Dan Whaley, CEO of Climos

Sustainable Industries caught up with Dan Whaley, CEO of ocean iron fertilization (OIF) startup Climos, at the company’s San Francisco headquarters, in late April, shortly after the company closed a $3.5 million Series A funding round that included investments from Braemar Energy Ventures and Silicon Valley investor Elon Musk.

However, no sooner had we walked away from the company’s SoMa offices than Climos decided it was ready for seconds. In May, the company announced its aim to close an $8 to $10 million Series B round by first quarter 2009. It has been widely reported that the recent UN Convention on Biological Diversity, which put the brakes on ocean iron fertilization projects, could present an obstacle for Climos in its current fundraising. However, the recommendations adopted by the UN (see sidebar) have been in place since November 2007, and Climos has long professed its support for developing scientific consensus.

Unlike the company’s former competitor, Planktos, which closed up shop earlier this year, Climos has expressed no hurry in getting its proposed climate change solution to market; both its recent round of funding and its current search for capital are aimed at scientific assessment and evaluation. And, more than most, Whaley seems keenly aware of the role public opinion will play in making or breaking his company’s success. “It’s about science first, but it’s also about perception, and people have to really trust that you’re trying to do this in the right way,” he notes. “Part of how they think about science has to do with how they feel about the way you’re going about things.”

Whaley himself has a near-perfect background for promoting the company’s image: a dotcom success—with a lucrative exit in 2000—and oceanography in his genes. Dr. Margaret Leinen, Climos’ chief science officer, was formerly the assistant Director for Geosciences at the National Science Foundation, and, as Whaley puts it, “She also happens to be my mother. “I basically grew up in oceanography,” he says. “All the key people we need to talk to, I grew up with. I worked in labs when I was 12 and 13; I’ve been on two research crews when I was younger. It’s something I feel like I’m finally able to use and do something with that’s potentially meaningful.”

SI: Can you tell us a bit about how and why Climos started?

DW: Climos was founded to look at research around the concept of ocean iron fertilization. Our thinking is that climate change goes above and beyond reducing emissions. We need to look at everything in parallel—reduce emissions and find new technologies at the same time. It’s not a silver bullet, but it’s something that can be done as part of the full suite of actions we need to take.

SI: What’s the private company side of the story? How does Climos make money in this? Are you planning to sell offsets?

DW: The market is there to help fund solutions— and the currency now is the carbon offset. First, we want to see if we can take carbon off the table; second, we want to learn more about the ocean; and third, we want to further the development of measurement and monitoring systems to be more accurate about how this works, what the impacts are.

And we want partners that are there for the long-term: Corporations or large organizations, maybe in ocean-related industries or with strong engineering or biologic specialties, that can really help participate with us rather than just trade carbon.

I don’t see it as a commodity business. Climos is a science-focused company trying to answer a fairly large question. If the answer comes in increments of carbon credits, OK. But I think that’s worrisome.

SI: So where are you at now as a company in the process of answering that “fairly large question”?

DW: We just closed a round of venture funding led by Braemer [Energy Ventures]. Those funds are going toward operational costs, and sustaining the ground we’ve gained. We needed to take care of two or three important things, the first of which was an environmental impact assessment (EIA). We wanted to take an objective look at the background behind this, the rationale, what’s been done, what are the questions and concerns. The EIA covered a lot of bases: Does it work? How effective is it? How do you measure that? What else is produced when biological material decomposes? All those things.

SI: In your EIA summary, you mention leakage. Can you explain more about that?

DW: Leakage—in carbon market terms—means, if you do something in one place does it have an impact in another place where you’re not looking? We discovered that 3 percent of the total benefit is netted out by nitrous oxide and methane emissions created by the project.

We detect, measure around the project area at depth in a multitude of locations before during and after the project, as well as within project location. That allows us to take a 3-D view of the presence of those gases. We remove the background level that exists and end up with an increased presence of those gases.

SI: What about ocean acidification?

DW: Ocean acidification is the phenomenon of CO2 from all fossil fuels emissions diffusing into the surface of the ocean. Dissolved CO2 is slightly acidic, so it does make the ocean more acidic.

Basically, phytoplankton grow on the surface, breathe in CO2 from that surface water, then die, and sink to the bottom of the ocean. Carbon is naturally moved by this process to the deep ocean. Ocean iron fertilization accelerates that. When a phytoplankton bloom happens, it temporarily lowers ocean acidity, which is a net benefit. Eventually however, more CO2 comes in from the atmosphere to replace it, so any benefit for acidity only lasts so long.

Of course, this transport of carbon to the deep ocean causes a slight increase in acidity in deep water. The important thing here is, 90 percent of the carbon on the planet is in the deep ocean already so the existing reservoir  is very large. If you moved all of the carbon humans had added to the atmosphere over the last hundred years to the deep ocean now, you’d increase the carbon down there by about 1 percent. And the percent change in pH caused by the increase in carbon would be less than 1 percent.

SI: What’s the biological impact?

DW: The first impact is that more phytoplankton would grow; fish eat phytoplankton, so it would add to the bottom of the food chain, which tends to increase biodiversity. It would probably favor some species—some live in an abundant paradigm better than others. But numbers of all species will generally increase, which should be a positive change. Purists would say, “Don’t mess with Mother Nature,” but I think this is the most positive way we can participate in the natural cycle.

SI: Are there any similarities between phytoplankton blooms and harmful algal blooms?

DW: Harmful algal blooms are the result of the introduction of surplus nutrients (primarily nitrates and phosphates from agriculture), at a heavy concentration in shallow coastal waters, causing excessive productivity. This leads to eutrophication; essentially this biomass is being created in shallow water, where it continually blooms, dies, decomposes and demands oxygen—suffocating creatures which are living in these environments.

In the open ocean, phytoplankton are blooming in an open and deep environment.  The oxygen demand is distributed across a larger water column, and a larger overall ocean circulation.  In addition, the iron facilitates the uptake of other macronutrients—rather than continuously supplying those macronutrients.

You never see harmful algal blooms in the middle of the ocean. We’ll certainly monitor for them, though, and we’ll be continually assessing exactly what the ecosystem response is and whether the ecological shift that happens is within natural tolerances and generally favorable.

SI: What could the potential benefit of ocean iron fertilization be?

DW: Well, we’ve got some positive big-picture projections. Conservatively, the modeling results and recent studies, which seem credible (there’s a 2008 study by Jin and Gruber), are giving numbers on the order of 1 to 2 billion tons of CO2 per year at full deployment. Some people have higher or lower numbers, but it probably won’t be an order of magnitude in either direction. Even just 1 to 2 billion tons will tell you that it’s not a complete solution. We’re still pumping 45 billion tons out. But it’s still significant; you don’t get anywhere near those numbers from an average terrestrial carbon sequestration project.

SI: What’s the average amount of carbon that could be sequestered by a single ocean iron project?

DW: One ocean iron fertilization project might sequester 1 million tons of carbon on average.

SI: What are you doing, internally, at Climos with the Series A funding round?

DW: With this latest round of funding we’re hiring more people—oceanographers, logistics people, someone from the Navy, basic finance people, policy outreach. Communications and marketing is huge; we spend 50 percent of our time writing and communicating what it is that we do. Right now, we’re talking to National Geographic and Discovery about documentaries on this. We need to make sure as we move along that we’re reaching out to the general public and not just the scientific community.