How Kelp Can Transform Agriculture
0:21 All right, Daniel, I start this podcast after I get fired by Katie Anderson, and I think it's going to be 13 year old me telling poopy jokes, you know, because I got this wonderful great sense of
0:34 humor. And when I started it, the industry actually was in the doldrums, right? We had had minus37 oil and half the industry had been fired And so it became more serious. I started, I've just
0:50 had a lot of therapy in my life and I'm happy to talk about it. So I do all that. Never in my wildest dreams would I have imagined that I would do a podcast on kelp. I didn't even know what kelp is.
1:03 This is the second kelp podcast I've done over time. So thanks for coming on. No, pleasure, Chuck. Thanks. No, no. Who are y'all? What do y'all do?
1:15 We grow giant gulp, so the type that you'll see off California. sort of 50-foot high rainforest jungles or the trees with thick canopy. So we grow that species and we grow it because it's an
1:29 enormous biodiversity booster. You get hundreds and hundreds of species which feed in there and thrive in there and feed on each other and because it sequesters carbon and to fund all that we cut the
1:42 canopy and we turn that into products. Basically our first product is an agricultural input, let's say a fertilizer substitute to keep things simple. Kelp juice that makes plants grow faster, grow
1:55 better, better yields for a farmer, better soil health, so there's both instant and long-term benefits for the customer. So growing kelp, I'm imagining what like wires that you drape it over out
2:12 in the ocean, how does that work? Yeah, so kelps have what's called a holdfast, which is sort of claw-like foot, holds on to a rock. And we grow them in a lab, in a hatchery, till they're
2:25 about two millimeters, three millimeters, aside like a quarter of an inch, I think. And then we plant them out either on lines, so long polystylerot lines, or on blocks that we place on the
2:39 seabed. Okay, what part of the world is this growing in? Is this you need to be in warm water? No, you'll need cold water. So they're happy in 7 to 16 degree water. I have no idea what that is
2:55 off the top of my head in Fahrenheit. I think it was about 45 degrees Fahrenheit, Max. It's so cold, cold water, but you won't want to be in there very long. And you're warmer than that, and
3:06 they struggle to get nutrients because other critters will have eaten all the nutrients faster. And so any warmer than that, they'll shrill up and die. So what is that, is that North Sea? It's,
3:19 no, the one area in the world where it's not endemic is the North is Northern Atlantic. So it's basically the whole Pacific coast of the Americas in the right temperature bandwidth. So Alaska all
3:30 the way down to California. And it goes as far south as California because of the cold currents that come up there. And then there's a little pocket in Peru caused by like equatorial upwelling,
3:42 very susceptible to Onigno and La Nina. And then it starts again farther south and Chile and goes all the way down to Teodefuego. And then you get pockets of it around the Antarctic Rift. So all
3:53 the islands point of Southern Africa, Tasmania and New Zealand, so yeah. So how does that work? You license from the government in effect some of the ocean to drill How far off shore are you?
4:12 At the moment, we're pretty close to shore. So in Namibia, we've got, we
4:18 won't be any further on the three nautical miles off the coast. So you can see the dunes, you can see the desert. And you get a license from the Ministry of Fisheries much like you would if you're
4:27 a muscle farm or an oyster farm. Alaska, we're a bit more inside. We're not on the open ocean 'cause it gets too rough there and the seabeds too rugged. New Zealand, we're licensing also
4:39 relatively close to shore So every country's a bit different. Okay, Dave. And so what's a growing season like? Meaning you're planting these things at two to three millimeters. How long before I
4:52 in effect harvest them and sell them? Five months. Really? Till they're sort of 100 foot long, weighing 1, 000 pounds plus. Really, it grows that quickly. It's a jungle behemoth that grows
5:08 overnight pretty much. And as I recall, there are different types of kelp. There's what, brown kelp, red kelp. Yeah, so I mean, what we call seaweeds is basically anything plant-like in the
5:21 ocean. And from red seaweeds, which can be tiny and look a bit like crinkle pubicare, you can go to brown kelbs, like the ones we were growing. And that's as much genetic diversity as between a
5:35 rabbit and elephant. You know, they're really quite different species Well, that's fascinating. And so you plant them five minutes, five months later, you're out there harvesting them. What's
5:45 the processing like on that? Is you run it through a machine of some sort to create the fertilizer? Yeah, so the species we picked, like giant kelp, we do because it grows faster than all the
5:58 other seaweeds. Its niche is to grow and die quickly. Most seaweeds die because they get covered in other critters.
6:07 snails, barnacles, barazos, which are sort of
6:14 crustacean-like calciferous sort of creatures or other seaweeds. And then eventually they just get weighed down by all this stuff that's trying to eat them. And so Giant Kelp's ecological niche is
6:21 to grow really fast and to die really fast. And in the
6:27 meantime, it's sending all the sugars down its stem to feed the little cousins and brothers in the dark. And so when it dies, new sunlight comes in and it grows back really rapidly. And so we make
6:39 use of that by cutting the canopy just before it starts to die. And that actually makes the little baby plants grow faster because they get exposure to sunlight quicker. So it's a bit like if you've
6:49 got a farm and you're cutting hay, if you get the right pattern of cutting hay, you can get more biomass. If you cut too fast, you're limiting the growth. And if you cut too slowly, then your
7:00 hay is both very thick and regrowth is also slower So that's sort of the. The thing that also makes it really different from growing other seaweeds is one that you plant at once and then it lives
7:12 forever. Well, forever, you can harvest the same plant for a very long time. And the second is that you can harvest it mechanically. So you sell through it with basically like a
7:23 mower like you would use for barley or wheat.
7:27 And then you cut off the canopy and you process that. Oh wow, that's pretty fascinating And
7:35 I have no concept of how big a market this might be. I mean, fertilizer, it seems like it's a huge market. Yeah, huge in fertilizers. I don't know, runs in the hundreds and hundreds of billions
7:44 of dollars globally. And so we're,
7:49 I mean, it's not a silver bullet that replaces all other agricultural inputs, right? It's one of the tools in the toolkit of the farmer. But it's a big market that we can address Yeah, the, but
8:02 that's not the end game, right? I mean, ultimately, isn't this. kind of save your sequestering carbon, potentially? Is that the home run case here? What excites us most is the biodiversity
8:16 boost. And that's also much more visible when you jump into a kelp forest. You just see it teams with life. There's all these life forms that are sheltering there and living off each other. And
8:26 that has a regional impact. So Sardines, for example, that were wiped out by overfishing in our Namibian waters. If they lay their eggs in a kelp forest, which they will do by preference, those
8:38 eggs have a thousand times higher success like survival rate than if they just lay them free floating in the ocean. So the speed at which a kelp forest of size can help to restore an ecosystem is
8:49 pretty phenomenal in the ocean because the whole thing teams with life and the cycles are so fast. So that's what really excites us. Like, carbon is, of course, the sexy topic of the day in some
9:01 circles, but it's invisible. It's like a waste problem that you can't really see. So while I think anybody with his head screwed on right can see that this is a problem that needs addressing, it's
9:13 also very intangible. It's chemistry. It's something that humans should be able to fix fairly easily. And so that doesn't give us as much excitement as the biodiversity does, which you see as soon
9:25 as you jump in the water. But ultimately, the way I look at it,
9:32 that all may be the case, but the only way you fund vast kelp forests is by mobilizing a lot of capital. And if you want to mobilize a lot of capital, you're gonna have to show people a return for
9:43 it. So we're pretty agnostic to the reason why our investors want to put money in. I guess some of my younger staff, when I say, look, why don't we talk to, let's say, Shell Nature-based
9:55 solutions, they're like, oh, let's not talk to Shell there. They're the dark side, okay? AI worked for the dark side for 20 years, and it's a great company, but full of great people.
10:05 But if you really think that the world needs to change, what better way than to pull capital from things that you think are not productive for the planet towards things that are?
10:16 And I think ultimately, when you look at the world and how we're gonna save the plant and all that, I believe you're right. And that ultimately, if this is a huge problem, we actually deal with
10:30 huge problems pretty well in the United States. Yeah We're crappy day to day, we don't do day to day very well, but throw the Nazis at us and we will go win. I mean, we mobilize things, take
10:42 care of problems. But you remember what Churchill said in that exact context is that the Americans can always be relied on to do the right thing. The problem is they'll try everything else first.
10:52 First.
10:54 My girlfriend's British, I'm surprised I haven't heard that a million times.
10:59 But yeah, no, that's
11:02 exactly right. So you were a shell guy? Yeah, I spent 20 years a shell. Yeah, so wonder me through your career in terms of how you got from shell to the sea. That's pretty fascinating. Yeah,
11:17 so I finished school at 16 and a half and went to Russia for a gap year. I'd been doing Russian at school. My father had been a military intelligence, so I wanted to be a spy
11:29 So where were you from growing up? I'm Dutch, but grew up in Dubai and Canada, and my father is a banker and a sort of general entrepreneur. So this was a school in Canada, hence the sort of,
11:41 you can pick up some Canadian accent here and there. So I can't, you know, my girlfriend's British and I'll meet somebody from England and she'll be so offended that I can't detect
11:56 the accent, what regional dialect of British it is. I'm like outside America, I don't know. So yeah, I don't pick up that well. But I won't insult you. And so many places that it's sort of a
12:06 mongrel accent of all sorts of things. My understanding is if you're from London to be called Australians the worst you can do in terms of interpreting an accent, so we'll leave that all out. So
12:19 anyway, I went to Russia for a year and that was just as the Soviet Union had fallen over so early '90s and then picked up sculpting there and did my degree in engineering officer technology back in
12:32 the Netherlands and then was a sculptor for a couple of years and then actually went in - Like an artist, a sculptor, how cool. A figurative realist, like bronze busts of people's faces. Oh no
12:42 way, in a second, so an unusual dying art
12:49 but living in. Amsterdam and the Hague, encircled by other artist friends, was just, didn't feel like I was really very alive, 'cause you don't see much suffering, or
13:02 the big problems of life aren't that apparent in rich places like that. And so I wanted to see a bit more of the world again. And my ex-girlfriend, my girlfriend who then became my wife, who then
13:14 became my ex-wife, was working at Shell, and she said, Why don't you join the drilling industry? You're qualified for it, you'd like it, and then you see some strange and interesting places. So
13:24 that's what led to me applying to Shell and joining their drilling program, and that brought me to. How does that job interview go? What have you been doing? Well, I've been sculpting. Well,
13:33 it's very interesting actually, 'cause that job interview didn't go very well at all. So much later, when I joined Shell, I trained to be an interviewer myself, and they have a fairly involved,
13:45 form of interview, which without going into too much details, basically the precept is you come in and they pick a topic that has nothing to do with oil or engineering, and you just dig into how
13:56 you think about things. And so here was this HR person and started saying, We're gonna have a
14:04 discussion about genetic engineering. I was like, I didn't come here to interview for that. I go, Well, no, it doesn't matter. Anyway, she didn't prepare me very well So, for why we were
14:15 doing this, or I didn't listen to the first sentence. So, halfway I just - That was kind of halfway I'm like this is a waste of time. What am I doing here? And I got up and left. So then, I
14:26 think it was 18 weeks before I got a letter which said, Thanks for coming, but no thanks. And my girlfriend who knew the head of HR said, Look, this is, how can we spend 18 weeks getting back to
14:38 somebody? So he called me and, and said, Let's have a chat just so that I understandhow people who are interviewing for a job hereexperience our service level, so to speak. And anyway, we sat
14:51 there and talked for about four hours while chain smoking, that was still possible in show offices back then. And then at the end, he said, Actually, I'm an overrule lad. You're going to the
15:01 assessment center anyway. So I sort of snuck in by the back door. Oh, that's kind of cool. I still have the letter. I kept it, I thought, Who knows? If I make it to CEO, then I should print
15:10 thatand put it on my door. I saved all my rejection letters from it from the investment banks. Is that a big box, Chuck? Yeah, it's a big box, he'll tell you. But no, so when I was running
15:24 Kane Anderson, of course they all came in and wanted business. And I mean, I can be pretty snarky and a bit of a prick, but even I didn't frame all the letters, but I thought about it. That
15:34 would have been really cool. Which one were you again? Yeah, it's a sort of revenge fantasy that I guess Yeah. Never really. matters that much once it goes down to it.
15:44 I do have one kind of thought, 'cause your CEO of a company, how many employees do you guys have? We've got, I mean, if I include the research students that we sponsor and the school teachers,
15:55 we also run a school who are on our payroll, and it's just 120.
15:60 Yeah.
16:02 And I'm curious about this, 'cause this is one of the things I think I messed up with in my career, and sorry, I have ADD, and I didn't take my medicine this morning, so we're kind of bouncing
16:13 around, but
16:16 how many of those folks were you actively involved in in interviewing and hiring? 'Cause
16:26 you had this experience at Shell, did it drive you to do certain things when you had your own company? Yeah, I mean, initially everybody, and you sort of tell yourself, this is really important
16:38 that you interview absolutely everywhere, everybody. But, you know, sadly, as you get bigger at some point, you just don't have the time and people can't sit around and wait for you. So of the
16:50 staff probably 40, 45? A third of them. Yeah, interesting, 'cause one of the things I found in my career is I wound up delegating that quick, thinking, you know, I was way too important and
17:06 too way too busy And what I found was is that I didn't get my team in place, you know, at the end of the day. And so I struggled to maintain a culture around the place where in hindsight it should
17:24 have been no. I should have been looking for things, my type of fit person in the interview, instead of, you know, people walking in my office going, yeah, we interviewed 27 people, here's
17:37 number one and I'd spend 10 minutes with them, you know. interesting. So back at Shell. So you got to work for Shell. Yeah, so I went to work for Shell had the intro courses. That's where I met
17:50 met some of the people who've introduced us today.
17:54 And then went off to Nigeria for three and a half years, so swamps, shallow offshore, great training ground because there's a lot of different stuff going on that's not planned. Also because I
18:08 guess it's a bit like being an NCO during wartime where all your officers get shot away above you. So you get promoted a little faster because Nigeria has a way of sort of having a high attrition
18:19 rate, because it's tough. And people don't. I don't put this politely people don't generally people don't find it very easy to work there as a little run to next job as soon as they can. So so
18:31 within eight or nine months, I was drilling supervisor, you really don't know what you're doing that yet. And then, of course, the biggest mistake you first make is thinking, Oh, I'm the boss
18:40 now. I've got to tell everybody what to do. But if you don't know what you're doing, then that goes wrong really, really rapidly. So it was a quick sort of baptism fire to realize that maybe you
18:50 should just ask people who do know what they're doing, what would be wise. And I think ever since my model has been to let the team make the plan, you know, it's a pretty simple wisdom that
19:06 strangely a lot of people don't follow. And every now and then I'll weigh in and start making plans again and those are always the one that go wrong. So you got to let the team make the plan,
19:17 they're going to execute it. You got to make them have, you know, have them make decisions at the level where the info flows. That's not where I said I got very limited, limited info So I always
19:30 found that as kind of running the group to that people only told me what they wanted me to hear. or what they think you want to hear, which is even worse, 'cause that
19:40 might even not be what you want to hear. Yeah, and you'd sit there, and then when you'd finally sort to the bottom, it's like, guys, if you'd have just told me this, we could have done X, Y,
19:49 and Z, yeah. I was,
19:55 that was
20:00 always tough. Thank goodness I had a really good assistant. God loves Stacy, who would come into my office. I don't think you're, I don't think you're getting the full story on this I'd be like,
20:06 Oh, okay. I was reading a fax, right? You know, I saw this and so, yeah. No, that was, that was always, always important. Yeah, it is. Yeah, so Nigeria was a great, great schooling
20:18 ground in that sense, and also just great for, for sheer adventure. Like, it didn't always feel that fun, but I won't spend a couple of days in a wooden cage in a village. Well, they, well,
20:28 they, were discussing how much it was worth. Well, I guess it was my first valuation discussion. It was also, it was also a cold shower. I think they asked for a million dollars. Come on, I'm
20:42 worth way more than that. And then ultimately, I think they settled for like700, which I - The ransom red cheese, I think,
20:51 like.
20:54 I don't even know what to ask on that. I mean, literally you were being held hostage Yeah, in a wooden cage that wasn't long enough for me to light out and sleep in with a bucket. Oh my gosh.
21:05 Toilet and full sight of everybody. 48 hours, 72 hours. Almost three days. Oh wow. I mean, I can't even imagine what goes through your head at that point. A lot of different things.
21:19 I mean, mainly I was terrified of getting malaria. I'd stopped taking malaria medicine somewhere in my first hitch in Nigeria I first took Larium, I don't know if you've ever had that experience,
21:31 but. Lariam is a heavy and cheap molarial drug, and it gives you really bad nightmares, which are super lucid. So I was taking this and I was waking up, I mean, I was in a dream, but thinking
21:44 that I was waking up on the rig in my room, picking up a 19-inch pipe ranch and wandering around, like clubbing people to death, and then waking up
21:55 and thinking, Where's all the blood? Like it was so lucid that I thought I was going mad So they took me off that, put me on my alarm, that gave me an upset stomach, so sort of two or three weeks
22:02 into the tropics, I just stopped taking malarial drugs, which is really a stupid thing to do. But despite that, I'd, you know, eight years in total in the tropics, I'd never got malaria.
22:13 Oh wow. So, some luck going on there. Yeah, I guess being hello. Or maybe mosquitoes just think I'm really filthy
22:25 This guy looks skinny, he's not fat and delicious, yeah, exactly.
22:31 I took, what's the cue medicine? Isn't there one that starts with cue that's - Quinning. Yeah, I took that when I was going somewhere. That was the recommended medication. And Quinning is still
22:42 the treatment as well. Oh, okay. And Quinning sits in your tonic. That's why people drink gin and tonics. Oh, there we go. It's an anti-malarial drug. Oh, there we go. Yeah, in addition to
22:53 the sun never setting on the British Empire. I always thought that's why it was gin, but that makes sense The, God, that's just crazy. I couldn't imagine being held hostage. Yeah,
23:06 it wasn't amusing at the time, but I mean, later it's a great story. Yeah, I don't know how you are, these things. I just forget the bad stuff. I forget the names of people I don't like.
23:16 That's great. You don't need to fret about revenge or be bitter. Yeah, I'm pretty good at making myself a martyr by just having regular day-to-day occurrence I don't think we need to add to it and
23:27 actually give me a held hostage by someone. Wow, that's crazy. So did you suddenly there after one out of Nigeria and moved to the next one? You wanted out of Nigeria all the time, but then the
23:41 strangest thing is that as soon as I'd get back to the Netherlands, I'd be like, I sort of miss the chaos. I think it's the whole adrenaline rush of all these, all this crazy stuff going on is
23:52 also fun. I had one fella and I'm blanking on his name He's a really good dude who went to work for Shell as a subcontractor. I forget where it might've been Nigeria, right when COVID hit. And he
24:07 got trapped and he lived in Vietnam of all places and because of COVID couldn't go back home for a year. So he wound up living in Turkey for a while and then made his way. I think he was able to get
24:22 to Singapore, but got, got stuck literally was, was out on the rig. And COVID was starting to hit and rumors of shutdowns and the like and walked in and said to his boss, what should you do? And
24:37 he goes, I'm surprised you're still here. I get out. So yeah. So where'd you go after Nigeria? After Nigeria, I went back to Russia. So she'll have a joint venture there in Western Siberia, a
24:50 place called Salim. So that was Greenfield taking sort of tundra and turning it into a functioning oil field So great fun running about four rigs and 18 work over units.
25:04 Then I went to - So what years or is it in Russia? 2004, 2007, that sort of - Okay, early days of Putin. Yeah. Yeah, gotcha. And so I'd been in Russia in 1991
25:21 or two, Yeltsin just taking over and then I'd been, back mostly to various republics, mostly to Georgia and so the country, not the state, in the Caucasus for most of that decade. So I followed
25:36 the sort of transition from Yeltsin to Putin and then about 2004, Putin went, started to become a sort of despot that he is now. Right. It was very noticeable. The trends, they used to play
25:50 really bad Western pop music and then suddenly overnight they were playing all these soviet who are semi-fascist greatest hits again. Was there a specific event or just he got comfortable and I think
26:06 he got comfortable and realized that he was that nobody was going to remove him anymore. Yeah. Before that he was still worried about various different factions, I think, but who knows what
26:16 happens in the minds of people who have too much power. Yeah. No doubt Yeah,
26:21 I always find that and fascinating in that on one hand you have the left saying that Trump is a stooge for Putin. You know he's a plant, he's a secret ally or whatever, but then you look on the
26:40 other hand and it's well Putin took George Under Bush. He took Crimea under Obama and he invaded Ukraine under Biden And it's not like Biden won the election and Putin went, oh, it'd be a great
26:57 idea to march into Ukraine. I mean, he didn't take any land under Trump. And so I've always wondered, do you have any insight there in terms of. It was
27:12 right. I don't think Putin's mathematics are really influenced very much by what president is in charge. I think he rightly.
27:25 assesses that the West is not going to intervene in something that he does, and that he can go very far. Although, I mean, I said that, like the Georgian War, I was in Georgia at the time, and
27:36 that stopped. The Russians stopped moving and advancing because, so a
27:44 bit too much detail, but the Georgians had three battalions of well-trained troops, and two of those were in Iraq, where they were supporting the Allied, the US. intervention, doing a handover.
27:57 So the whole story that the Georgians started this war is obviously nonsense. You're not gonna do that when two thirds of your capable troops are out of the country. You're gonna do that when you
28:04 have all your capable troops. It's, you know, if you're invading a country, you do it when two thirds of the troops are out of the country, which is what the Russians did. And then the American
28:14 Air Force General in charge of Iraq at the time, flew those two Georgian battalions back and had them escorted. by about 30 or 40 fighter jets and flew them over the northern border of Russia and
28:31 Georgia. So over the heads of the Russian invading troops, had quite a low altitude. And I remember sitting on our balcony while the war was going on in these massive, I mean like a hundred plans
28:43 or something coming over to land. And that's when the Russians stopped. So, I think the US can have enormous influence on these things, but it does require people to flex their muscles and there's
28:55 a lot of danger between two nuclear states when you do that. That Air Force General was rightly court-martialed. I mean, he was given a medal, so they held a court-martial to say, You did
29:08 something that was high risk. And then they commanded them for doing it 'cause it ended well, which is good, which is good. So, does Trump or no Trump have any influence on what Putin does? I
29:19 don't know, I think at this stage,
29:23 probably well beyond calculating anything like that into this calculus. Yeah, that does scare me. I think you bring it up rightfully so, two nuclear powers. I mean, it's one slip and that's bad.
29:39 So,
29:42 see, you were in Russia, where'd you go from Russia? From Russia, I spent a sort of sabbatical year in Georgia if I'd picked up a number of different businesses and none of those were working very
29:58 well because I was an absentee landlord. So, I spent about nine months wrapping all that up.
30:04 While doing a bit of part-time work for Shell in Jordan, where I spent the next eight years after that, which was an oil shell venture. So, not Colseum shell, but oil shell, like in Colorado
30:16 with the heaters. And, you know, the idea was to heat up, Do what geology does in a couple of weeks instead of in 25 million years and then extract the oil that way. Did it wind up working?
30:32 I guess it probably could have worked The the the view at the time was that we should be using cattery gas to do it And there was sort of two barrels of energy in and one or three barrels out which
30:43 never seemed very efficient We were exploring doing it with With with by circulating molten salt that you'd heat up and parabolic mirrors I think that would have made it both more cost effective and
30:56 and lower sort of energy and carbon footprint So now I didn't end up working because it was way too cumbersome expensive and technical And given that I think I think we were gonna build 10 trains in
31:08 Jordan and each train at a bigger carbon footprint than the whole of shell worldwide
31:13 Bizarrely, so this is 2008 and I remember there were two of us the senior sort of deal lead And I were the only ones who'd occasionally say, guys, don't we think this carbon thing should be a
31:25 little higher up on the risk register than number 150? And people are looking at me. Why do you think that? It's 2008. Six years ago, obviously, it would have been pretty close to the top if you
31:35 had a project with a carbon footprint on that. You know, one, two, and three, yeah. Well, you know, back in '08, I remember we were just starting horizontal, fracking, natural gas, and the
31:51 kiss of death used to be if you drilled horizontally and found an oil well. 'Cause it'd make a thousand barrels of oil in the first day and then three days later, it'd be a 10 barrels a day. And
32:02 that was just the worst thing ever. I mean, it took us a couple of years after that to figure out the propant to actually hold up in the formations and all, but yeah, You were trying everything
32:15 back then of how, you know, we're out of oil. Matt Simmons, Twilight in the desert, peak oil and all that, so that was kind of crazy. Any good Jordan stories? Jordan was, I think, one of the
32:32 many highlights of our career are both professionally and privately, because a really lovely country live. Amazing people I mean, rough neighborhood, you've got Syria, Iraq, Israel, Saudi,
32:47 there's always some sort of major crisis going on, but Jordan is this little pocket of peace with super nice people, a great sense of humor. My girlfriend was a BBC reporter and covered the Middle
33:02 East and lived in Jordan for a while, and she loves it. She says it's her favorite place on the planet Yeah, I might agree with her, gorgeous desert and the Dead Sea and the Kanyans. Fairly
33:16 western. Yeah. But just no resources, right? Yeah. They were kind of. Well, maybe that's a blessing. I don't think they see it that way, but see what the nations around them that do have
33:28 resources, it hasn't done them much good. Yeah, that's true. That's very true. So then. And Jordan was also professionally interesting because it was, so we were there to do, let's say the
33:41 exploration phase and map all this marine shell that would then be heated.
33:47 And so we were drilling hundreds and hundreds of wells in all over the country. And these are very shallow wells. It's inert, there's no boiling gas there, so you don't need blood preventers. And
33:58 so we did this crazy thing of looking at a different industry to see whether they were maybe smarter than us, which is very difficult for the oil and gas industry to do that, which tends to be
34:08 pretty arrogant about its technical skills. So I did a lot of scouting to Southern Africa But both water well drillers in really remote desert places that drill relatively deep, but particularly
34:22 looking at continuous coring for the mineral exploration industry. So you've got oil and gas coring, I can't remember what it costs per meter, but3, 000 per meter probably there about. And then
34:34 the people who explore for diamonds are, they're depressed if it costs more than70 a meter. So who should be learning from who in this? Right Right. So we researched that and then we went back to
34:38 Shell and we were all, the three of us who were running this for about
34:50 29 or 30 years old and went back to Shell and said, Okay, we got a plan. We're going to buy rigs. We're going to design bespoke rigs. We're going to buy them. We're going to hire our own people
35:00 and we're going to do this all ourselves. And I guess you can imagine what sort of reception
35:07 we literally had older guys slamming their fists on the table and you know.
35:13 enraged and saying, like, there's a reason we moved away from this. I mean, what was the reason then? Right. I don't know. Unfortunately, we had a few people who said, well, you know, let
35:23 him try it. What's what's the problem? Like, he thinks he can do this for what effectively would be 10 times cheaper. Let him try it It. doesn't work. It doesn't work. And so we did and we
35:34 delivered that. So as we were, I think we were 10, 15 times cheaper than anybody thought we could be. So that was, that's good. Like that's a, that's a, that's a real rush of professional
35:47 pride when you achieve something like that. And you do it with the whole team that you've hired, you know, blue collars, mechanics, we're all part of the team. And it was just much more fun than
35:57 getting contractors in. I always, always had a view on our industry that I call us a lottery ticket industry in that, you know, because of so many things that can happen. saw these wake up in a
36:12 bad mood and price of oil will triple because you could literally just be drilling along and oh by the way you you hit a structure that nobody knew was there etc. Because of that you didn't really
36:27 need to run a very efficient business because at the end of the day you just needed to be in the game when one of these big things happened but to the extent it was ten times cheaper ie. something
36:40 that really moved the needle we would do that better than anything on the planet so i mean horizontal drilling modern frack what we've done with shale i mean that's a home run so of course we're
36:51 really good at it some some i mean even to this day i'm certain that some oil and gas companies still keep their books on a ledger you know with dances and stuff so it's true it's an industry that
37:04 masks a lot of incompetence and a lot of huge competence behind the underlying oil price like you can You can do amazing things, but if the oil price drops, you're a loser and you can do great
37:15 things. Or you can do really bad things and the oil price goes up and wow, you're the best manager there ever was. I always say that as an entrepreneur or an industry, as anyone on the planet,
37:27 I'll put us up against Silicon Valley, you know, any day with the amazing feats we can do. Yeah, much more difficult. I mean, I learned this term recently called full stack
37:40 execution and basically it means that you've got to make sure the toilets are running, but it also means you need to keep your regulators happy and everything in between in a highly technical
37:50 business strikes me
37:57 as a lot more difficult than software, but you're juggling 50, 60 balls at the same time and you can't drop too many of them. Yeah, no, I tried. I mean, people can die out on a rig. They don't
38:04 really die unless they
38:06 drink too much Mountain Dew in the software room.
38:14 But what was the ultimate underlying, and if it's too technical, feel free to move on, but when y'all created the 10x cheaper drilling, what was the basics of what you figured out from the diamond
38:29 guys to make that happen? I don't think there's a single answer to that. Like there's a hundred things that you look at and improve and fine tune,
38:40 but the big step change is just approaching every problem in its most rigorously simple physics is it. And whatever, chemistry,
38:52 then just cutting away all the middlemen, all the sort of transactional stuff that we do, 'cause we always did it. It's about cutting away stuff and just keeping the job front and central and
39:04 executing the job.
39:06 No extra nice to have is no this, no that. Just be really, really ruthless about what it is that you need to achieve and then set out to achieve it. Oh, nice. That's, you know. And this is, I
39:15 think, where people also struggled to
39:20 see what it was that they were supposed to copy to achieve that elsewhere. 'Cause they'd sit down like, okay, what do we tell the contractors? Oh, yeah.
39:30 We didn't have contractors. So that
39:34 inherent problem of having different values drivers, that any contractual relationship has that, you've removed that. And so you can really genuinely talk about what the end goal is that you're
39:48 after and then let the team figure out how to get there.
39:52 Yeah. Interesting stuff. So how do we get into the ocean with seaweed? Yeah, same way. It's also about being extremely clear the why? Why are we doing this? For us, that's really about the
40:12 biodiversity and the carbon.
40:15 The money-making side is absolutely essential, because without it, you can't achieve your goal.
40:22 And what we're doing is planting kelp forests.
40:25 Everything else is peripheral. Was there a spark? You read an article somewhere, was there? I mean, from Jordan, I went to Gabon, which was totally different, was Brownfield, fixing an old 50,
40:39 60-year-old shell company, which was struggling to make money in 2012, '13, when the oil price was, I think, 130 or140 a barrel. So if you're struggling to make money in that environment,
40:51 you've got a fundamental problem.
40:55 That was a great job. Very fun It may not be fun to have to lay off lots of people, but ultimately very rewarding as well. and then went to Australia where I was based, but running a joint venture
41:09 between Shell and the Chinese state, trying to do all sorts of innovation. So technical innovation, commercial innovation, electric fracks,
41:19 various different things, automated rigs, machine learning. And while I was there, my wife went to a lecture by an Australian scientist about seaweed, and I'd been looking for different things to
41:30 do for a while, just 'cause the pace of a big behemoth, like Shell, is, I felt, was a bit slow in decision making. Did I put that diplomatically enough? Yeah, very diplomatically. Shell
41:43 should be happy with that. No, they know it. And consensus culture is also designed to be, and it's what you do if you're big and you want to avoid the risks of taking tasty decisions.
41:57 So I'd been looking for something else to do for a while, But.
42:02 You know, we all have a bit of imposter syndrome or a lot of imposter syndrome. And you don't really know what you're good at 'cause you think, I'm an oil field guy. So that must be what the only
42:11 thing I can do. And then suddenly the seagull day come by. I'm cutting you off and I'm sorry, but that was always the hardest thing for us to do. 'Cause in effect, we were private equity, but we
42:23 were doing startup oil and gas companies and we were doing early stage assets. Like we would literally drill the first horizontal well in a county, we kind of felt like our competitive advantage was
42:36 half my partners at Kane Anderson were engineers. And so we could see kind of the latest and greatest in completion technology and go, Wow, if that's working in the Bakken, it ought to work in the
42:49 Southern Midland Basin, where's some rock that looks similar? And we'd work with our management teams to help transfer that technology, if you will, hope to beat the industry because they're no
43:01 great. secrets in the industry, you know, beat it. And it was the hardest thing for us to do is when, like, if you walked in, you would talk through all these wonderful stories of all this
43:13 great stuff. And we would always sit there and go, did Daniel actually get those assets and make this happen? Or was he gifted these assets? And he's just a good manager of people. And that was
43:27 always kind of the swing and misses for us would be we'd find some people that just literally couldn't turn on the coffee pot themselves. Because it's a different world when you leave Shell and you
43:39 have 25 assistants for everything you possibly need to. Hey, I'm going to go out there and raise seaweed. Yeah. I mean, the areas that I worked while I was at Shell were never tickly close to the
43:53 center. So I did a lot of different jobs at Shell that involved starting people on the checkbook, basically, and then build things from scratch. So it didn't, I mean, it still feels occasionally,
44:08 you think, it'd be nice to just be able to call up, like, the legal department and have 17 great people at your beck and call. Sure. Right. That's the bit that you forget about when you start a
44:20 startup and you realize that now you're calling a law firm who want money for it, and because you're a tiny little customer, you're not getting their best guy Right.
44:31 There's some frustrations around that. It is interesting you bring that up, because that is, if there was a lesson learned in that, it was usually a division manager, not someone in corporate
44:43 that had PL responsibility and the smaller number of people they were managing, usually the more entrepreneurial they were. Yeah. Yeah. Yeah. Took us a while to learn that. Yeah. A few mistakes
44:54 along the way. Yeah in
44:59 countries than it's also. Yeah, that's a good. It's also self-created, we're self-inflicted. You don't want any help from the center. Exactly. So the wife sees the thing on the telephone. Yeah,
45:12 so the wife went to this lecture and I stayed behind and took care of the kids and then she went with a good friend of hers,
45:21 a lowly lady scientist and they went for a few glasses of wine and so she was back very late. So I was a bit annoyed and she was making fun and all this scientist had been talking about planting like
45:34 9 of the world's seas with seaweed and then we'd save the world with that. So she was making fun of him. So I was defending him 'cause that's, you know, what we'll do is - Right, yeah, yeah.
45:42 Tested off the wife had fun, you didn't. I got to totally get out of his way. I was married for almost 25 years, I remember those days. Yeah, so we had a good laugh and then thought maybe we
45:53 should learn something about this rather than having a big argument about something neither as knew anything about. And so I read a couple of books on it just this amazing species in this whole world
46:06 that I had no idea existed, and this really wasn't with a sort of business entrepreneurial side, I was just auto-dedactically interested in this ecosystem that I knew nothing about, but then the
46:17 more I delved into it, the more I suddenly realized, here's a
46:21 source of biomass that's chock-a-block with amazing molecules. Technically, the production of seaweed hasn't really moved forward since 1600 when the Japanese started doing it. Like we've moved to
46:34 Yamaha outboards instead of rowing, but that's about it. Everything else is done exactly the same.
46:40 And as a consequence in terms of markets, there's never the volume, there's never the consistency of quality to be able to take some of these potentially extraordinarily interesting products and put
46:51 them in a space in a world where, you know, if you produce a hundred tons of something
46:56 seaweed a year, who cares? Cargill needs that every morning to be, start to be interested. And so the whole concept of scaling it and what you could do with that, then suddenly lit up a light in
47:06 my brain because you're then building a really big scalable industry.
47:12 Only at scale does it matter that it boosts biodiversity or draws down carbon 'cause who cares if you're doing that on a sort of 10 acre plot. And so the two things really molded and you suddenly saw
47:24 that you could create an industry of vast scale that also
47:31 did great things So what year did you guys start and give me two or three challenges in the starting that I probably wouldn't think of? Well, it was 2019 that I first had this idea. And so I was
47:45 finally set free by show on the 31st of December,
47:49 2019. Set up the company middle of January, did one scouting trip to Namibia and then came back and the world got shut away because of COVID So that was a challenge to put him mildly. Also, the
48:03 fact that I was locked into selling my shell shares just when the oil press was negative and they'd cut the dividend for the first time in, I don't know, 70 or 100 years, was also not great for my
48:16 little nest egg that was going to help me comfortably run my startup for a couple of years. So that sort of, I'd reckon I had about 18 months of living the life we were accustomed to before I should
48:27 feel stressed That rapidly became five months, and
48:33 people had told me, people with more experience, had said, You're only going to make, be successful at raising money once you run out of your own money. And that was totally true. It just
48:44 happened a lot faster than I had anticipated, which of course was very lucky with hindsight, because otherwise you would have wasted 18 months, and everything would have been delayed by 14 months
48:55 My story then was, you know, I get fired in April of 2020.
49:01 And two days later, after I sober up, I'm sitting there going, yeah, I should figure out pen and paper, exactly what's going on in my financial world. So everything on paper, if everything was
49:15 worth what it was supposedly worth, I was fine. Okay, I need to sell the plane. I can't fly around in the plane anymore. But all right, I'll do that. And then I went, well, what if these
49:27 canyanderson funds that I'm invested in are worth zero. And, you know, oil had just been minus 37. That was not, you know, and if they don't pay you out for 10 years anyway, maybe that's not a
49:41 bad assumption to have. So I looked at that and I was still kind of like, okay, the kids will go to college. I can pay for the weddings and everything. That'll be all right. Then I said, well,
49:53 'cause most of the time when you leave a private equity firm, whether you're fired or quitting or whatever. The firm always says, Let us buy you out of your LP interest. And you go through the
50:05 rigmarole, and you can't agree on valuation. Usually what it is is, well, you just don't have to make future capital commitments to these funds. Well, Cain wouldn't let me out of that. They
50:16 kept saying, Well, that's an LP issue. And I go, I guarantee you, I would not have beenthe largest LP in these funds, individual fees in these funds, if I wasn't the GP. But they wouldn't let
50:27 me out of that And so I was sitting there and I ran the math of, What if I have to invest every single dollarthey can call and all that's worth zero? And I calculated that I was worth82, 000 at
50:38 that point. And
50:40 I was like, Crap, that really sucks. So, you know, fortunately, Cain just didn't do a lot in the way of deals, you know, post me leaving. And eventually I was able to sell those and all came
50:52 back and they became more stuff and all But yeah, no, I feel you, I was, there was not a lot of entrepreneurial shit. going on in my mind at that point, I don't have any money. Yeah, that
51:03 focuses the brain. It really does. It really does. So that happened a few times. So I mean, then we raised a bit of cash, not big amounts. Then we're almost bankrupt again. I think when we
51:15 finally got our first big investor, we had70 left on the account. That's as close as it gets to. Having said, I love those stories in hindsight. Yeah, I think we realized that at the time And so
51:29 got an investor in
51:32 the, so what does the future hold? I mean, more fundraising to continue to grow. You guys in good shape now. What do you think you're doing? Back then, we were essentially going to investors
51:46 and saying, here's this concept that might seem elegant, but it's never been done before. It's in an environment that is notoriously, like the ocean will kill everything you love. and destroy
51:57 absolutely everything you put into it sooner or later. So that was a tool sell.
52:05 And so, and you still have to prove that it worked technically that the biology works, that the structure works, that you can process it, that you can make an end product that actually works, and
52:15 that you can then sell that. Give me, give me one thing that you learned through all that that I would go. Oh, crap, I never would have thought of that. There had to be one wild lesson learned
52:25 Um,
52:29 remember we were talking about harvesting, right? So rewind to 1916 and the allies are in a war with Germany again. I mean, we're going backwards in history, right? Um, and gunpowder was the
52:44 main thing that you needed. And gunpowder is made with potassium. You're looking at me like, where is he going with this? No, this is great. This has been fascinating So potassium at the time.
52:56 came pretty much exclusively from the salt mines in southern Germany, Salzburg. And basically what they did, they produced vast amounts of brine, NACL and KCL. The NACL became your table salt and
53:08 the KCL, they'd break down and sell the potassium. Mostly for fertilizer, but also for gunpowder, so the basis of smoke was cordite.
53:17 And so during the war, of course, the Germans stopped exporting that to their enemies. And the Allies had a major problem, which was that they were running out of gunpowder very rapidly. And
53:27 potassium is called potassium from potash. Potash is these big pots of steel in which, or iron, in which people would burn seaweed on the beach. And the ash potash was this super fertilizer before
53:42 people found guano and then before people developed ammonium nitrate. And so the Royal Navy, who was the procurer of potassium and gunpowder turned to the seaweed industry. basically some peasants
53:57 in Ramsey and in Britannia, collecting this stuff off the beach. And they, of course, couldn't produce enough potassium for this, so they put out a tender. And a company from the US called the
54:07 Hercules Powder Company picked up this tender and won it on the basis of mowing giant kelp off Shrew, California. And so within four months, they built four vessels. The first one was called the
54:18 Bacchus, after the God of Wine, 'cause you chop kelp up and they call it kelp liquor And they'd ferment it, and it was actually alcoholic. Have you ever had any? I haven't tried, if you ferment
54:31 kelp, it really stinks quite badly. Compared. But yeah, we used the kelp fluid, like a sort of skin oil, it went, it's great. We drank it, but fermented, I haven't tried it. The cash flow
54:47 is never in that low.
54:52 So they built these four wooden vessels
54:55 canopy of the kelp, we're chopping it into soup right there on the vessel and putting it into little shuttles that would go back to a place called Gunpowder Point, where they had the biggest tank
55:05 farm in the world. This is 1916. Not Baku oil fields, but kelp, Gunpowder Point, California, all built out of giant redwoods. And there they were doing this fermentation process to get the
55:18 potassium and then acetates for airplane paints, and I think about 40 or 42 different products for the war effort
55:27 And so that whole concept of speed of ingenuity triggered by need has always inspired me. This story of how quickly you design something that's never been done before, and it works. And every
55:40 single, pretty much every single shot fired from the end of 1916 until the Armistice giant kelp. No way That's fascinating. That's always my point. America does that stuff really well.
55:56 You know, it's kind of in the similar light that I always talk about, you know, when I talk to the British girlfriend, 'cause she'll sit there and talk about schools or horrible around here. And
56:05 I go, not the top, top 5. I mean, we go out, if there is a kid in America that is great at basketball, we get them to the NBA. If there's a kid out there that's really smart doing stuff, I
56:19 don't care where they are, we get them to MIT. We do that better than anyone else So we can handle the catastrophe and let's call it the super outsizing or whatever. We do that stuff really well.
56:33 They today, maybe not so much. But
56:38 so that's really cool. Well, how do people find out about y'all or do you want people finding out about you? No, no, we want people to find out about us. I mean, we've got the website. We have,
56:48 I think, a pretty extraordinarily open team in terms of. we look at.
57:53 you are operating an asset that has nature in it, are you making that better or are you degrading that? And then you talk about return on social capital, which isn't a sort of, it doesn't mean
58:05 socialism, it just means social capital is what you've got in your company and around you in terms of people, and are you making them better in skill sets, in reliability and loyalty,
58:17 or are you degrading them? And then return on financial capital is obviously the key one So those are the four sort of things that we look at. What's the website spell it out? 'Cause about 75 of
58:30 the people that will listen to this will hear it as opposed to watching it. Yeah, website is kelpblue,
58:37 so KLPblue the color. Nice. Annual, this was cool for you to come on. I enjoyed this, sorry you had to put up with me in my random questions right there. I like that. Anyway, we'll give a
58:49 shout out. to Matt Steele for a hundred days, I guess. Yes, thank you, Matt. It's hard to give Matt a shout out. So anytime we can, we should take that.
