Can a venture capital firm investing in mining or oil and gas exploration and production (E&P) still claim to be a greentech investor? Are traditional energy markets better targets for cleantech VCs and disruptive innovation?
Chrysalix, a long-standing cleantech VC firm, just added Jean-Michel Gires as a venture partner based in Calgary. Gires is the former president and CEO of Total E&P Canada and brings experience in heavy oil and mining, as well as sustainable development. He was Co-Chairman of the Oil Sands Leadership Initiative and Canada’s Oil Sands Innovation Alliance. Gires was also involved in Total's strategic investments in Gevo, Amyris, Ambri (the former Liquid Metal Battery), LightSail, Konarka, and SunPower.
Chrysalix is looking for innovative solutions in oil and gas, chemicals, metal, mining, and power utilities. That's what cleantech looks like to this VC firm.
Chrysalix is "interested in transformational breakthroughs wherever big industry faces tough energy challenges," in the words of Charles Haythornthwaite, a VP at the investment firm. That means the firm's portfolio includes investments in metal ore mining efficiency (MineSense) and enhanced oil recovery assisted by concentrated solar power (GlassPoint).
Dr. Wal van Lierop, the CEO of Chrysalix, told GTM that his goal is "making cleantech invisible as the common way of doing business."
So does the DG and renewable energy shift happen slowly at a Smil-like pace -- requiring decades before catching a significant chunk of the market? Is an all-of-the-above approach the only approach?
Or can distributed solar power, wind power, intelligent efficiency, and energy storage change the time frames for energy transitions? Can VCs leverage new strategies to disrupt channels to the customer? (Attend our NextWave Greentech Investing event next month for a deep dive on this topic.)
"I think we have a huge transition issue," said Gires, adding, "It’s clear that traditional oil and gas are here to stay, but if they want to produce sustainably and responsibly, they have to make cleantech a part of their business strategy."
Gires added, "We need to be pragmatic about what we really mean about sustainability, we think we can help [make industry] more sustainable -- instead of dreaming about new solutions." He continued, "We are not going to be successful unless we work with strategics. We have to work with the players in the existing industries."
Gires said in a statement, "Most of the new oil and gas developments are more complicated to design and implement, more expensive to deliver, and have a much more significant footprint than the traditional projects oil and gas pursued in the past. And this is why new solutions are welcome, if not necessary; given the diversity of the challenges, many of them won’t necessarily come from the oil patch, but will be developed from within and for other industries unrelated to the sector. This gap in innovation within oil and gas opens up a long list of opportunities for VC, from which may emerge new processes, new control and monitoring systems, better water treatment and land reclamation, drastic emissions reduction, better reuse of sub-products -- the possibilities are endless."
The Obama administration's Climate Action Plan sees the power sector as the single largest source of CO2 emissions in the U.S. and the place to focus on to make significant reductions in CO2.
Chrysalix looks to raise a new fund later this year.