How the Next Wave of Innovation is Following the Unconventional Fuels Revolution
Against the backdrop of a boom in unconventional fuels, an increasing number of start-ups are developing solutions to both decrease operational risk and reduce the environmental footprint of the Oil and Gas industry.
In the 2012 and 2013 editions of the Global Cleantech 100 report, which sheds light on the world’s top cleantech startups, we took note of the emergence of “cleantech going inside the Oil and Gas industry.” As we embark into the research for our 2014 report, we expect that this innovation cluster will continue to permeate the list of the world’s 100 most promising cleantech companies. Largely linked to the boom in ‘unconventional fuels’ production, startups are increasingly interested to manage the operational and environmental risks of hydraulic fracturing or coal-bed methane and oil sands extraction at different stages of production.
Oil and Gas corporations have been similarly eager to partner with startups that could help them streamline their upstream exploration and production (E&P) businesses. In the past three years, ConocoPhilips has invested more than $33 million in 5 startups that help them increase the performance and safety of their drilling operations (Ziebel, drillMap, LUX Assure, Ciris Energy and Blue Spark Energy). LUX Assure (UK), for example, provides tools to monitor and optimize the level of chemicals present in the wells (the use of chemical additives is a crucial – and controversial – aspect of hydraulic fracturing). Total Energy Ventures is another corporation actively investing in startups like WirelessSeismic (USA), which provides real-time data on seismic activity to address the risks of small earth tremors linked to hydraulic fracturing or horizontal drilling operations.
Ciris Energy (USA) and Siluria Technologies (USA), both Global Cleantech 100 alumni, exemplify another innovation area applied to Oil and Gas: the conversion of traditional fuels into clean liquids using non-polluting methods. Ciris Energy enhances natural gas production by activating microbes in spent coal mines to produce coal-bed methane. Siluria Technologies also promises to change the way we think about fuels, by using its proprietary catalysts to transform natural gas into clean synthetic chemicals and transportation fuels.
Additional examples abound in the downstream Oil and Gas distribution segments. OsComp (USA), a new entrant in the 2013 Global Cleantech 100, is betting on a system of trailers that carry natural gas from compression sites to the customer’s door at a cost lower than traditional transit infrastructure. In early 2014, OsComp received $6 million of Series B funding from Energy Ventures and Chevron Technology Ventures.
Between new operational challenges, uncertain well economics and increasingly stringent environmental constraints, cleantech innovation will continue to be in high demand by the Oil and Gas industry. With unconventional fuels production running apace in North America, other parts of the world will likely follow suite, and the demand for niche technologies that help cleanup, monitor, and transport inherently ‘dirty’ operations will continue to rise.
We are certainly keeping an eye on this space!