It’s Great to Own a Railroad:  Sierra Energy Making Steady Progress 

We recently dropped in on Sierra Energy to get an update on what local environmental champion Mike Hart is doing in his pursuit of a novel waste gasifier.  He has made great progress in the past few years and is ready to get to a full commercial unit perhaps by 2025.  But that is only half the story.

Mike was struck with an idea a quarter century ago.  As sustainable fuel sources are being invented, why not use them to make the cleanest railroad in the country?  In 1993, Mike acquired the Sierra Railroad Company, based in Oakdale, and merged it with the Yolo Shortline Railroad in 2003.  His was the first railroad in the country to run on B100 biodiesel, for which the EPA designated him an Environmental Hero.  Over time he added other branch lines that the major railroads were abandoning.  His view was that there was still a lot of business to be done hauling goods to and from the farms and industries along these routes because rail was the most fuel-efficient way to move this freight.  It turns out he was right and that it was solidly profitable.  This has allowed him to pursue his original visions in ways that even he may not have imagined.  Now, the railroad is profitable and has 215 employees. The railroad not only does freight hauling but also operates excursion trains including the Sunburst operation in Ventura, the Sierra Railroad in the Gold Country, The RiverFox in Sacramento, and the popular Skunk Train from Fort Bragg to Willits.  

While 100% biodiesel was a good step, Mike saw an even better opportunity to use fuel made from waste.  As a Big Bang judge at UC Davis, he found an innovation based on a steelmaking blast furnace that could cleanly convert almost anything into a nonpolluting synthesis gas (basically carbon monoxide and hydrogen), that in turn could fuel many things—even a locomotive.  He acquired the rights to the technology in 2004 and began a long journey to commercialize it, as the FastOx® gasifier.  He landed contracts with the Army and the CEC to install a prototype unit at U.S. Army Garrison Fort Hunter Liggett in Monterey County, and most importantly raised a $33 million Series B in 2019 led by Bill Gates’ Breakthrough Energy Ventures to advance that project by providing funds to upgrade the design and do test-runs on a wide variety of wastes.

The latest news is that Sierra Energy is now building its 2nd generation five-ton per-day demo unit, incorporating a lot of lessons from their test runs to combine some of the processes into a single unit and simplify the slag discharge system.  The result is a significant cost reduction for the eventual 100-ton-per-day unit that will be their initial commercial offering.  That size is very appealing to communities as an alternative to landfills for waste disposal, with the side benefits of getting revenue for several by-products.  Sierra could be operating the demo unit this year and fabricating a first commercial unit in 2025. They still have serious interest from hundreds of customers worldwide.  While Sierra had thought earlier of adding units to convert the synthesis gas into electricity, clean diesel, chemicals, or fertilizer, they now intend to focus on maturing just the gasifier to produce a clean product that can feed these other conversion technologies being pursued elsewhere.  Sierra sees what it has now as a core technology that can be applied in many ways—and they are seeing a lot of interest from those who want the syngas as their feedstock.  

Sierra Energy is now the home for a dedicated cadre of employees, half of which are around the Davis headquarters of the company, and the other half are working at Fort Hunter Liggett.  When asked how he will fund this last step to commercialization, Mike said that a portion of the profits from the railroad will carry the team to its launch point, after getting such a big boost from equity investment and government contracts.  It’s great to own a profitable business that can support the pivotal final push of a startup.

Is that all?  Not by a long shot.  Remember all this started with the notion of having the cleanest railroad in the country.  Mike is not only dead serious about that, but he also wants to pave the way for all the railroads here and abroad to meet the same goal.  For that, he has another startup activity—converting locomotives to being powered by hydrogen fuel cells.  His Sierra Northern Railway subsidiary received a $4 million CEC grant to convert one of the switcher engines in its fleet to cutting-edge fuel cell and battery hybrid technology (to be ready this year) with zero emissions. They have also secured an additional $19.5 million from the California State Transportation Agency (CalSTA) to add three more conversions of these zero-emission switcher locomotives.  Mike has set his sights on converting all 260+ similar locomotives at ports and rail yards in California and plans on building a conversion facility to do it at their 116-acre facility in Oakdale, California.

Tying it all together, one or more FastOx commercial units could provide the hydrogen needed to fuel all these locomotives.  How would they source the waste the unit runs on?  One feedstock could be creosote-soaked rail ties that have no good disposal option now and are just accumulating in piles on the wayside.  The hydrogen locomotives could move goods to rural farming areas, pick up farm products for the return trip, and gather some rail ties or other waste along the way to bring back to the FastOx hydrogen production units for refueling.  It’s practically a circular economy.  

I have known Mike for a long time, even before creating CleanStart (and he was a strong supporter of that initiative).  I am not sure he had all this planned exactly the way it has turned out.  But one of Mike’s greatest skills is in seeing and successfully seizing opportunities that others fear are too risky.  It looks like that skill has been put to good use for the benefit of the environment.  And we will have a stronger cluster of cleantech companies here because of it.