Oct 6, 2018

Ep 95: Kam Ghaffarian - Founder, Chief Executive Officer, X-Energy

Founder, Chief Executive Officer
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Show notes

1 - Early Aerospace Experience

Bret Kugelmass: How did you get into engineering?

Kam Ghaffarian: Kam Ghaffarian is originally from Iran and came to the United States in 1977 at 17 years old. One reason he wanted to come to the U.S. was to pursue his childhood passion, becoming a part of the space program. He received his double degree in computer science engineering at Catholic University in Washington, D.C. After graduation, Ghaffarian started working for large aerospace companies that supported NASA programs, starting his career at Lockheed supporting Goddard Space Flight Center. After Lockheed, he worked for Ford Aerospace. In December of 1994, Ghaffarian pursued his lifelong dream of owning his own company and started SGT with Harold Stinger. Ghaffarian felt that his inspiration drove him to actually move to the United States and pursue his dream. He always knew he had an entrepreneur bent, but he was inspired by how big the universe is and how small the Earth is, as well as President Kennedy and the U.S. mission to the moon. By the time SGT was sold, there were about 2,500 employees, 5,000 including subcontractors.

2 - Growth of SGT

Bret Kugelmass: Was there an inflection point in the growth of SGT in which you sat back and thought about how it became so big?

Kam Ghaffarian: Kam Ghaffarian is a firm believer that, if you don’t know where you’re going, any bus can take you there. You need to have a destination in mind as to what you’re trying to achieve and where you want to go. From day 1, Kam Ghaffarian and Harold Stinger’s goal was to have 1,000 people and do $100 million a year in ten years. Every enterprise should have a BHAG, as described by Jim Collins: a big, hairy, audacious goal. A self-fulfilling prophecy is creating a mindset and destination that brings dormant forces alive and propels one to get there. Ghaffarian started SGT in December of 1994. The goal was to do $100 million a year by August 1, 2005. By 2002, the company was $10 million a year, or one-tenth the goal, and 100 people, or one-tenth the goal. The dream is born in your mind and your heart, and that is where it dies. In August 2005, SGT did $102 million running rate, growing 10x from 2002 to 2005. Along the line there are dream busters. You have to imagine the destination you want to get to, believe it, and go make it happen. Ghaffarian would rather aim high and miss, rather than aim low and make it. He had a spiritual and consciousness growth that was growing in parallel with his business growth. Ghaffarian wanted to make the planet a better place to live and created a vision to advance the state of humanity and human knowledge. As a result of looking at bigger problems, his motivation became more about making a difference than making more money. Ghaffarian is now involved in 20 entities which carry this theme throughout.

3 - Energy’s Connection to Standard of Living

Bret Kugelmass: What are some of the other ways you can make a difference, aside from advancing humanity and knowledge?

Kam Ghaffarian: Kam Ghaffarian’s partner at SGT was also a pastor of a church while they worked at NASA. He met an individual from the Democratic Republic of the Congo who was asking if they would consider sponsoring orphans in Kinshasa. Ghaffarian agreed without hesitation and they have since sponsored hundreds of orphans, bought a building, and now has a school with 700 kids where they also get a meal. Ghaffarian loves the smiles he sees on the kids’ faces and the difference made is immeasurable. Ghaffarian believes that his experiences are not coincidences, but interconnected synchronicities. He would not have opened X-energy if not for the school in Africa. When he started the school and traveled to Africa, Ghaffarian learned that having power or electricity has a direct relationship to standard of living, such as clean water and education. Ghaffarian was inspired during a zero point meditation to connect what was happening at the school and what was happening with the planet, with a growing population and climate change and an increasing demand for electricity. He developed a philosophy that he needed to come up with an energy solution that was clean, safe, secure, and affordable. His initial idea was a hydrogen solution, but didn’t think the infrastructure is ready for a hydrogen economy. Ghaffarian very quickly came to nuclear because renewables can only provide a fraction of the electricity needed. Uranium and thorium are energy dense. The uranium on Earth is not naturally occuring, but came to the planet from star explosions.

4 - Creation of X-energy

Bret Kugelmass: What was the testing process for your idea once you decided upon nuclear energy?

Kam Ghaffarian: After his meditation in France, Kam Ghaffarian came back to the U.S. and talked to a couple of his senior engineers about his idea of giving back through nuclear energy. He paid the engineers to brainstorm on different concepts and research different assignments. Together, they came to the idea that hydrogen was not feasible and decided on nuclear. The next bridge was to decide what kind of nuclear. The four founding principles - clean, safe, secure, and affordable - directed this decision. Ghaffarian asked what kind of nuclear solution could be 100% safe. His engineers met with a professor at MIT, who showed them a pebble and taught them about TRISO particles and pebble bed reactors and prismatic reactors. This technology was intrinsically safe, which led to the formation of X-energy’s first solution in a TRISO-based type nuclear reactor. Ghaffarian was driven by his heart, his beliefs, and his dreams, not allowing perceptions of others to bother him. X-energy was officially formed in 2009. Ghaffarian did not know many people in the energy sector, but brought some experience from the NASA sector and wanted to bridge the two industries.

5 - Regulating New Nuclear Technologies

Bret Kugelmass: In what way, that you didn’t expect, was the nuclear challenge different that your other ambitious endeavors?

Kam Ghaffarian: Creating a successful nuclear company is multivariable and multi-factored. When building for space, NASA and FAA are involved, but there is no regulatory organization like the Nuclear Regulatory Commission (NRC). Nuclear needs a regulatory organization for safety reasons, but it is a complicated problem to solve. Energy needs to be balanced with economics and regulations. The technology needs to be strong, but also marry the business viability and economics and regulations. A part of NRC’s charter is to enable nuclear technologies. There is a misunderstanding that their only job is to be a regulator. Safety is incredibly important, but there are many improvements from the process perspective to get a design license so more technologies are able to flourish. Ninety percent of NRC’s budget comes from the applicants and only 10% is appropriated by Congress. Someone who submits an application to the NRC is uncertain about how long it will be there and how much it will cost. Ghaffarian proposed a fixed cost, fixed timeline process. If a new type of reactor has never been licensed, the NRC must have time to get educated and come up to speed in order to regulate. That cost of time should not be burdened by an applicant, especially a start-up company, and puts the country behind. The world is in a global energy race, similar to the space race. The U.S. is behind other countries and needs to have a collective consciousness to step up to the plate.

6 - X-energy’s Pebble Bed Reactor

Bret Kugelmass: What is the deployment schedule for nuclear?

Kam Ghaffarian: Other countries are not sitting still in the water and energy race. The U.S. needs to be even faster to get caught up to them, which requires different thinking from the private enterprise perspective and different thinking from the government side. Public private partnerships (PPP) are the answer and collaboration is needed to make deployment happen. Kam Ghaffarian’s vision is to accelerate deployment in order to be successful. By deploying a clean, safe, secure, and affordable solution, Ghaffarian hopes to change the world. His reactor design is gas-cooled, not water-cooled. The reactor has been testing multiple times and, once it reaches a certain temperature, the material turns itself off to be in a safe state. Society will no longer need to rely on fossil fuel as a way of satisfying the demand for power. This kind of solution changes the dynamic of how they operate. Current solutions depend highly on a grid. A large part of the cost in power is in distribution. If the power source can be moved closer to where it’s needed, distribution costs goes down and it creates less problems. Having solutions that are grid independent and less centralized is better for everyone. In many capital cities around the world, there is so much pollution that people cannot even see the sky. Kam Ghaffiarian supports marrying renewables with his nuclear solution; nuclear is an intermediary step towards a cleaner step such as hydrogen. In order to have a hydrogen economy and infrastructure, a heating source is needed, which nuclear could provide. X-energy’s reactor is a co-gen which produces electricity and processed heat. This heat could be used in desalination. Kam Ghaffarian’s inspiration to entrepreneurs is to figure out what gift you’ve been given and allow that music to be played. Following your passion and calling makes every day not feel like work.

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