. But methane costs more to ship, and displaces demand for Russian gas. Economics is hard.

Producing hydrogen using electricity will only be more economical than than steam reforming when natural gas, coal and oil all run out. I respect the choice to move away from fossil fuels but if you do the calculations on how much this will cost, people will start having second thoughts.

Producing hydrogen using electricity is proportional to the cost of electricity. If electricity is crazy cheap, so is electrically produced hydrogen. (At site of production; transporting hydrogen is also expensive).

Terraform is betting on the continuing cost reduction of solar.

I wonder how many people on this board decrying the cost effectiveness here are also invested heavily in cryptocurrency...

Displacing mined methane is an overwhelmingly better use of excess power.

When calculating the costs, you don’t get to just ignore the huge, expensive harms caused by releasing CO2 and methane into the atmosphere because they are inconvenient.

Terraform believes that the decline in the cost of solar power will make their process profitable in 2027. Fertilizer & ammonia created using green hydrogen may be profitable earlier, lets say 2026.

Seems to me Terraform made the right call by going for the bigger market.

Edit. It looks like they're not ignoring fertilizer/ammonia either: "The company has ongoing discussions regarding prototyping or selling standalone electrolyzers as separate products"

> On top of that, fertilizers such as ammonia are way easier to ship worldwide than natural gas.

That's a big reason why Terraform is doing natgas. The cost of Natural Gas in most of the world is dominated by the cost of shipping. Terraform can produce locally and bypass shipping costs.

The only buyers for green hydrogen or natural gas today are companies where the 'greenness' of the fuel matters far more than the price.

They are happy to pay a 100x or even 1000x premium to have their CEO's car powered by green hydrogen.

As I understand it, the Terraform Industries idea is, roughly, to reduce the price.

More detail: https://terraformindustries.wordpress.com/2024/04/01/terrafo...

Not sure how to meaningfully participate in the movement, but certainly to watch Terraform Industries progress should be quite interesting.

The economics of this sort of thing is full of surprises.

Someone with a solar farm who cannot sell the excess they produce at noon (local utility won't take it) can put it into producing methane to sell (or use), if the equipment is cheap enough to amortize over only the over-productive intervals. And claim extra carbon credits for displacing mined methane. They might install some extra panels to increase the intervals. Displacing methane they would have had to buy yields more value.

Probably in the future it will be more profitable to produce ammonia instead. Ammonia is even more useful than methane.

Yes, the equipment needs to be cheap if it's not running very often, or it won't pay off.

That's their whole thing — they deliberately save on capex by accepting lower efficiency, because that in turn allows running it intermittently on cheap solar without extra costs like batteries or having to run on more expensive power in the night etc.

I have no idea how realistic their end game is, but the general approach seems like a smart idea.

https://caseyhandmer.wordpress.com/2023/08/16/how-to-produce...

Ammonia has the mild issue that it's not just flammable, but toxic and flammable!

The 273 btu of gas they have stored in those impressive cylinders is equivalent to 0.08 kWh. Here's hoping for more to come.

I'd be curious to see how much the economics change if they were go to go from DAC to sourcing CO2 from a pipeline.

The math should be straightforward. From their white paper: $2.50/kg for H2 + $250 / ton for CO2 -> $10/kcf for methane. So we can roughly calculate how much of the $10 is H2, how much is CO2 and how much is the Sabatier process. I'd do it, but I'm supposed to be working and not confident I'd screw up the unit conversions.

I think this is really cool, I think the economics of it are really tough, but there's a lot of ways natural gas is just a much easier thing to deal with, or at least a more approachable with our current infrastructure.

I think taking a step back though, the hydrogen itself is important in the first place.

I don't know if it is the largest use of hydrogen, but certainly the significant use is in steam reformation of natural gas to make ammonia.

It's not power generation, but it's keeping us alive and natural gas is a feedstock more than a fuel. You really are finding a way to replace it and its not fungible in the way electricity is.

I've always thought it would be better to produce something like methanol. The chemistry is similar, but methanol is not gaseous (at typical temperatures). That makes it much easier to handle.

Methanol is strictly harder. There is enough demand for any amount of hydrogen or methane that can be produced cheaply enough. Methanol can wait until those are saturated. Ammonia might be another intermediate step before it is worth doing methanol.

One thing about methanol that is not easier to handle is the fact it burns invisible on its own.

I was a bit confused about where the hydrogen is coming from. Apparently, they pull water vapor out of the air as a side effect of capturing CO2.

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