Making Hydrocarbon Fuels from Nuclear Energy with Valar Atomics’ Isaiah Taylor

Why hasn’t this approach of using nuclear reactors to produce carbon-neutral hydrocarbon fuels been done before and why is now the right time?

It took me about six years of thinking, nights, and weekends of research, to arrive at this conclusion. It’s very counterintuitive and challenges a lot of assumptions. You have to believe in a unique set of things to pursue this as a business. 

First, you have to believe that hydrocarbons are a great carrier of energy – the best way for humanity to move power around the world. They are truly the best means of transporting energy itself, not just a product we extract from the ground.

Secondly, you have to conclude that nuclear energy could be much cheaper than it currently is. Some people have reached this conclusion, but I don’t think anyone fully understands how much cheaper nuclear energy could be or why it has become so expensive. It took me years of research, reading, writing spreadsheets, and tedious work to gain certainty about the genuine potential for low-cost energy from nuclear reactors and what is causing the high expenses.

Then you have to couple these two viewpoints—that nuclear energy can be significantly cheaper if built differently with hydrocarbons as the main product and that hydrocarbons are the ideal way to transport energy globally—together. Both are contrarian viewpoints, not often held by the same person, but we have combined these interesting core beliefs at Valar.

Can you explain the type of reactor design you are using for this approach and how it differs from other reactor designs?

They will look quite similar to other reactors that have been built in the past. We’re building a high-temperature gas-cooled reactor. The Chicago Pile-2 was a gas-cooled graphite-moderated reactor, and the first reactors that started producing power were gas-cooled. So this is sort of the OG reactor architecture.

The industry has since moved on to light water cooled reactors and there are a lot of upsides and downsides to that approach. In general, I think the downsides have overtaken the upsides for various reasons. That’s why we’re reaching further back into the past for this architecture.

The nice thing about our reactor is that it has built-in safety features and can reach higher temperatures, which means high efficiency. The downside is that it’s slightly less power-dense than light water reactors, meaning your machine per unit of power ends up being larger, which adds to theoretical costs. On the other hand, I think it reduces practical costs. People like pursuing these extremely high power density reactor concepts because it makes the construction cost look lower on paper. However, there’s a difference between theoretical construction costs, which are chemistry and materials, and practical construction costs, which are whether you can actually build it safely and efficiently. 

Gas-cooled reactors and synthetic fuels have been around for decades. Is Valar’s innovation primarily around manufacturing and revenue model? 

We’re not doing anything here that hasn’t been done before, but we’re tying together systems that have never been combined. Our society makes synthetic fuels, produces hydrogen from water, and has nuclear reactors. But no one has integrated all three of those into a scalable supply chain that is self-operated.

The most important thing about Valar is that we operate our own systems. We’re a jet fuel company and an oil and gas company. When we sell our oil and gas, we’re selling a product that we produce through our own technology stack. Think of it as a refinery, but one that doesn’t need to buy oil. We have a fundamental cost advantage in the oil and gas market because we make our own nuclear reactors and only need to purchase water, which costs less than purchasing crude oil.

Nobody is tying all those machines together, manufacturing them on a production line, and then operating them. That’s our advantage here. Is it going to be hard? It’s going to be unbelievably difficult. I would say this is probably the most exciting engineering challenge of any company in the world today.

We are building three extremely difficult technical systems. Nuclear reactors are hard, but we’re designing one and building it from scratch. We’re creating supply chains where they don’t exist for the parts we need. We’re building a lot in-house vertically. We’re building a hydrogen generation system using thermal heat, which very few people in the world know how to do. Luckily, we’ve hired a team that knows how to do it and is one of the only teams that has ever done it before.

On the hydrocarbon production side, this is somewhat novel, happening in just the last 10-20 years or so. It’s going to be incredibly hard, but it’s also going to be incredibly exciting. If we’re able to crack it, we’ve cracked a multi-trillion-dollar market.

What’s the case for making more hydrocarbons rather than just figuring out how to make it cheaper to generate electricity with nuclear?

Hydrocarbons are completely misunderstood in our society, and we radically underestimate the impact they have had on humanity. We would not be where we are today without hydrocarbons in almost every aspect of life. No matter where you look, you will see hydrocarbons all around you – the whiteboard, the mat for my mouse, the materials surrounding us are made of hydrocarbons. The paint on the walls contain hydrocarbons. Our entire modern world is made of hydrocarbons.

Beyond just physical materials, energy itself is a secret thing underlying all human society, and we often overlook its importance. It’s the only way we move around the world. Every time you get in your car and go to work, visit a friend, or go to a coffee shop, you are consuming something finite in the universe – the time of human beings, whose lives contribute to the production of energy and entropy.

In many ways, the availability of energy is one of the primary limiting factors for mankind. Hydrocarbons have been the only way we have done this at scale as a species for the last 200 years. Before oil and gas, it was coal, and before that, other hydrocarbon fuels like peat. It’s almost ridiculous to consider a world without hydrocarbons, at least until this point.

Should we move away from hydrocarbons? You can make that argument, but to start the conversation, we must acknowledge that modern civilization exists in large part thanks to hydrocarbons. It simply would not have happened without abundant and available hydrocarbons. I am very grateful to the oil and gas industry over the last few hundred years, as it is hard to think of another industry that has had a greater positive impact on mankind.

That said, where are we now? Are we ready to move away from hydrocarbons? I would still say no, we’re nowhere near ready, nor should we be, because hydrocarbons are still the best way we know to move energy around the world. Not many people understand this, but energy does not move around the world via electricity; it moves via hydrocarbons. If you want to move energy between two nations or states, it’s much more likely that it’s moving through a pipeline with oil and gas than through an electrical cable. The reason for this is that it’s much more expensive to create electrical infrastructure than hydrocarbon infrastructure. If you want to move a lot of energy, a ship is the only way we have as a society to do that. We don’t have electrical cables stretching across oceans, and if we did, it would be massively expensive and difficult to maintain. On the other hand, hydrocarbons carry so much energy for their size, making them incredibly easy to move around the world.

Eventually, I do think we will change where these hydrocarbons come from. I think in the future they will no longer come out of the ground. Instead, we will treat them as a renewable way to move energy around and as a mobile fuel for aircraft, diesel trucks, and the like. It’s a contrarian viewpoint on hydrocarbons – I don’t think we stop using them, but I think we change where they come from. I think they will come from the air, the atmosphere, as a cyclic vehicle for producing and consuming hydrocarbons.

Is the end state of Valar a closed-loop system?

Absolutely. Frankly, the only long-term plan that actually works for Valar is to pull carbon dioxide out of the atmosphere. In the short term, we can get CO2 from various places, but if we want to produce a vast majority of fuels on Earth—which we do—we’re going to have to pull it out of the air. That’s the only sustainable way to get carbon at a massive scale. It’s a total cycle because the outputs of burning a hydrocarbon are CO2 and water. Those are the same two inputs we use to produce a hydrocarbon.

You can think of Valar Atomics as reversing combustion. You put gas in your car, and it combusts with oxygen in the atmosphere, giving you heat and energy. We take those outputs and rewind combustion, reversing it back into the hydrocarbon. We release the oxygen back into the atmosphere and then resell the hydrocarbon to be used in combustion again.

So your proposal is essentially to turn what are now seen as non-renewable energy resources into renewable resources?

Yes, it’s highly counterintuitive. You have to see hydrocarbons not as a fixed resource underground, but rather as a medium for transporting energy that you can create in one place and use in another. When you use it, it goes back into the atmosphere, and you can create it again—it’s a cycle. People just don’t imagine hydrocarbons behaving that way.

You have to believe that the missing piece is just energy content. And then you have to believe that this energy content can come cheaply from nuclear reactors. You have to believe nuclear reactors can be cheap if you couple these systems because of the way the sites work and how we build them. You have to believe that we can make it very affordable.

I think you’ll see people gravitating in this direction in the next few years. But nobody in the world has as much conviction about this as I do and is willing to move as fast as I am to pursue it. I believe that Valar Atomics will be uncontested.

How does the world look different if Valar is successful?

Energy would be a lot cheaper. I think that an energy-rich society is a much more beautiful society, as things that are optimized for energy costs are not optimized for beauty and for things that humans care about.

We kind of saw that since the 1970s in the US with the oil crisis, which slowly evolved into a general energy cost crisis. The price of energy was dropping up until 1970 and has stagnated since then. At the same time, I think we’ve seen a lot of our civil life become less beautiful. For example, cars have become more of a function of energy cost and consumption, which has informed their shape and properties. I believe today’s cars are far less beautiful than their predecessors because back then we weren’t thinking as much about fuel consumption and energy consumption.

I think we will make it easier for mankind to move around the world. You’d be able to get from New York to California for around $100 because the jet fuel from our reactors is so cheap. I also think space exploration will be massively enabled. SpaceX is continuing to produce rockets that burn hydrocarbon fuels to take us not only around the world but to the moon and Mars. We’ve found a way to make the fuel for that process extremely cheap. This makes life on Mars and other planets much more feasible because we figured out a way to generate fuels wherever we have access to CO2 and water, which is most places, as long as we have our Valar reactors with us.