Alternative energy, venture capital, and common sense

When it comes to solving climate change and reducing our nation’s annual $800 billion dependence on foreign oil, everyone seems to have an opinion: Solar, nuclear, clean coal, wind energy, natural gas, bio-fuels, hydrogen fuel cells, hybrid cars, and many other alternatives are advocated by various groups. Unfortunately, each group seems to believe that their particular solution or “pet project” is the only answer. This exclusivity leads not to cooperation for the greater good, but instead to warring factions among the alternative groups. Groups take shots at the competing alternative energy solutions calling them “not green enough” or “not viable enough” or offerring other critical commentary. We make little to no progress in our quest for cleaner, cheaper and more earth-friendly energy with this divisiveness.

One would hope that the venture capitalists would have foresight and leadership in this area. In my estimation, they do not. I watched a recent alternative energy conference attended by venture capitalists where the guest speaker (also a VC) asked how many of roughly 100 attendees had invested in an alternative energy company. Nearly all responded yes by raising their hands. The guest speaker then asked how many of them had actually spent time working at an alternative energy company. Very few hands were raised. The guest speaker then commented “you don’t know what you are invested in.” The VC community’s sizeable investment in ethanol confirms this as ethanol proved to be a “head fake” in the ongoing quest for a viable alternative fuel.  

Our Federal government is equally ineffective with regard to energy. The current administration, while arguably distracted with many pressing issues, has yet to pass a comprehensive energy policy. My local Congresswoman communicated to me that she was not in favor of House Bill 1835 (labeled the “Natural Gas Act”) since she is beholden to a 100% “green,” zero carbon footprint, alternative energy solution which, unfortunately does not exist. Again, the “all or nothing” or “my way or the highway” posture leaves our country in paralysis, a reality where we consume much more energy than we produce and the energy that we consume is extremely harmful to the planet. That sad reality will not get better any time soon with a Congress that either does not understand the alternatives, or is intractable due to political alliances.  When idealism trumps pragmatism,  America loses.

I have had the pleasure of working with an alternative fuel company American Gas & Technologies, Inc. (“AG&T” at over the past three years. The company has developed a patented technology that allows 140 octane liquid natural gas (“LNG”) to be produced onsite at fleet operations and used as a fuel alternative to gasoline. The process uses only natural gas feedstock from the existing underground natural gas distribution system which allows the fuel to be available at the refueling station without trucking – a very sustainable model. Think of taxi cabs or municipal buses that are heavy fuel users and run circuitous routes. We estimate that the average taxi cab operator, with 300 vehicles, would save nearly $1 million per year in fuel costs, all without any cash outlay for equipment and vehicle conversions.

This alternative fuel solution is not proposed to be the end all. It is intended to be one of many alternative fuel solutions. Surely there is a place for electric and hybrid automobiles where the electricity is produced from clean sources.  There are several other alternatives that are likely to become effective in the near future, including fuel cell driven long-haul trucking. The point is that natural gas is inexpensive, domestically plentiful, and burns 30 to 80 percent cleaner than gasoline, depending on what criteria you are evaluating. It is here and now, “shovel ready,” economically viable, and at least partially addresses our dependence on foreign oil as well as climate change. But with the highly fragmented and polarized views on alternative energy as described above, this small company struggles to obtain sufficient funding to roll out this project.

Hopefully the White House, Congress, existing energy companies, and the investment community will eventually take a more magnanimous position by setting aside biases, personal agendas and pre-conceived notions in order to embrace technologies like that offered by AG&T and other alternative energy companies. The solutions offered by these innovative companies, while perhaps not perfect nor permanent, can combine to make a significant difference in our country’s struggle to combat climate change and end the U.S. dependence on foreign oil. The perfect and permanent solution may be around the corner in the form of nuclear fusion or hydrogen fuel cells; however, the perfect solution is not yet here. In the meantime, we should embrace these partial solutions that move our energy consumption and policies in the right direction.

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