The Energy Question Episode 42 – Antoine Halff, Founder and CEO of Kayrros

 

David Blackmon [00:00:09] Hello, Welcome to the Energy Question with David Blackmon. I’m your host, David Blackmon, and I don’t even know my own name today. That’s crazy. My special guest for this episode is Antoine Halff, who is the co-founder of a company called Kayrros which is creating some incredible or providing some incredible information, data services to various and energy businesses across the globe. Antoine, thank you so much for doing the show.

Antoine Halff [00:00:40] Thanks, David, for having me.

David Blackmon [00:00:42] Antoine, for those who are not familiar, is also a former chief analyst at the International Energy Agency and a former lead industry economist at the U.S. Energy Information Administration. So that’s quite a background in and maintenance and creation of energy-related data so I’m really honored to have Antoine as my guest today.

David Blackmon [00:01:06] Before we get into the interview about your company, Antoine, why don’t you take a few moments and tell us how Kayrros came about and the reasons why you went down the road of creating this company.

Antoine Halff [00:01:22] Well, we created chaos because we felt there was a need for more data and better data on the energy industry, the energy markets, and also on climate related issues that affected the energy grid. I was at the IEA at the time, as we said, that we had been at the EIA before, and I work with fantastic colleagues putting out the best institutional data out there that serve as a benchmark for the industry.

Antoine Halff [00:01:50] But I realized that there were many blind zones, blind spots in the data we were putting out that oftentimes we had to muddle to fill the gaps in in the surveys that we put out. And the president, of course, Antoine Holstein, was at the time at Schlumberger Business Consulting, a consultancy within Schlumberger, that he had created.

Antoine Halff [00:02:14] And he had the same perception coming from the users of the data. He had been working with industry, with people who had made billions of dollars of investment based on data that were outdated without not because of lack of ability from the institutional organizations, but just because the market was moving so fast.

Antoine Halff [00:02:36] You know, the growth happening very much out of the OECD. We had the most sophisticated statistical collection systems are located. So there was really a need that we felt there was also an opportunity because of the huge amount of information available just on the Internet, on the websites of various companies and countries, but also from new technologies like satellite imaging, geolocation data like social media posts.

Antoine Halff [00:03:07] And at the same time, the cost of computing, the capacity of computing was increasing the cost of data storage was was falling. The satellite imagery data were becoming commoditized. And, you know, more and more satellite being launched all the time at cost they were falling down.

Antoine Halff [00:03:24] So there was a huge opportunity, as we saw it, to tap into these vast resources and use artificial intelligence to translate the raw data from these sources into actionable signals that the energy industry could use either for operation purposes or for trading purposes or for even communications purposes about what they’re doing, for example, in the climate.

David Blackmon [00:03:48] Yeah. You know, I have a long background in the oil and gas business. It’s just been 25 years ago, just a quarter of a century ago, when a good friend of mine named Marilyn Gilmer founded a company that was then called Drilling Info that is now in Enverus  And, you know, just to just to the first effort to digitalize lease records and well drilling records in the state of Texas, which of course, was the the busiest part of the oil business in the United States for a long time.

David Blackmon [00:04:21]  You know, and now to see how it’s all evolved to an enterprise like yours is truly amazing. And it’s so important. I think everyone in the energy business, you know, will agree that that having access to the kind of real time information you’re talking about and your company is is producing now, it’s just vital to to the success of the business.

David Blackmon [00:04:48] I mean, one thing, just something simple that you’re doing here is, is is providing companies, drilling companies, upstream companies with information about the newest well pads that have been sighted, you know, in the general vicinity around a drilling location they’re about to drill. Talk about why that’s important to to an upstream a producing company.

Antoine Halff [00:05:10] Oh, sure. We monitor fracking. We monitor oilfield activity in the in the tidal basins at like gas basins in the U.S.. And there’s many different use cases for that. But one is, as you said, making companies aware of activities about to take place next door to them, to their wares is critical because when somebody starts fracking next to your facilities, this can create damage to you or to your well.

Antoine Halff [00:05:38] So in order to minimize damage, it’s very important for companies to have advance notice of that when when their neighbors are going to start drilling and fracking so that they can shut down their operations temporarily and then reopen and minimize the damage. It can save millions of dollars this way.

Antoine Halff [00:05:54] And we do this we we track this activity by following every lease in the U.S. with satellite imagery, but also with geo location data. So we the minute there’s a permit, we we monitor the location, we track the location, and we see every stage of development from the pad preparation to the to the drilling to the to the fracking and well completion. So that’s you know.

David Blackmon [00:06:21] One thing I’m curious about is what is your company’s method for obtaining the satellite information? Does it require like licensing with with satellite companies to to be able to to download their information in real time like this?

Antoine Halff [00:06:40] Well, the we provide information to companies in many different ways. I mean, it can be through API or through data download. We can send them data. The way we access that data ourselves. We made a decision at the very onset of our work not to invest in hardware, not to have our own satellites.

Antoine Halff [00:07:01] We work with more than ten different constellation of satellites today and they range in very much in terms of the kind of sensors they had, the kind of we visit, frequency they have. But our approach is to really focus on image processing. That’s our that’s a core value add. We’ve been working with scientific labs in France, and that’s where people have been experts in satellite imagery for the last 25, 30 years.

Antoine Halff [00:07:30] And we really developed a know how that’s that’s unique in terms of exploiting, well, imagery and combining imagery from different sources, different satellites, combining that, using that with our proprietary database of assets, for example, and extracting data from that. So we we don’t invest in in our own satellites that means our costs are very low.

Antoine Halff [00:07:54] We access preferentially public data, public satellite data from the European Space Agency, from NASA’s SO data that are free to acquire and that keeps our costs extremely low and makes our offering extremely cost competitive.

David Blackmon [00:08:11] That’s so interesting to me you know, another thing you’re able to do is not just provide real-time information to your clients, but also insights on what’s going to happen in the future. How does that part of your business work?

Antoine Halff [00:08:26] So you’re right that what we do has some some forecasting capacity. Typically, we don’t we don’t engage in forecasting in the traditional sense. We don’t do modeling and, you know, projections one year, ten years out, partly because we we feel very strongly that in today’s world, this is in increasingly difficult and sometimes misleading because the with the market and the industry and the climate itself are changing so quickly that you can’t really extrapolate from past datasets to have a good sense of what’s going to happen next.

Antoine Halff [00:09:00] There’s too much unpredictability in the market just from, you know, extreme weather events. The seasonality is changing, but the industry, the you know, the fuel mix is evolving rapidly. So completely unchartered territory.

Antoine Halff [00:09:13] And we feel strongly that in this space, sometimes the best we can do is what we call now casting, having real time information on what’s actually happening on the ground, not necessarily extrapolating from past past trends, but really having a clear, clear eyed, real time view of what’s actually taking place. But sometimes this view does give you a bit of a lead on what’s going to happen next.

Antoine Halff [00:09:47] For example, we monitor the crude storage inventories around the world worldwide, And the good sense on crude stocks typically under normal circumstances, gives you a lead of 1 to 2 weeks on whether the price change is going to be further out, you know, when we monitor. The facilities such as gas liquefaction plants in the US, for example, we see when they come down. But we also can see through during the look duplication data when the plants are about to start again.

Antoine Halff [00:10:25] So again, it’s it’s a bit of a lead time that can be very valuable for operators and traders. Another. Go ahead. Another example that comes to mind is in the in Texas, in particular in California. And that’s when the U.S. we we monitor now the development, the deployment of solar energy. When you facility a utility scale, solar facilities come on.

Antoine Halff [00:10:51] And we’ve been able to have a good sense of delays and bottlenecks in the in the pipeline of new new capacity and to to correct for the the ERCOT forecast I think to be extremely ambitious early in the year and then get downgraded dramatically as the year goes by and and facility and new capacity phase to shore up. So we have a good view of of what’s going to happen there.

Antoine Halff [00:11:17] You mentioned ERCOT. Do you also do or are you also engaged in some of the other regional grids around the United States.

Antoine Halff [00:11:25] So we’ve been focusing for this this work. We track solar capacity and battery storage, and we started really with ERCOT and also with California, because that’s where most of the activity takes place. But not we’ve expanded this coverage to the whole U.S. And next is going to be the rest of the world.

David Blackmon [00:11:44] So are you in other countries now or are you strictly in the U.S. right now?

Antoine Halff [00:11:50] We are global. So you always have a global reach. We are global. We our headquarters in France, in Paris. And we tap into the pipeline of data scientists that comes out of the French educational system. But we have offices in Houston, in New York, in London, in Singapore. And we have also an office in Bangalore, in India.

Antoine Halff [00:12:13] We’re going to we’re going to expand this network over the next couple of years. But we’re very global. But a lot of our business is in the U.S. because the U.S. is the most dynamic energy industry in the world. That’s where there’s the most appetite for innovation, the most willingness to to to onboard new technologies.

David Blackmon [00:12:33] So, yeah, you talk about the new technologies. I’ve talked to so many business leaders in the startup businesses now that are being spurred on by the incentives in the Inflation Reduction Act. You know, and everybody, you know, tried to take advantage of those incentives and subsidies.

David Blackmon [00:12:54] And I’m assuming that’s going to probably mean and I’m sure you’re anticipating that that’s going to be I mean, really kind of a big array of new business opportunities for an information provider like Kairos.

Antoine Halff [00:13:10] Yeah, I hope you’re right. I mean, it’s surely started the kind of feeding frenzy out there. But there’s huge potential. The area that we’re particularly excited about ourselves is. Is in methane. Methane abatement. We’ve developed a platform to track methane emissions, super emitters globally and with a very high frequency.

Antoine Halff [00:13:33] And there’s a lot of emphasis in the Information Reduction Act on the methane abatement. We’ve been working with government agencies as well as U.N., the International Methane Emissions Observatory, And we’re really looking forward to helping the industry dramatically reduce its methane footprint and in so doing, make what we think is the biggest contribution that can be done to climate action.

Antoine Halff [00:14:03] You can achieve more by removing, you know, super emitters and big methane emissions from the industry in terms of reducing the climate footprint that can be achieved by any other means in a very short period of time. You can, you know, do more to to to reduce a footprint by taking cheaper emitters out than by. And it would take it would take decades to to to to convert the automobile fleet to electric vehicles to get the same result. Right.

David Blackmon [00:14:28] Right. Yeah. Yeah and I wonder too and, and I’m not sure what the answer is, but where methane is concerned with the satellite data you’re able to access, can you help companies, you know, identify those super emitters sites where the big emissions are taking place?

Antoine Halff [00:14:48] Yeah, Yeah, we can. And we have a platform which I think is the best equipped to do this today. We we use various satellites, different fleets, particularly Saturn. They have five of the Copernicus Constellation at the European Space Agency, but also since then sent, you know, to NASA, Landsat eight and others. And we we have a very good view on super emitters.

Antoine Halff [00:15:16] Now I’m talking about big events, not small leaks, you know, not leaking not not tiny leaks from but big events and events are the top priority of regulators. They are the low hanging fruit for climate action.

Antoine Halff [00:15:32] That’s exactly what I think EP is going to be grow after that’s what the annual in the U.N. in Europe is going after with the Mars, the methane alert and response system that we helping them design and put in place. So there’s there’s a huge opportunity there.

David Blackmon [00:15:52] Yeah. And by bringing you to look at what’s been happening in that space where ESG is concerned and companies, you know, really trying to to reduce their methane emissions, you’ve had this kind of cottage industry of ESG rating services kind of pop up over the last couple of years that, you know, help certify producers of natural gas, help certify their gas is responsibly produced.

David Blackmon [00:16:21] Is there an opportunity for Kairos to work cooperatively with those kinds of ratings companies that are Kanareas, one of them project Kanareas one of them I know. Is there an opportunity for you guys to provide services to them as well?

Antoine Halff [00:16:38] Absolutely. Yeah. I think, you know, the kind of so when it comes to methane detection, there’s many different technologies you mentioned now there’s others, there’s, you know, ground sensors there, airplanes, drones, testing satellites, monitoring satellites. They all have some kind of advantages and disadvantages.

Antoine Halff [00:16:58] But we think that the kind of monitoring we provide with monitoring satellites is a key is a foundational component of any kind of reporting system, because we we’re unique in our capacity to capture intermittent emissions. You know, the big emission of the super emitters are intermittent they typically don’t last very long, sometimes not more than a few hours, but in the few hours they can do a lot of damage.

Antoine Halff [00:17:24] So the ability to track almost continuously what’s going on on the field is very important to to capture those images, which sometimes are due to pipeline maintenance, sometimes they’re due to equipment that that fails. Various reasons, but it’s very important to capture that. And you can’t really capture it with any other technologies.

Antoine Halff [00:17:47] You can do it with testing satellites because you only can test them at given times you can’t do aerial surveys all day long and the 365 days a year ground sensors might not be you might not have GW1 sensors in the right place and they might not be able to measure what you wear to emit is very difficult to measure methane emissions from the ground it’s much easier from satellites.

Antoine Halff [00:18:09] So this is a key building block of any kind of monitoring system. And we are indeed talking with various groups that are looking at certifying or certifying emissions. And it’s important, I think, to include our contributions so that there’s trust in these measurements.

Antoine Halff [00:18:27] There’s been recently some reports that maybe should be certified. The energy was not so clean, as clean as it purports to be and so on. It’s very important that any certification be really robust, sound, science-based and totally beyond any kind of doubt and suspicion.

David Blackmon [00:18:47] So I wonder about you know, and I have been following carbon capture very closely the progress of carbon capture growth in the United States. I wonder if your technology has an application to what I think is going to become a really kind of exploding industry here in the coming years where, you know, what about a carbon capture project? I assume you’ve got applications that would apply pretty well to that as well.

Antoine Halff [00:19:20] So the blessing and the curse of the technology is you can apply it to many different areas and you can definitely follow carbon capture projects. Right now we have an embarrassment of riches, so we’re trying to limit the scope of what we do so as not to disperse due to schedules, as we need to be focused on on the most relevant project today.

Antoine Halff [00:19:46] I think the time when we’re going to monitor carbon capture projects is going to be very soon. Right now in the carbon capture space, what we do really is monitoring forestry, vegetation, assets, carbon offset projects.

Antoine Halff [00:20:03] So nature based solutions, not really direct air capture through facilities, but nature based solutions. We we have developed the technology that monitors forests and we very sophisticated.

Antoine Halff [00:20:18] We keep track of afforestation deforestation for degradation we can measure the height of the canopy of forests, the density of foliage diversities pieces and the amount of carbon embedded in forestry assets.

Antoine Halff [00:20:32] Again, very important to build trust in carbon offsets there’s been some reports, devastating reports about, you know, offsets that are based on questionable measurements and facts. But the technology is there to remotely, efficiently, cost, efficiently monitor the development of carbon offset projects.

Antoine Halff [00:20:57] And that’s key to to building trust in them and to helping developers extract the value that they deserve from it to help to to to help also host countries extract the value that they can from their from their forestry assets.

David Blackmon [00:21:11] Well, given your background with both the IEA and the EIA, another question that pops into my head here is there an opportunity for Kairos to partner in any way with those kinds of of government kinds of entities? Although I guess the IAEA really is not technically a government entity.

David Blackmon [00:21:33] And it seems more likely to me that there might be an opportunity and maybe you’re already doing it to to also provide data and information to to an international organization that’s kind of independently funded by a group of subscribing countries like the International Energy Agency. Is there an opportunity for that to happen?

Antoine Halff [00:21:56] You’re absolutely right. Yeah, totally the my colleagues, my former colleagues at IAEA, very savvy and very alert and catching on. And we are working with them. So we are working with them on methane. We providing them with data on the crude inventories. We’re working on other on other areas as well.

Antoine Halff [00:22:18] As I mentioned before, we we work with the International Methane Emissions Observatory, which is an agency of the of United the United Nations Environmental Environment Program. We’re working with other governments. We’re working with the US government agencies as well.

Antoine Halff [00:22:34] This I think the the future of data is is going to evolve and agencies like IAEA and IAEA had a really key played a really key role after they were created in the 1970s in providing transparency to the market, to a market that was quite opaque at the time.

Antoine Halff [00:22:51] But the world is evolving the geospatial revolution has really far reaching implications and opens roads that we are only beginning to explore. And I think it’s in the future you’re going to see government agencies work collaboratively with private sector geospatial companies such as us. There’s a new model that’s being set today of new public collaboration on data issues.

David Blackmon [00:23:21] So I was talking to a class at a local university here near my home at East Texas Christian University yesterday about what’s happening in the energy space with an emphasis on why it’s so important to get China and India both more engaged in carbon reduction. If you’re really going to be able to have a real energy transition which is the aspiration really by the Western governments more than anybody else right now.

David Blackmon [00:23:52] I wonder if their if you’re your company is making any inroads in either one of those countries with this kind of, you know, high-quality data that could really help them begin to reduce their own carbon emissions there that are you know, they’re the biggest emitters on Earth in addition to the United States. And so it’s so, so critical, I think, to have them more engaged in that effort. Are you working with anyone in China yet, for example, or making inroads there?

Antoine Halff [00:24:32] So you’re absolutely right that we can’t solve the climate crisis without working with countries that are large emitters like China and India. We are studying we will be working with them in some areas. In other sectors, it’s still slow going. It’s still early days.

Antoine Halff [00:24:53] But I think these countries are clearly on board with the notion that they have to they have to reduce their footprint. They also are dependent, you know, in the case of China, in particular on on coal, for example, which is a high carbon source of energy. But there’s been you opening a whole nother can of worms by a very large topic we could go on for.

David Blackmon [00:25:18] I know it’s a long.

Antoine Halff [00:25:19] Time to discuss this, but the, you know, the discussions on climate. Have their ups and downs with objects like China and India. But there’s things are moving, things are moving, and the potential for abatement in China and in India is huge. And for example, in China, we’ve made huge inroads in our capacity to detect methane coming out of coal mines.

Antoine Halff [00:25:46] And this was very challenging at first in the in the, you know, first couple of years when we developed that technology, we had we could measure carbon emissions at the basic level. It’s from Shaanxi Province, for example, or from the Bowen Basin in in Australia or from the Rockies or Appalachia in the U.S.

Antoine Halff [00:26:05] But we have trouble identifying precisely what mine the methane plumes were coming from and so on. In the last year or so we’ve made major breakthroughs in in image processing capacity and we’re now able in part with the help of new satellites that have been recently launched, to identify precisely where the emissions come from, which mine even which unit in a given mine, which elevator, which particular processing area that a mine emissions might be coming from.

Antoine Halff [00:26:41] So in China this has huge potential because China has the biggest coal industry in the world. The potential for U.S. for capturing methane from these mines is very large. And this would be a win win for for China because it would reduce the footprint, but also make more energy available to the domestic market in the form of natural gas, in the form of methane. So great potential to.

David Blackmon [00:27:06] Well, we are. This has been a fascinating discussion I wish we had all day, frankly, but we’re up against time. I really appreciate you taking the time to do the show. For folks who want to find out more about your company, I know the website address is www.Kayrros.com and Kayrros Kayrros.com and anywhere else they could they can go to fire up I’m sure you have social media presence as well correct.

Antoine Halff [00:27:39] We do and we we you know we have our contacts on our website. Very happy to take emails and calls and and we get back to people. So thanks. Thanks very much. We really appreciate the opportunity to to talk about what we do. And I wish we had more time to to go in greater length about it.

David Blackmon [00:27:59] Well, maybe we can do this again here in a few months. And when there’s an event you want to talk about and just do a follow up, I like to always extend that invitation to to the guests that are really interesting, like you. So we’ll stay in touch with with Bridget and and see if there’s an opportunity to do another one here later in the year.

Antoine Halff [00:28:21] I look forward to it.

David Blackmon [00:28:22] Okay. Thank you very much and thanks to Stuart Turley and the Sandstone Group who produces our show, and to our star producer, Eric Parel. This is David Blackmon signing off for now.

 

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