Thursday, December 11, 2008

Oil Execs on the Future of Energy Costs

Reported at the Environmental Leader

See the graphic below. The study was based on in-depth phone interviews with more than 50 oil and gas professionals, most holding C-Suite positions at petroleum companies with annual revenues of $100 million or more.

Of note to me. The low number of petroleum executives that believe petroleum is a sustainable energy source. I would really like to know what the motivation for this answer would be. The environmental sense of "sustainable" in reference to CO2 and impact on the environment or the actual long term production (meaning that they can sustainable keep pumping oil out of the ground keeping up with the actual demand for the product).

Usually when oil and gas people talk about sustainability they talk about actual production. Sustainable production is keeping up with demand. So they usually refer to petroleum as a sustainable fuel. Contrast this with environmentalists who refer to "sustainable" as meaning little or no impact on the environment.

I also see this as an interesting contrast with the feelings about US energy independence. If Oil is not sustainable what would be there belief for energy independence? I would assume biofuels development or maybe just something else (those in energy tend to look at technology as an open ended box of hope).

Are these execs saying 'it'll all work out some how' or do they have a consensus inside the industry about an expected future for US energy.

Tuesday, December 2, 2008

The Future of Algea - Off-Take Production

The future of algae is finding someone willing to pay you to play with it.

I've talked to dozens of start-up entrepreneurs with dreams of phytoplankton business. All these business models with the hopes of developing a new crude oil for the next century. The "crude dreams" of oil production from an endless uber-productive super-algae that would feed the humanity protein as well as feed our insatiable vehicles carbohydrates distilled into ethanol and fats reacted into biodiesel.

The big issue though. How do you pay for the capital cost of a algae bio-reactor? The device that will take water, light, CO2 and make the bugs into an industrial input. Will angels and VC pay for the magical devices that will make algal goo. This goo in turn being cut, distilled, processed, reacted and made into the endless variety of products that we currently source from petroleum.

Deep pockets in this market though are tough to come by. What is now looking apparent is the need for someone already paying to deal with algea. A current cost stream begging for a better solution.

One such industry is commercial fish farms. To that end I came across a recent article that caught my eye. Though this is not a unique idea its still one to watch. What makes it innovative is the fact that the technology might actually work. In the word of biofuels technical talk is cheap and demonstration is worth millions in Federal funding.

From an article from
Under PetroSun’s BioFuels Aquaculture Lease Programme, participating farm operators would receive a rent incentive and monthly royalties in return for access to their pond algae. In future, farmers could also gain additional benefits from a carbon credit program, the company said.
PetroSun (a leader in algae technology in the US) has announced what I would call an interesting and very viable business model. To co-locate with fish farms that have an algae maintenance concern. Instead of these farms paying the internal cost to deal with algal growth they will get a return for partnering with PetroSun to create value from the biological reality association with commercial aquaculture.