September 11 left a lasting impression on Stephen Beaton, and like many others of his generation, he joined the military.
But at the U.S. Air Force academy, his journey took a bit of a turn. There, his chemistry studies deepened his interest in liquid fuels. “As a product of September 11, seeing the spike in oil prices, I always thought, ‘how could we replace fossil fuels?’ I thought that it was important for national security.”
Beaton’s passion took him to Oxford for a PhD then back to the U.S. where he had a string of posts with the U.S. Air Force, including leading research projects, monitoring the quality of the branch’s fossil fuels, and overseeing R&D investments in energy.
After leaving the military, Beaton wanted to found a company focused on, you guessed it, creating liquid fuels. “I’ve always been obsessed with fuels.” But there was one problem: “Fuel is a terrible first product,” he said.
“Fuel is a commodity. It’s very cheap. The fossil fuel industry has had 150 years to really optimize for scale and cost,” Beaton added. “Your first product should be one that is like a high-margin luxury product — the Tesla Roadster approach. But ideally, it can’t be too far off of the path to making the fuel.”
Beaton says his startup, Circularity Fuels, has found that market: lab-grown diamonds. Diamonds are pure carbon, and the chemical process used to make them requires methane that’s almost entirely free of impurities.
“That methane typically sells anywhere from 100 to 300 times the price of natural gas,” he said, which is between $40,000 and $80,000 a ton.
Circularity makes methane by combining hydrogen with carbon from CO2. That idea isn’t novel, but the way the company goes about it is. Plenty of companies are attempting to transform captured carbon dioxide back into fuel, but the process is often too expensive to challenge fossil fuels on price. Beaton admits that Circularity can’t compete with most fossil fuels today, but if the company can scale its unique reactor, he thinks it has a chance in the near future.
The startup’s secret is a special catalyst that’s more selective, meaning it makes more of the target molecule, methane, and less of the unwanted stuff. And the special reactor it designed can capture carbon and make methane without needing separate vessels. The reactor can heat up quickly so the catalyst hits its peak efficiency faster, and it reuses waste heat from the reaction that creates methane to power the carbon capture equipment.
Altogether, Circularity’s process uses 40% less energy than competing CO2-to-fuel pathways, Beaton said.
Because the catalyst is so selective, Circularity can make 99.9999% pure methane at pilot scale cheaper than from fossil fuels, he said. “Even at the current hydrogen prices of $5,000 to $7,000 a ton, we’re profitable,” he said.
“We envision taking those same concepts and scaling them up for methane, natural gas, synthetic natural gas, as well as other products,” Beaton said. The company wants to drive the price of e-fuels down to the point where they can steal market share from fossil fuels.
The reactor is designed to be modular, allowing methane and e-fuel to be made wherever it’s needed, saving on transportation costs and cutting greenhouse gas emissions from leaky infrastructure. That’s part of what drove the DCVCs investment, partner Zack Bogue told TechCrunch. “The current way of extracting and transporting natural gas is so leaky that we’re actually better off burning coal,” he said.
Circularity was recently announced as an ARPA-E awardee, and the company is currently going through final contract negotiations. The company was incubated at DCVC, where Beaton is an entrepreneur-in-residence, and the firm provided pre-seed funding. Between ARPA-E and grants from the California Energy Commission, the National Science Foundation, and Stanford TomKat Center for Sustainable Energy, the company has received $4.9 million in grants and awards.
