00:00 Dan Sutton
Even minimal supply shocks create huge uh crack spread changes and big cost impacts in the diesel market for marine shipping, fisheries, road transport, and also gasoline, which is a $2.2 trillion dollar a year market.
00:23 Steve
All right, welcome back inside our Proactive Newsroom and joining me now is Dan Sutton. He is the CEO of Synthaline Energy Corp. and Dan, it’s good to see you. How are you?
00:36 Dan Sutton
Doing very well, Steve. Thanks so much for your time today.
00:39 Steve
Yeah, good to have you along. excited to learn about what’s been going on with the company. It’s been a a little while since I’ve I’ve had a chance to talk to you. So for those not familiar, tell me a bit about the company.
00:53 Dan Sutton
Syntholine is in the business of producing synthetic jet fuel. For all of you that use synthetic motor oil in your car, this is not dissimilar. It’s higher purity, higher quality. We use captured carbon and as a result, we approach carbon neutrality. And this synthetic fuel has actually been around a really long time. Syntholine just has a new way of making it at exceptionally lower cost.
01:13 Dan Sutton
So our whole business is premium commodity specialty jet fuel but produced in a way that allows us to undercut our competitors substantially and quite meaningfully.
01:21 Steve
Yeah, how are you able to do that, Dan?
01:23 Dan Sutton
In the process of making synthetic hydrocarbon fuel, you need to make both hydrogen and then synthesize it with carbon. Hydrogen is the hydro in hydrocarbon, the fuels that run our society today to the tune of about 105 million barrels a day. And when we make them out of fossil fuel, we refine them down from crude oil. But synthetic fuel goes the opposite way.
01:50 Dan Sutton
We crack hydrogen from water through a process called electrolysis. This is really where Syntholine’s IP lives and allows us to approach these massive new efficiencies. And then we synthesize it with carbon to make a designer molecule, just the specific molecule, the chain lengths of hydrocarbons that we want. And once again, this process has been around for about 100 years. It’s just never been both economic and clean. And that’s what Syntholine exists to deliver.
02:08 Steve
I I was when I was researching for this interview, I I noted that you had a uh a just announced an independent technical review of what you do. And and I thought it was very significant in some of the findings within that. It really sort of, um, I guess, uh, supported what you have to say and what you’re talking about and why the company’s really happening.
02:30 Dan Sutton
Absolutely. And so Syntholine proved our process out in the lab, uh going back into the early 2020s, but we’ve never actually operated a demonstration facility in the field adjacent to a real world energy asset. and that’s what we set out to do this year. We actually built this demonstration facility in Northern Iceland from permit acquisition to first production in 69 days. So this is a testament to what Syntholine can do when we really set our mind to it.
03:01 Dan Sutton
Complex construction projects and project development is the core basis for our team. But that facility performed exceptionally well. We believe it’s about sort of the top two or three electrolyzers in the world in terms of field tested performance and it really does demonstrate our capability to deliver a structural cost advantage in our ability to produce hydrogen and synthetic fuels.
03:37 Dan Sutton
You have to use our tech, you have to use it in a special place, you have to use it co-located with heat and electricity. And so all of these factors converge on Syntholine’s ability to uniquely demonstrate lower cost production of hydrogen and synthetic fuels.
03:52 Dan Sutton
Dan, are you are you when you’re looking at potential people to use this, are you looking at airlines themselves? Are you looking at the manufacturers of the fuel for airlines? Is it airports? Is it a combination? who do you sort of go after as a customer?
04:09 Dan Sutton
Our first beach heads for customers are definitely airlines and airline groups. They’re compelled by European Union, UK and various Asian nations to reduce the emissions impact of their fuel over the course of the next 20 years. And fuels like ours really are the best way to be able to do this, meet their compliance standard and increasingly reduce the negative externalities associated with their fuel use.
04:47 Dan Sutton
We also talk to oil and gas companies, fuel distribution companies and traders. and aviation is our favorite first market because ultimately it’s very difficult to reduce the emissions profile and enhance the efficiencies of these very specialty jet fuels. You can’t exactly put a catalytic converter on the back of a jet turbine, but synthetic fuel really can emulate the properties and reproduce all different kinds of of liquid hydrocarbon fuels.
05:22 Dan Sutton
From diesel, which we’re seeing right now, even minimal supply shocks create huge uh crack spread changes and big cost impacts in the diesel market for marine shipping, fisheries, road transport, and also gasoline, which is a 2.2 trillion dollar a year market, despite the electrification of vehicles. We’re going to be using gasoline a lot and a long time into the future. So aviation fuel and airlines are our favorite first customers, but we believe that all different kinds of liquid liquid fuels can be synthesized more effectively with less externalities well within our lifetime. And if Syntholine gets it right, feasibly within the next 10 years.
05:41 Steve
All right. Let’s talk about uh what’s ahead in the next six months to a year. What what are sort of some of the things that that that you’re working on that you’d like to see push forward?
05:54 Dan Sutton
So once again, our demonstration facility proved the performance of our high efficiency, low cost production system. This means that we now have empirical evidence for this low-cost production mechanism, which allows us to ultimately undercut any peers we have in market that we’re aware of today. So, we want to take this and share that value with our customers. When we go and talk to airlines, fuel suppliers, oil and gas companies, our ability to share that structural cost advantage
06:40 Dan Sutton
substantially advantages us in the negotiations for long-term offtake agreements. That is what we’re in the business of delivering over the next 6 to 12 months. We’re in these discussions and negotiations now. And the great thing about selling synthetic fuel into these compliance markets is we can ultimately forward sell all of the fuel that we produce well before we put a shovel in the ground. That gives revenue transparency and margin transparency to our investors and project finance partners.
07:18 Dan Sutton
And so delivering an offtake agreement or two or three for long-term take or pay terms that give us the transparency we need to move forward aggressively. That’s probably my main focus. We’ve also had quite a lot of interest from industrial strategic partners. Uh groups that want to participate in project equity, they want to help build infrastructure, they want to help Syntholine go from great technology proof and evidence structural cost advantage to large scale industrial production with a uh a low cost production potential.
07:54 Dan Sutton
And so those things are the things that I think about the most and they will contribute to us making further announcements and providing further clarity on our first commercial production footprints and how we scale from there.
08:14 Steve
All right, makes a lot of sense. Dan, thanks so much. Great to catch up with you again. Congratulations on the success so far and we look forward to our next conversation, okay?
08:24 Dan Sutton
Thanks so much Steve, great to talk to you.
08:25 Steve
Yeah, good to talk to you as well. There’s Dan Sutton, the CEO of Syntholine Energy Group.