187 Neal Spackman - From growing trees in the Saudi Arabian desert to restoring degraded coastal lands

Neal Spackman, founder of Regenerative Resources Co, joins us to talk about transforming millions of acres of degraded landscapes into productive ecologies, using seawater to raise fish, using the wastewater to restore mangroves and growing saltwater species which in turn produce most of the feed for the shrimps.
---------------------------------------------------

Join our Gumroad community, discover the tiers and benefits on www.gumroad.com/investinginregenag. 

Support our work:

• Share it
• Give a 5-star rating
• Buy us a coffee… or a meal! www.Ko-fi.com/regenerativeagriculture

----------------------------------------------------

The rule in good real estate investments is to buy low where nobody sees value and then create value. Our guest of today argues the opportunity in regenerative agriculture lies in buying extremely degraded coastal lands, in places where there is no life, no photosynthesis, and no soil. He has grown many trees without outside irrigation in the Saudi Arabian desert.

More about this episode on https://investinginregenerativeagriculture.com/neal-spackman.

Find our video course on https://investinginregenerativeagriculture.com/course.

----------------------------------------------------

For feedback, ideas, suggestions please contact us through Twitter @KoenvanSeijen, or get in touch through the website www.investinginregenerativeagriculture.com.

Join our newsletter on www.eepurl.com/cxU33P. 

The above references an opinion and is for information and educational purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice.

Support the show

Find out more about our Generation-Re investment syndicate:
https://gen-re.land/

Thank you to our Field Builders Circle for supporting us. Learn more here

Transcript

SPEAKER_00 0:00

The rule in good real estate investments is to buy low when nobody sees value and then of course create value. Our guest today argues that the opportunity in RegenEgg lies in buying extremely degraded coastal lands. Imagine places where there is literally no life, no photosynthesis, no soil, but a lot of waves with seawater. And using the seawater to raise fish, but mostly shrimp and other aquaculture species, use the wastewater of these shrimps to restore mangroves and grow saltwater species, which in turn and produce most of the feed for the shrimp. Not 100% closed loop, but a lot better than the greater coastlands without any soil. Feasible? Probably. Our guest today has grown many, many trees without outside irrigation in the Saudi Arabian desert. Practical and scalable? Let's see. Investable? Let's find out. This is the Investing in Regenerative Agriculture and Food podcast, Investing as if the planet mattered, where we talk to the pioneers in the regenerative food and agriculture space to learn more on how to put our money to work to regenerate soil, people, local communities and ecosystems while making an appropriate and fair return. Why my focus on soil and regeneration? Because so many of the pressing issues we face today have their roots in how we treat our land and our sea, grow our food, what we eat, wear and consume. And it's that we as investors, big and small, and consumers start paying much more attention to the dirt slash soil underneath our feet. To make it easy for fans to support our work, we launched our membership community. And so many of you have joined us as a member. Thank you. If our work created value for you, and if you have the means, and only if you have the means, consider joining us. Find out more on gumroad.com slash investing in RegenAg. That is gumroad.com slash investing in RegenAg. Or find the link below. Today with the founder of Regenerative Resources Co., transforming millions of acres of degraded landscapes into productive ecologies. Welcome, Neil. Thanks, Con. It's great to be here. And to start with the personal question, how did you end up in, let's say, the soil movement? Let's call it like that. I mean, many people will know some of your work. I will let you introduce yourself. I will definitely put a very famous video of you in the links below. But how did you, let's say, roll into this or how did you end up spending your time focused on soil and mangroves and we're obviously going to talk about that. Let's say the regeneration movement.

SPEAKER_02 2:37

So I got into the regeneration movement largely as a result of travel. I spent a lot of time in Guatemala when I was younger and some time in the Caribbean as well and that's where my interest it kind of came by way of poverty actually. I became very interested in poverty in my early 20s. Sometime in there, I made the connection between poverty and land use and got very interested in sustainable agriculture. Do

SPEAKER_00 3:13

you remember when or where? Was it a clique or was it a gradual

SPEAKER_02 3:17

process? Oh, no. I was living in a little town called Teculutan, which is in kind of central Guatemala, south central Guatemala. Guatemala and meeting with corn farmers who were telling me about how their corn yield was going down and they were facing drought. And they were debating over if they needed to switch crops or if they needed to buy more inputs. And I think these were some of the poorest folks I've ever met. And we helped them dig a well. We helped them with a little bit of water access stuff. But it was that would have been 2001 when really it maybe 2002 and I was I went back and went to school I came back to the states I went to school ended up studying Arabic and economics but the passion for sustainable ag and as well as sustainability in the built environment, they kind of became my hobby. Where I would... I read probably between 2003 and 2008 or so, I kind of read everything I could get my hands on on those subjects, but it wasn't what I was doing professionally. And then in 2010, I was offered... the chance to join the Al-Bela Project in Saudi Arabia. And that was my chance to get into this stuff professionally. So at the time, I had very little experience, asides from voluntary work in Latin America. But it was my chance to pivot into the kind of thing I really wanted to do professionally. So I started doing this professionally in 2010 And that project... I spent eight and a half years, eight, eight and a half years, working with tribes of settled nomads in the Saudi desert, prototyping a system to reverse desertification, restore the indigenous grazing patterns and the indigenous livelihoods, and in a sense, create rural wealth by reestablishing ecological function. So that project was it ended up being very heavy on the regenerative and very light on the agriculture but it was a regenerative ag aimed at a silvopasture system and that was a massive adventure the reason I was hired onto that was more because of my language, culture and leadership skills more than for my proven record on reversing desertification right it was it was that

SPEAKER_00 6:40

and not so many people I think that have the full package and on the language side and cultural and the practicalities of

SPEAKER_02 6:48

that there was there was a concerted effort to find someone that would be viewed as politically neutral and tribally neutral and that I think that's why they picked an American and a Christian was because I would show up generally with as a total foreigner and therefore I could establish a guest status and in Arab culture and particularly in Bedouin culture there are very strict rules about how guests are treated and so that was kind of the the social and cultural entry point for that project to happen but we did you know we made thousands of mistakes in that project prototyping different things doing lots of small And we had a few very big successes. And I don't want to talk too much about the results of that because they're all still under NDA. But the project itself was tiny, right? It was like 100 acres. But we did have a full watershed. We had the mountains. We had wadis. We had kind of an artificially delineated alluvial plain. And so it was a fractal of the geography of the entire west coast of the Arabian Peninsula. And that was deliberate. We wanted something small enough so that we could prototype and see some successes, but that would then lead to greater application. I left Al Bayda in 2018. determined to not do non-profit work ever again, unless it was me funding it, right? If in the future I'm a philanthropist of some sort and able to fund my own non-profit

SPEAKER_00 8:46

stuff, then I'll do it. What's the main reason? You sound very convinced. What's the main reason for

SPEAKER_02 8:51

that? Well, the... What we built in Al Bayda was culturally, ecologically sustainable, if not regenerative. But because we were a nonprofit organization and because we were prototyping, the financial side of things was always a struggle, right? Which is typical of all nonprofits, right? You spend

SPEAKER_00 9:17

a huge amount of energy. Yeah, on that, on getting the money in and not so much on putting it to work.

SPEAKER_02 9:23

Well, exactly. And so... after eight years of running a non-profit, I said, okay, whatever I do next, it's got to make money. Because that's how the snowball effect happens, right? If you're making money, then you can go do it again. So

SPEAKER_00 9:41

where did you go next? With such a strong conviction and very understandable, I think many people in this podcast would be nodding right now, like, of course. What's

SPEAKER_02 9:51

next?

SPEAKER_00 9:52

I'll put the video below oh, there's some great, like the difference and the learnings there and just the sheer possibilities are fascinating, especially visually as well. So after you've done that on the, let's say, the social side and the soil side, regeneration side, where do you take that experience?

SPEAKER_02 10:13

So knowing that I knew nothing about starting a business, I went to Stanford for a year and did what's called the MSX program. It's essentially a one-year MBA at Stanford for people who are mid-career. So I did a year at Stanford where I met my current partners through a sustainability center there. We actually won a grant from the Tomcat Center for Sustainability, which was kind of the first revenues we got in regenerative resources. But I went to Stanford and said, okay, I'm going to start this new thing I've never done before. I know I'm going to make a lot of mistakes. If I go to a business school and at least do some case studies and some learning and get some tutelage and build a network, then I can avoid mistakes when I try to– whatever I try to do next, I know it's going to be a for-profit. I know it's going to be entrepreneurship. And so I was at Stanford from 2018 to 2019, and we incorporated regenerative resources August of 2019. so it was it was two months after graduation that that happened and it was it was very serendipitous because I I was still thinking I was going to be doing a a somewhat standard agroforestry business is what I imagined going into Stanford and coming out what is to you resources is very different

SPEAKER_00 11:48

what is a standard agroforestry business what was it back in the day when you entered in your

SPEAKER_02 11:52

mind I was thinking primarily about arable land or hyperarid agroforestry because that's what we did in Albaida was hyperarid agroforestry and so there were ideas about taking a real estate angle to that there are ideas about breeding and patenting some trees that are largely forgotten but have been used extensively historically I had

SPEAKER_00 12:21

a lot of ideas what made it go I would say towards the extreme quote unquote side or much more regenerative side

SPEAKER_02 12:30

so I actually think that's where the biggest opportunity is is the highly degraded non-arable landscapes because the barriers to entry are a lot lower and because the the potential transformation is a lot higher right like if I go and buy an acre of corn in Iowa for$10,000, right? It may be somewhat degraded after decades of monocropping corn, but it's still got soil. It's still understood to be arable and agriculture land. It still costs$10,000 an acre to get it, right? Whereas the land we're looking at, some of it we can get for$500 an acre. Like

SPEAKER_00 13:27

in good real estate, the difference is made when you buy it.

SPEAKER_02 13:30

Yeah, exactly. And so the... The barriers to entry are lower, the potential transformation is a lot higher, and it can actually be just as profitable as a field of corn with much lower input costs. And that's the answer to your question of what's something about regenerative agriculture that most people don't think is true that is true. We can transform highly degraded land into extremely productive land in a way that doesn't duplicate the common problems of monocrop systems.

What do you believe is true about regenerative agriculture that others don’t believe to be true? Inspired by John Kempf

SPEAKER_00 14:12

So walk us through like what kind of landscape are we that you say it's so much more degraded what I mean this is an audio podcast obviously like walk us through visually look what kind of how should we because we can all imagine an acre of corn in Iowa I mean most people I think can or you can google that. Yeah. What should I imagine the kind of landscapes or land you are looking at and get excited about because of the potential like what What do we see there? What do we feel? What do we smell?

SPEAKER_02 14:36

So let me talk about regenerative resources a little bit to answer that question. We are focused on coastal landscapes and largely barren or degraded coastal landscapes, generally in the subtropics or the tropics. And if you're sitting on one of our sites in a pre-development phase, it's a Extremely windy. It's very salty. There is no soil, no water, and no photosynthesis. Not a very nice place to be. year history of developing the system that we're now rolling out and it's built on the work of a scientist named Carl Hodges who is a big fish in a medium sized pond a very renowned scientist in his day he passed away two years ago but Carl Hodges was the first person to be able to replicate the life cycle of shrimp in an aquaculture facility so the entire shrimp aquaculture world starts with him. But he immediately went into trying to make that system circular. So he, in the 1960s, he got a grant from the Rockefeller Foundation to catalog halophytic plants with cropping potential. Halophytes are plants that grow in seawater, right? And probably the most well-known is mangroves. Mangroves are halophyte but there are also annual halophytes. Probably the most well-known that is edible is Salicornia, which is also known as sea beans or samphire or sea asparagus, which grows all over the world. But there are hundreds of halophytes with cropping potential if they were to be developed. And so what Carl imagined in a world where you've got freshwater scarcity and soil depletion is well the ocean is functionally infinite and if we can grow our food with seawater on degraded coastal land then we can develop an agriculture that is drought proof that never cares about freshwater and that can use some of the worst land or some of the least biodiverse land on the planet to to address issues of you know food water security but also climate biodiversity and cooling and energy to some degree as well and there's a there's a quote I like to use by Dennis Bushnell Dennis Bushnell is the longest serving chief scientist at NASA in the history of he's been a chief scientist there for three or four decades and I'll I'll paraphrase him. But he talks a lot about greening deserts. And when he does, he talks about using salt water to do it. So his quote is, we're talking about halophytes. If we can green the desert with halophytes, then we can solve food, water, climate, and energy problems. And so this is, conceptually, this is an idea that has been studied a great deal. There are a number of academic institutions, international and within the US, that are dedicated to studying halophytic cropping. And my partners were the first to do it commercially.

SPEAKER_00 19:01

They ran a project. It's always the question, like, it's great to be doing this in an academic environment. We know it's possible, but then what holds it back to do it commercially at certain scale and does certain impact like why don't we see the coastal like what you just described we have way too much of that and it's not being grown with halophytes basically so what was holding or what is or was holding it back

SPEAKER_02 19:25

there's a lot holding it back some of it is that the barrier to entry on these kinds of projects is very high some of it has to do with the lack of familiarity in Carl's case Carl was a brilliant scientist and not a great marketer or a great businessman. And so he was the scientist that developed this. They did develop a commercial scale farm in Eritrea from 1999 to 2004. That was, they have done components of this in Mexico previously in Valle Aquino and Puerto Penasco. But in Eritrea, by Year two, they were cash flow positive. They were exporting multiple crops to London and Paris. They had 800 locals employed. They had a war widows cooperative providing fodder for the locals' camels off of this system. That was the first commercial version of this. And that was somewhat modeled on conventional agriculture. They were using mangroves to some degree. Then an effort to get this done in Egypt was thwarted by the events in 2011. And I met these guys while at Stanford. And so what we are rolling out now is kind of the 2.0 version of what was done at Eritrea.

SPEAKER_00 20:57

You learned at Stanford to talk the tech version, the 2.0.

SPEAKER_02 21:01

Well, there is technology

SPEAKER_00 21:04

that we're incorporating now. The language matters as well.

SPEAKER_02 21:07

But it's also that there's a lot more regenerative ag technique being applied to this system. Whereas, I mean, if you look at the photos of Eritrea, there are large swaths of monocropped halophytes. And so we're... Do

SPEAKER_00 21:24

halophytes as the, let's say, the non-salty water crops thrive in monoculture or is it the same as any, let's say, agriculture system?

SPEAKER_02 21:35

No, it has some advantages even there because You don't get weeds when you're irrigating with seawater, for instance, right? Because weeds can't grow in it, right? So there are still advantages if you just compare monocrop to monocrop of halophyte to typical crops. There are also disadvantages because they're largely undeveloped crops. So now we are taking agroforestry techniques... incorporating those into halophytic cropping systems and integrating with aquacultures. And so the system we're doing now that we're going to roll out, we estimate will have significant comparative advantages to what was done in Eritrea, let alone comparative advantages to conventional crops that are in markets that we're going to be competing against.

SPEAKER_00 22:34

Yeah, what kind of crops are we talking about? Because you mentioned sea asparagus, but there are hundreds of others. There are hundreds of other potentials. What kind of food or feed are we talking about?

SPEAKER_02 22:46

So, well, let's talk about aquaculture. In a typical onshore aquaculture system, and this is going to be an oversimplification, but a typical onshore aquaculture system, they're dumping their wastewater into the ocean and creating dead zones with it. That's also their source of water in the aquaculture system. And so they're introducing disease vectors, they're introducing greater risk by using polluted water as their source, but they're also causing massive environmental environmental problems and importing all of their feed. And in a typical onshore aquaculture system, feed is 60% of the operating cost. It is easily the largest cost in running a shrimp farm or a salmon farm, right, or what have you. what we do is we use the wastewater from the aquaculture to grow a mangrove agroforestry. And then off of that mangrove agroforestry, we have a proprietary feed for the aquaculture. So that creates serious comparative advantages, whether you're talking about resilience, whether you're talking about risk and disease vectors, whether you're talking about cost of inputs, right? Right now, All the aquaculture producers globally are freaking out because the price of wheat and soybeans are going up, right? So their feed is getting more expensive, which means their product is getting more expensive to sell, but supply hasn't gone down, so the price isn't changing, right? A lot of people are getting squeezed right now because their inputs are getting more expensive, right? And the reason their inputs are getting more expensive is because of the war in Ukraine, because fertilizers are much more expensive and because of drought right whether you're talking about China or Southern California or Europe or many many other places where we're in the midst of or rather in the early stages of what could end up being serious water crisis and that affects every agricultural industry including aquaculture so the fact that our system is circular is Where we can produce, we're not at the point that we can do 100% of our feed.

SPEAKER_00 25:21

But a good chunk already makes a big difference. And what kind of species are you planning to, are you growing in terms, because that's always in aquaculture, the big component feed species is fundamental. In Mexico, we're doing

SPEAKER_02 25:33

shrimp. In Mexico, we're doing shrimp. Probably the Pacific whiteleg and the blue shrimp. The blue is local. I am not an expert in shrimp aquaculture. but we've got a team member who has 30 years experience only running shrimp aquaculture.

SPEAKER_00 26:27

Would you say then the aquaculture piece is sort of the engine that then feeds the mangrove? I mean, that's difficult to say, obviously, in a circle system, but that's the starting point.

SPEAKER_02 26:39

It is the biological engine for the rest of the whole thing, because that is where our source of phosphorus and nitrogen comes from, as well as the micronutrients that are in the ocean water. But it is a seawater agriculture. I need to reemphasize that. We are using no freshwater in our whole system.

SPEAKER_00 26:59

We

SPEAKER_02 27:00

do not need it. And that is the revolutionary thing with our system.

SPEAKER_00 27:08

What scale are we talking about? What's the minimum size we should envision?

SPEAKER_02 27:15

We're not interested in farms smaller than 5,000 hectares. We are involved in a project that may go up to 150,000 hectares. But there are at least 15 million hectares globally where our system could be deployed.

SPEAKER_00 27:32

15. Which is massive.

SPEAKER_02 27:38

It's small compared to the total amount of arable land

SPEAKER_00 27:44

under agriculture. But this is not on agriculture now. And

SPEAKER_02 27:49

it's not on arable land. This is on totally dead

SPEAKER_00 27:53

land. And so beyond the mangroves, what else? That kickstarts the system back. Basically, you're producing a big chunk of your feed. And then what else? Beyond the perennials, what else are you introducing into a system like that?

SPEAKER_02 28:09

It depends on where we are. But for instance, if we were going to do a fodder-heavy system, we'd do a lot of atroplex. We'd do a lot of saltbush. We'd do sarcocornia instead of salicornia. But then there's also things like distichlis, which used to be a staple crop in the Colorado Delta and is largely unknown or forgotten now. But salicornia, distichlus, sea aster, atroplex, saltbush, there are lots of different options. And we don't want to introduce a new species when we're developing a farm. So we tailor the design to local ecosystems as well as to markets.

SPEAKER_00 28:56

Because what is the market like? I mean, you say it's largely forgotten. You mentioned it a few times on a few of these crops. What's the market risk? How difficult is it? I mean, on the shrimp side, I get it. Lower input costs, much better margin. That seems to be, quote unquote, like a no-brainer. But on the crop side, that might be more challenging. How is that?

SPEAKER_02 29:17

No, it's not that the crop is more challenging. It's about what's the right market for it. So, for instance, one of the things that we produce is a high quality animal fodder that is comparable with corn silage. When you look at the protein, when you look at the fiber, when you look at the ash content, when you look at all that stuff, corn silage is comparable. And so we can go into a country like Egypt where they're importing 75 percent of all their fodder for their dairy and meat industries and say hey Egypt you've got all this coastline on the Red Sea that's mostly undeveloped there is no water there why don't we grow one of these systems and we can start reducing your imports of animal fodder we can supply that for your goats your sheep and your camels and supplement for the cattle um And we're not going to use any of your fresh water to do it. Right? Sounds like a good deal. That is a very compelling pitch. Particularly, I mean, Egypt is one of the world's largest importers of wheat. So when we're talking about food

SPEAKER_01 30:40

security,

SPEAKER_02 30:42

they're very good at aquaculture. That's one of the reasons I like Egypt is because they've got the expertise on hand to be able to build one of these systems. Very, very good human resources. sources there. But when we're talking about food and water security, animal fodder is a massive both driver of desertification and a massive cause of insecurity in places like the Middle East or India, Pakistan or even areas of Latin America. And so that's a key market that we're going to get into is animal fodder. Aquaculture Culture feed is also a market we're going to be in. We will mostly produce for ourselves on our own farms first while we balance the system and tweak things. But eventually our feed, right now most feed is one-third wheat or one-third soy, one-third corn or one-third bycatch. It's usually a mix of those four ingredients. If you can imagine, shrimp don't eat eat soybeans in the wild?

SPEAKER_00 31:58

How weird. They would never find a field like that.

SPEAKER_02 32:02

Yeah, yeah. There is no corn floating around in the mangroves where shrimp have their nursery. I can't prove it, but I'm... Just like cows are supposed to eat grass, shrimp aren't supposed to eat soybeans and corn and wheat paste. So, I I have faith that our feed will outperform what's conventional right now. I just can't prove it.

SPEAKER_00 32:34

And so what's the current status? Because I think we as the global, we have talked about coastal agriculture and I wouldn't say for an extremely long time, but partly maybe yes. And how do we get this from a great thing on paper and has been studied a lot in academic research to actually, because these are not the easiest countries we talk about. These are not the easiest entry markets. These are not the easiest things to do from scratch, basically. Like what is... What is next and how do we pull this literally out of the sand?

Why is this now investable?

SPEAKER_02 33:26

So it helps that two of my co-founders are the pioneers of this system. And like I said, they have a 40, 50 year history of doing this. Carl Hodge is a scientist I mentioned to you, was our chief science advisor when we incorporated in 2019. He passed away last year, unfortunately. But in a very real sense, the torch that he lit has been passed on to us.

SPEAKER_00 33:59

So what's different now if they have been working on that for decades? I'm just asking the annoying investor question, like why now?

SPEAKER_02 34:05

Yeah, yeah, yeah. No, they're great questions. One is the need is not as acute or the need was not as acute as it is now. Two, the development of ecosystem service markets and the recognition of the value of ecosystem services and in particular carbon. The development of the carbon market the recognition of policy makers of the reality of all the different effects that we all the stuff we group under the umbrella term of climate change that is affecting populations and countries and then the rest of it I think is somewhat that someone's got to take the risk to do it first and that knows what they're doing and actually has the capacity to execute and pull it off. But I think we're the first team with those qualifications.

SPEAKER_00 35:07

And how difficult is it to talk to... Sorry, let's not put difficult already there. How has been the response from investors so far?

SPEAKER_02 35:17

So we... The most traction we're getting... We got an angel investment in 2019. And we've been in really kind of incubation mode ever since. We are just coming out of it. So our first project, we are now starting the process to finance it. It's an 8,000 hectare project. And it's taken us this long to negotiate the rights. So we started scouting sites. We started putting together a team. We started developing political capital three years ago. And if you can imagine, mangroves are a protected species almost everywhere because we've lost half of the world's mangroves in the last generation. And if you can imagine going and talking to an environmental minister and saying, hey, we're going to farm mangroves, it's quite a difficult conversation to have. When we started out, The environmental ministry didn't even want to talk with us. They didn't even want to have a conversation. Where

SPEAKER_00 36:31

are we talking? That's

SPEAKER_02 36:33

Mexico, right? Because they want to protect the mangroves as they should. We had to get some help to get those first meetings set up. Luckily, by then, we had some political capital locally from Baja California California Sword, which is where our project is. And after... At this point, we have... We have a written letter of support from the Environmental Ministry in Mexico saying we approve the development of the first seawater farm that Regenerative Resources is going to do. We will study it, and if it works out, we want to assist in deploying it throughout the rest of the country. Right? So it went from, we don't even want to talk to you, to all right, if it works, we want to do it everywhere, that we can do it. But that takes a lot of patience and a lot of know-how and a lot of support. And that transformation, that shift is largely due to one of my co-founders who is a former Swiss diplomat who fell in love with a Mexican lady 20 years and decided to move to Tijuana. He's phenomenal and has been the one largely navigating those waters. So at this point, we have a number of sites selected. We picked one as the one we wanted to do first. We have negotiated the right to purchase the first 2,000 hectares or so, slightly less than 2,000, in negotiations to purchase the other 6,000. We have the promise that our permits will be expedited. We have a local team with tremendous expertise. And this is actually a case where we benefited from COVID because most of our team were working in Southeast Asia or Ecuador in various aspects of the aquaculture industry. And because of COVID, they got sent home to Mexico. And if they can work at home, they want to So we have snatched these guys up and they're phenomenal. And so we have a team, we have a land, we have a business model, we have the promise of permits, all of which is necessary before you can go, you know, to a development bank or investors and say, okay, we're ready for this. Right. And that's, it's very, very hard to do that. Right. It would have been impossible for us to do it without our angel investor back in 2019, who I think they saw the potential. They were willing to take the risk and be first in. But without it, it would have been absolutely impossible. Because it is a three to five year process to get a decent sized project going like this. Now, once you've got a first one up and running, Expansion, by comparison, is very simple. You've already got the team. You've got recurring revenues from the project. You've got the proof of concept sitting there. And you've got a lot more resources. So expansion within country, we expect, will happen comparatively rapidly. Going to a new country, we expect, will take another three, four years before you get the first project up and going. But then expansion within country happens through that subsidiary and through local leadership once everything's up and running. So that's not an uncommon timeline for blue carbon projects, right? Most blue carbon projects take three to five years to set up, which is why there is so little supply of blue carbon in the world because it's extremely difficult to get it to a point that it's de-risked enough for an investor to actually feel confident. Because

SPEAKER_00 40:53

how important is that carbon piece for the business model compared to the stream side?

SPEAKER_02 41:00

For our business model, it's a cherry on top. We don't need it. It's just a positive externality of our system that we can monetize. The way we are deploying it, though... And this gets into a really critical piece of the carbon world, if we're going to get into this subject. When we're talking about high-quality carbon credits, right now you're talking about additionality and permanence and leakage are kind of the three main considerations. And there's a lot of skepticism in the nature-based world about the permanence of forest credits, right? Because, well... what's going to stop people from cutting down your forest in 30 years, right? And so one of our maxims is it doesn't make any sense to grow trees unless you address why people are cutting down trees in the first place. And this is not– I think this is tacitly understood by a lot of people, but largely– undeveloped or unaddressed in, I would say, the majority of carbon projects, where permanence in a forestry project comes from sustainable economies.

SPEAKER_00 42:23

Because otherwise it gets cut down.

SPEAKER_02 42:26

That

SPEAKER_00 42:26

is a

SPEAKER_02 42:27

reassurance. Yeah, that's why we lost the mangroves in the first place. In Southeast Asia, mangroves are largely lost because people are shrimp farmers or they set up aquaculture farms. Right? But in Latin America, in South America, in West Africa, it's deforestation for charcoal or to clear it and start doing agriculture or to build fish traps. In the case in Ghana, people are cutting down mangroves because they want to make a living. And so unless you provide an alternate living, people are going to keep cutting them down. And that's what our seawater system builds. The name for this is Regenerative Seawater Agriculture, or RSA. That's what we call it now. In Carl Hodge's time, they called it ISIS, Integrated Seawater Agriculture Systems. Somehow the name ISIS just doesn't have the same kind of cachet or positive connotation it used to, so we now call it RSA, or Regenerative Seawater Agriculture. But what Regenerative Seawater agriculture does is it builds a circular regenerative economy in these coastal areas. So let me tell you, there's a project we're working on in partnership with a handful of fishing villages in Mexico. And their catch has decreased by 90% in the last decade. So where they're used to catching 100 fish, they're now catching 10. And they are facing total collapse of their communities. And this is a pattern happening everywhere. Coastal fisheries are being degraded globally. This is not something specific to Mexico. I have been either tangentially involved in or consulted with or been informed of other similar projects in Senegal, Ghana, Gambia, Ecuador, Mozambique, Oman, where it's the same. It may not be 90%. It might be a 50% drop in the last decade.

SPEAKER_00 44:55

But still destructive.

SPEAKER_02 44:57

It's massive. It is a massive, massive driver of degradation. Because what happens when you can't... You're a fisherman. Your dad was a fisherman. Your grandpa was a fisherman. And you can't catch fish anymore. What are you going to do? You're either going to poach illegal species... I have talked with families that are hunting sea turtles because a sea turtle will feed your family for a week and they feel tremendously guilty about it. They don't want to do it, but that's how they're feeding their family. You poach illegal species or you start cutting the mangroves down. So this poverty degradation trap, people are like, okay, short-term needs trump long-term sustainability. I'm going to cut down these trees even though I know it hurts me in the long run because that's the only option I've got. That poverty degradation cycle needs economic development to interrupt it. And that's what our RSA does. So with this group of fishing villages, we have like a third year vision that we have developed together. We are doing a strict mangrove restoration project with them at their request. That's just a straight blue carbon project, mangrove restoration.

SPEAKER_00 46:25

How do you work with those villages in Mexico? How are they part of it?

SPEAKER_02 46:29

We were invited to go meet with these folks by one of the villagers three years ago. And that began our engagement with them. Over time, we have developed very good relationships There are more fishing villages in the area. There are three that are working with us quite closely. And the long-term vision is we build an RSA on their land. And that creates jobs for the fishermen so that the fishermen can put the fishery in rest. Essentially, it allows them to stop fishing for three to five years, let the fishery rehabilitate, and then begin to fish again, but manage that fishery as a commons under sustainable management techniques. So in the end, we really envision three or four projects with these fishing villages, one of which is, or two of which are mangrove restoration and seagrass restoration. the mangrove restoration we're already engaged in. The third would be developing an RSA farm big enough to hire all the fishermen and create that local economy. And then after that, put the fishery into rest for a number of years. And then we would not be part of this next part, but it allows them to work with the government to set up either a cooperative or some kind of organization that allows them to manage that fishery sustainably as a commons. That's like the 30-year vision with these fishing villages that we have engaged with. And the mangrove restoration project is the first one because it's actually easier to do than setting up an RSA in this particular area. But that's how we see RSA being deployed in these kinds of circumstances. This is the economic system that intercepts and interrupts that poverty degradation trend. And

SPEAKER_00 48:40

how, like the blue carbon piece, we hear a lot about it. I don't think we see too much, like how tricky is the market or how easy is the market? You say there's not a lot of supply. Like how do you envision selling that part, even though it's, quote unquote, just a cherry? But how difficult is that going to be or how easy will that be?

SPEAKER_02 49:04

It's going to be super easy.

UNKNOWN 49:06

Yeah.

SPEAKER_02 49:06

Because we are where the bottleneck is. It'll be easy to sell. Developing it will be a little bit tricky. That's why supply is where the bottleneck is, because it's very tricky to develop. In the RSA system, it's just a matter of building the system and doing the science so we can get good estimates on the carbon. We know it's going to sequester carbon. We don't know how much, particularly when it's net of all the infrastructure structure that goes in. But that informs a lot of our decisions, right? So we could go on the grid for all the power and pumping of that system, but right now the grid is basically diesel, and so we're going to set up our own solar system. In the future, there's potential for wave energy as well on these systems, but on our first project, it's going to be solar, which brings our carbon expenditures way down, right? The kinds of buildings we do will largely be low-carbon footprint buildings, so it's not just going to be cement structures with lots of corrugated steel. So the desire to be able to market our blue carbon comes net of the entire development, so that informs our decision-making around that. But then we know that mangroves... sequester carbon more efficiently than any terrestrial ecosystem. And we did do, or not we because I was not there, but my team did do initial studies of this in Eritrea that gives us some baseline numbers and also informs in some cases how our system will be different than what Eritrea was. But the science will be a little bit expensive, right? Because somewhere between 70% and 90% of the carbon in our system will be soils rather than in biomass. There's all sorts of shops popping up where they're like, we're going to use satellites to measure your carbon. And I'm like, well, that's great for the biomass, but it tells us nothing about the soil. And that's where 70% to 90% of the carbon is. There are, oh my goodness, there are dozens of new entities popping up where they're like, we're going to verify your carbon with satellite data and then we're going to put it on chain and we'll web three everything and refi your carbon it doesn't address the issue the real issue is how do you inexpensively measure soil carbon and we're just going to do it expensively at first and then that at least gives us a baseline estimate for expansion within that region

SPEAKER_00 51:59

of course the levels are going to be extremely low to begin with if you look at the land you're purchasing. Oh,

SPEAKER_02 52:06

the baseline is zero.

SPEAKER_00 52:07

The

SPEAKER_02 52:09

baseline is easy to establish. It's zero. There is no carbon in these soils. It is salt and dust.

SPEAKER_00 52:19

It's basically

SPEAKER_02 52:20

no soil. There's no soil at all because there's no photosynthesis. So yeah, the baseline is easy. There are a number of shops that we like that we are collaborating with in that world, some of which are Web3 oriented that seem to be ahead of the pack on that. But for us, in the RSA at least, our financial model is built... basically without soil estimates incorporated because we don't know what it's going to be, right? It's looking good because, I mean, we've watched prices quadruple in the last three years. You know, blue carbon was$8 to$10 in 2019. It's now above$50,000. High-quality blue carbon, it's over$50 a ton right now. So, I mean, that bodes well for us because not only are we producing blue carbon in the RSA, but RSA, in my opinion, is the linchpin to successful blue carbon projects globally. Yeah. Thank you. Thank you. And that is one of the big questions. How do you guarantee that people aren't just going to come cut it down later when the checkbook is tight and people can't tighten their belts anymore? That's what they go and do. So what our system does is that it helps people that would otherwise be degrading that ecosystem. It helps them become stewards. Because the ecosystem services of a mangrove forest are so much higher than anything you could get out of cutting it down and selling it. If you look at the holistic value, just the services provided to the health of a fishery and the quantity of fish that grow in a healthy fishery next to a mangrove forest versus an unhealthy nursery or an unhealthy fishery next to a degraded mangrove forest, the difference is astounding, right? But if you degrade the fishery, that's not helping you anymore And then you degrade the mangrove forest, and then you have total collapse of your community. So this is how you reverse that cycle and help people become stewards of those landscapes rather than the major cause of degradation.

SPEAKER_00 55:08

And what have you looked at, I mean, the scale you're operating in, is the conversation around, let's say, stabilizing local climates or what's the effect of the mangroves on the local, the full ecosystem? I mean, you mentioned this, I see you start laughing. You cannot see that on the audio, but you mentioned that in the project in Saudi Arabia, this was a fractal of the full landscape or the full watershed. How is that thinking now and how is it being used or is it being used in these kind of projects? So... Because we talk a lot about carbon, but it seems like the water cycle is more interesting than carbon. The water

SPEAKER_02 55:50

cycle is super interesting, and I wish I could share with you who we're working with to measure that stuff, but I can't.

SPEAKER_00 55:58

We'll talk about it another time.

SPEAKER_02 56:01

Well, as soon as I can publicly say it, we'll do a press release, because it's really exciting. But the greater effect of this is that... So we talked about fishery health. We talked about carbon. Beyond that, there's biodiversity, water, cooling, sea level rise, and storm protection. So where in places like the Caribbean or Mexico where you do get hurricanes, mangroves are the greatest protection against hurricanes. And our system will duplicate that ecosystem service. So for instance, if you're ever boating on the ocean and a big storm is coming in, you're supposed to park in the mangroves that is the safest place to go. So storm surges, hurricanes, that is an ecosystem service. I'm not sure we have a way to monetize that right now. If there is a way to monetize it, it would be with the reinsurance companies. But then that's also very location specific. And the locations we're looking for tend to be rural. And we're not doing this, we're next to a city like Miami, Miami doesn't have thousands of acres of degraded barren land next to it, right? And if they did, they'd want to build more Miami, not build a farm on it. So there's a mismatch there to some degree. On the water cycle, we know our system will increase freshwater resources, both in terms of rainfall creation and in terms of intercepting flash floods and restoring shallow aquifers we don't know how much yet and that is something that we are we have a set of collaborations that we're going to put into practice to measure that on our first farm so in Eritrea we did the project in Eritrea cooled the local climate by 2 degrees Celsius wow

SPEAKER_00 58:07

How far did that get? Like local as in right above or right

SPEAKER_02 58:11

around? Only in the immediate vicinity. Okay.

SPEAKER_00 58:15

But still.

SPEAKER_02 58:16

But that was only a thousand hectare project, right? As you expand and grow to scale, the question is that how many microclimates do you need to affect or create before you start changing climate? And I don't

SPEAKER_00 58:34

know the answer to that. Nobody knows, but it's a very valid question. Yeah,

SPEAKER_02 58:39

no, we are going to answer that question as part of the R&D around our first farm. And we have some really exciting collaborations

SPEAKER_00 58:47

built around that. The mangroves are exciting compared to forests. Like what's the effect of mangroves? Of course, because they are at the ocean of all the flooding and the storms, et cetera, but in general affecting the water cycle with their feed in the water. I mean, imagine they do that a lot.

SPEAKER_02 59:03

Yeah, it is the edge, the first edge within, if you're looking at the water cycle, at a closed loop water cycle it's one of the edges where you can make the biggest impact but so you've got the cooling You've got the increase in water vapor from the evapotranspiration, and you have an increase in ice nuclei, right, also from the evapotranspiration, right? Every tree does this, but they give off a part of their respiration. They give off volatile organic compounds that in the atmosphere will break down into ice nuclei, and then they assist with cloud creation, right? So that's the rainfall side of things. That's not necessarily an effect that will be felt locally or even regionally, right? So mapping out the precipitation shed of a given project is– I don't know that we're going to do that because– it would be neat to know, but it doesn't necessarily move the bottom line. And it doesn't, if there's some PhD out there and you want to do like a postdoc.

SPEAKER_00 1:00:13

Somebody wants to pay for the rain.

SPEAKER_02 1:00:14

Yeah, if somebody wants to do that study, you are welcome to come and stay on our farm and measure it. But that's not something we're going to pay for.

SPEAKER_00 1:00:22

Do you envision like a situation at some point where this is, like in certain projects maybe where it's relatively easy, quote unquote, to measure and you know, okay, if we restore X amount of hectares, here we know we influence precipitation like x kilometers or miles that could be quite far away because some of these systems they're of course not linear but there could be interesting parties down the line that said we would love for more of this to happen because we need yeah I don't or is that too complex

SPEAKER_02 1:00:55

it's not too complex it's there are shops out there who do that kind of modeling um I don't know that that would be compelling enough to say. Fund

SPEAKER_00 1:01:09

this

SPEAKER_02 1:01:10

because we want rain. Could you get Panama to pay for that in El Salvador? I don't think so.

SPEAKER_01 1:01:17

For sure with blockchain you can. Could you get

SPEAKER_02 1:01:21

Arizona to pay for that in Baja, California? I doubt it. Not at this point. Maybe if we had better modeling and proven the whole thing out, then maybe, maybe the reinsurance people do, but it's, I don't think it's necessary. I'm, I'm happy to provide. Yeah, this is, this is one of the challenging things is we're providing, we're trying to privately finance something that creates a great deal of public good, right? It's, it's the opposite of privatizing gains and public and making the losses public, right? Which is what the banks did in 2008. You know, they privatize the gain, but make the public pay for it. This is the opposite. We are trying to privatize-

SPEAKER_00 1:02:08

Which is not a good investment. I mean, it is if you create a lot of public good and a lot of goods in general.

SPEAKER_02 1:02:14

Is there a way to get private finance for a public good? It's very tricky. And so I, but that, those- That is blue carbon at the end. Those positive externalities will inform our marketing, right? When we go retail to sell our goods, I'm going to be able to say, hey, you can buy shrimp that destroys the ocean, or you can buy shrimp that grows a mangrove forest. Which would you rather eat? I'll be able to say that in our marketing and we'll have the science and the proof to back it up. But some of these externalities that are positive, we're just not going to be able to monetize those in the near future. In the distant future, maybe. I'm okay with that because it's awesome. You know, it's awesome.

UNKNOWN 1:03:11

Yeah.

SPEAKER_02 1:03:12

To be able in the future say, hey, Mr. Corn Farmer further up the watershed, we're giving you this rain, you know, to be able to say, just to be able to say that we're making it rain and to have the science to back it up. Who else can do that? You

SPEAKER_00 1:03:30

know, that's awesome. You can, I mean, you can model it and probably you can track it even and somehow link it back to your mangrove forest where the evaporation started that shouldn't be too I'm completely out of line here but it shouldn't be too difficult for sure it is but that would be just unable to say it we made it rain in this watershed not too much not too little but enough to like a proper rain

What should smart investors, who want to invest in Reg ag and food look out for?

SPEAKER_02 1:03:56

that's on the rainfall side of things the other thing is that because we're in deserts we're also dealing with flash floods, right? When it does rain, you tend to get flash floods. And our system, instead of letting those flash floods run into the ocean, our system intercepts those. This is part of the design process and part of where the Albaida project bleeds into our work. But by intercepting that and having, you have a kind of a seawater layer underneath our soil. And then what it will do is it will create a freshwater lens where the freshwater will float on top of the seawater. And then further up in the watershed, it will start to restore shallow aquifers. So we will increase groundwater by intercepting that surface flow in addition to increasing rainfall once we're at scale. So that's super cool. I don't know that we can monetize that. We don't really need to at this point. If there's an opportunity in the future, great.

SPEAKER_00 1:05:03

And so, I mean, we could talk about this for hours, but I want to be conscious of your time and ask a few questions because I know you have to go at some point for an investor meeting. But what would you tell, I mean, it sounds like we're in the project developer phase, which sort of reminds me of the renewable energy sector. And a number of years ago, it depends where you are, which room, but you have these shops like yourself that are privately funded in this case through a family office, through an angel investor, sorry. And they are developing projects, which obviously need other finance. What would you tell investors now? What is their role now? If they get excited about blue carbon mangroves, restoration, rainfall, the whole shebang, what is their role? What should their role be? Obviously, without giving investment advice, but what would you tell them as their role, what they should take as their role to kickstart the system, this whole regeneration system?

SPEAKER_02 1:05:53

I mean, this is the role that I'm playing right now. This is the phase that we are in. We are actively financing our first pipeline of projects. Thank you. First off, we are not talking a lot with VC. VC in general is a bad fit for this, in my opinion, because of the timeline and because of considerations about being partnered with local entities. Our exit is going to look different for our investors.

SPEAKER_00 1:06:31

How come? What could be an exit from a Mexican project or from a project? How do you envision that?

SPEAKER_02 1:06:39

We envision... That the first money in, essentially we're selling equity into the first project where people get a percentage of the cash flow. The change in land value also underpins the value of their share in that SPV. But then when they want to exit, we're going to buy it. We're not going to IPO. We're going to buy it back. That's what we want to do.

SPEAKER_00 1:07:05

Just to make sure that the land never gets speculated or what's the reason behind it? Or because you think it's such a good investment?

SPEAKER_02 1:07:12

both both um we're the right people to manage it in in partnership with our local partners

SPEAKER_00 1:07:19

yeah because you don't want at some point to build a gigantic hotel

SPEAKER_02 1:07:28

yeah yeah yeah exactly

SPEAKER_00 1:07:31

That's also part of what informs the

SPEAKER_02 1:07:33

exit.

SPEAKER_00 1:07:35

How do you make sure that doesn't happen, that somebody comes with a billion dollars and says, let's develop this coast into the next Miami? Just a random

SPEAKER_02 1:07:44

example. We'll just say thanks, but no thanks. The... I mean, the change in land value is significant the way it is. There may be opportunities to put small tourism developments in there. I mean, if we're next to a good surfing wave on our 8,000 hectare farm, there's no reason we can't put 20 hectares into a little surf spot. Why not?

SPEAKER_00 1:08:12

With great food, for sure.

SPEAKER_02 1:08:14

Yeah, with great local regenerative food. But essentially, because I'm partnering with local indigenous communities and it takes two years in general to gain these folks trust right we show up generally we're invited right but even so we're a North American company from the US coming in and saying hey we want to do all that stuff

SPEAKER_00 1:08:44

people don't trust us why should they trust us

SPEAKER_02 1:08:50

you know and so it takes a good It takes time to build trust. And trust is the most valuable commodity. And if I were to go to these folks and say, hey, partner with us, work with us. This is what we're going to do. And at the same time, I'm telling my investors, well, in 10 years, we're going to sell to Unilever or we're going to sell to Nestle, right? Or we're going to sell to Cargill. That would be an explicit plan to betray the trust of the indigenous communities down the road, right? So our exit cannot be a typical exit. We're not going to sell to PE. We're not going to sell to a bigger shop that doesn't see the value of working with the local communities the way we see it, right? I'm not going to betray that trust, which means our exit has to be different, which is why VC is in general a bad fit. But development banks, green bonds, blue bonds, private equity and family offices, that's where, you know, starting out, we're going to have to have the higher cost of capital on our first project. But eventually, I see us funding almost every project through much lower cost of capital in the form of green and blue bonds, right? Because we'll have an extremely, we'll have very valuable real assets underpinning our projects. We'll have recurring revenues. That's enough to say, okay, if our next project is one and a half billion dollars, that's fine for a green or a blue bond. If we've got the whole system proven out, if we've got recurring revenues, if we've got sales, if we've got blue carbon already developed. It's just the first one where we're going to have to take higher cost of capital.

SPEAKER_00 1:10:42

Like most developers. Yeah, like most developers.

SPEAKER_02 1:10:45

Exactly. Do

SPEAKER_00 1:10:47

you see investors comfortable with that? Like people that have done renewable energy projects, for instance, that, oh, we recognize this. This is sort of the same as 20 years

SPEAKER_02 1:10:55

ago. It's very similar. It's very similar to the solar world 20 years ago.

UNKNOWN 1:11:03

Yeah.

SPEAKER_02 1:11:03

And we have, I mean, we're in the early days of this process. We have been talking with some family offices and some other groups for three to six months now where we've more or less just said, look, we're still too premature to really have this conversation seriously. That's different now. I did three pitches last week and I'm doing another half dozen this week. Full

SPEAKER_00 1:11:30

fundraising mode.

SPEAKER_02 1:11:32

Yeah, but there are serious comparative advantages in our system. Like if you compare to a typical aquaculture, we are going to blow them out of the water financially. You look at a typical animal fodder system, like compare us to an alfalfa field. We have comparative advantages, not just in the fact that we don't need to pay$10,000 per acre to get started, right? Not just in the fact that we can use seawater. I don't know if you saw the this article, FarmRays linked to it. Do you know Jace at FarmRays? They're a US company.

SPEAKER_00 1:12:10

Does that ring a bell for you? I think we have been chatting, but we never interviewed them, so I don't know if I know.

SPEAKER_02 1:12:18

They were folks that I met at Stanford, but they're a company that, as I understand it, they help American farmers access public monies.

SPEAKER_00 1:12:29

Yeah, we chatted about it. I don't think we did. We didn't do an interview yet, but we definitely connect when they just launched. But they link to an

SPEAKER_02 1:12:35

article, or rather to a study from 18 months ago, I believe, that said, in general, regenerative agricultures are 70% more profitable.

SPEAKER_00 1:12:47

Which is a study by Jonathan Lundgren, which we had on the show twice. I will link it below. It's fascinating.

What would you do if you were in charge of a 1B investment portfolio?

SPEAKER_02 1:12:54

78% more profitable. We expect, I don't know if we'll get to 78%, but in the aquaculture world, world, we are going to have serious comparative advantages. And I expect that in 20 years, our model will be the standard model for a great deal of geographies because it is going to be a lot more profitable.

SPEAKER_00 1:13:19

And so what would you do?

SPEAKER_02 1:13:21

Of course. Yeah.

SPEAKER_00 1:13:22

What would you do if, as a final question, and I really let you go to your investor meeting because we've been chatting for a while. What would you do if you had a billion dollars under management? Could be the longest time frame investment horizon if you want to, but it had to be put to work as an investment. What would you do?

SPEAKER_02 1:13:39

Yeah. So my follow up question to this was what's the risk profile of my limited partners on that billion dollar fund you can go

SPEAKER_00 1:13:48

as risky as you want

SPEAKER_02 1:13:49

is this

SPEAKER_00 1:13:50

people with

SPEAKER_02 1:13:50

a high appetite for risk or a low appetite for risk

SPEAKER_00 1:13:54

I would say high and you can choose

SPEAKER_02 1:13:56

if because if I don't need to diversify on that portfolio I have my eyes set on a 300,000 hectare site that I want to buy It's a$350 million purchase. We

SPEAKER_00 1:14:15

have some money left for development.

SPEAKER_02 1:14:18

I'm not going to say where it is. Of course not.

SPEAKER_00 1:14:21

But you would put it in one, let's say one slash two. I'm asking this question not because I want to know dollar amounts of places, but what would you prioritize? Maybe you say I would put everything in soil carbon measurement tools or marketing of these seawater aquaculture plants or Like, what would you prioritize? And you would go for land, which is interesting to know.

SPEAKER_02 1:14:46

I would go for land right now. A... You're not going to lose. There's no loss there, right? It's a real asset worth whatever it's worth, and it's going to appreciate in value. But

SPEAKER_00 1:15:00

you're going to buy very, very, very degraded land. So you have to find a buyer at some point if you want to get out of it. And if nobody sees value in there, it has value on paper, but of course only if you find a buyer. If you want to get out, you want to develop for sure.

SPEAKER_02 1:15:13

Right. The other thing is I would invest in some particular geographies. So I would, of that billion... I would start a pilot farm in Morocco. I would do a pilot farm in Namibia. I would do an adapted version in Spain. I would automate our system, the RSA system, and then I'd go to Australia with it. Australia has easily got over a million hectares of degraded coastal land with easy access to some very big markets in East Asia. So I would do those. I would do those first farms in those geographies. I'd do like a big RSA on that 300,000 hectare landscape that I really want to get. But it would all go into RSA. And in fact, I would not be surprised if, you know, within a decade, if we are doing projects at that scale.

SPEAKER_00 1:16:21

I hope so. We need to go to the billion dollars per scale. We're not

Are you optimistic?

SPEAKER_02 1:16:27

there yet. We've got to build our first project. We've got to tweak our system. We've got to develop the IP and formalize the IP. That's the next three, four years of operations for us is getting this first set of pipeline financed and built. But after that, we have more leads than we can possibly follow up on right now. right now, much more than we have the capacity to execute on if we wanted to. So expansion has the capacity to happen very quickly. And I don't think a billion will be too much.

SPEAKER_00 1:17:05

Considering, I mean, I always ask last question and then I don't. Considering what you know on what's possible, but also the state of the world, you've traveled a lot. Are you hopeful? Yeah.

SPEAKER_02 1:17:17

This is a great question. As a species, historically we are terrible at preventing disasters. right um

SPEAKER_00 1:17:31

and a horrible keystone species

SPEAKER_02 1:17:33

and horrible at preventing disaster but we in terms of species on earth nothing compares to us in terms of adaptability at least at least um there are no other vertebrates that compare to us in terms of adaptability um there's no other mammal that's figured out how to live in every major biome

SPEAKER_00 1:17:58

climate and biome

SPEAKER_02 1:17:59

you know we are very very good at adapting and we can adapt very quickly and history shows that so my my hope and and this is something that our company is our company is climate mitigation but it's also climate adaptation I am not hopeful that we will prevent You know, many of the disasters that we have seen coming for a long time. And look at the water situation right now, right? We've known for decades that the Ogallala Aquifer in the central U.S. was being depleted. We haven't stopped depleting it, you know, but once it's gone, we're going to adapt, right? The Colorado River in the southwestern U.S., it's 15 million acre-feet total. In general, 15 million acre-feet. All that 15 million acre feet is already accounted for, right? Every drop belongs to somebody. Demand for water within the Colorado watershed is expected to grow by another 15 million acre feet in the next 25, 30 years or something. Right? We don't have... Demand is going to increase by another Colorado River. There's only one Colorado River, right? And 40% of that river, between 30 and 40%, is going exclusively to alfalfa. Right? That is one of the stupidest things we can do with that water. But we're still doing it. Right? So are we... Is it politically feasible that we're going to change how all this water is used across a Byzantine system of laws? No. The water Water's going to run out, it's going to force adaptation, and then we're going to adapt.

SPEAKER_00 1:19:47

We're really good at adapting. Then we're going to build a lot of mangroves to bring back the rain. Yeah, I mean, it's... But not enough to build two Colorado rivers.

SPEAKER_02 1:19:55

So does that make me an optimist or a pessimist, where I say, yeah, we're good at adapting and we're going to figure it out, but we're not going to prevent these disasters from happening? I don't know what that makes me.

SPEAKER_00 1:20:08

I don't know either, but it came up as... question as a good final one. I wouldn't say summarize, but just have a look inside your thoughts.

SPEAKER_02 1:20:21

I will say that I am a lot happier as a person working on solutions. I am not prone to despair or climate despair. I get sad about things, right? Like they just said that the manatee, the Chinese manatee is now functionally extinct. They don't think it's anywhere. Like that breaks my heart. It does. It's really sad. Yeah. But the fact that we're working on solutions that address biodiversity and carbon and local economies and food and water, I feel a great deal of satisfaction working on the stuff I'm working on. And I'm confident we're going to be able to roll this out and make a difference. So... And let me close with one more thing. What underpins the regenerative movement is... a kind of faith that humans can be a keystone species, right? Now, that is proven if we look at some indigenous societies, not all indigenous societies, but some indigenous societies have had systems that lasted for tens of thousands of years sustainably, right? And now it's what? It's 5% of human population is indigenous and they're stewarding 80% of the biodiversity. You know, they are the... the example that humans can be a keystone species. They're the proof of it. And I don't want to engage in the noble savage stereotype. Indigenous people are just people. They have a set of cultures and rules and practices that have allowed them to foster biodiversity and be stewards of the earth. That's what all of us should be. At the same time, we're all indigenous to earth. All of us. We belong on this planet and our role is to be a keystone species. And that idea underpins the whole regenerative movement. And for me, some of the most sublime experiences I have ever had was seeing birds build nests in trees that I grew and in a place where people told me trees aren't supposed to grow. Seeing bees swarm on a site where people said, we haven't seen bees here for 40 years. And to know that our work facilitated that. And I didn't go and trap bees and bring them over. I created the microclimate and facilitated a way for nature to come back. And all of us can do that on a tiny or large scale. But what that did to me internally... was quite profound. And one of the things that I think regenerative resources will do is allow people to participate in that somewhat by proxy. But I think if more of us had that kind of experience, it would bode well for us and for every other species on this planet. And that to me is... you know, the personal underpinning of why I'm part of the regenerative movement.

SPEAKER_00 1:24:13

And with that, I think it's a perfect end to this conversation. I don't think it's the last time. I hope it's the last time we connect. I want to thank you so much for the work you do. Thank you for showing up here and sharing. And of course, wish you good luck with the investor meeting that follows right after this conversation.

SPEAKER_02 1:24:30

That's right. It's in two minutes.

SPEAKER_00 1:24:37

Thanks again and see you next time.