In leading the cleantech practice for the venture capital firm Early Stage Partners, I’m sometimes asked how I define “cleantech”. I’ve given this question a fair amount of thought, and generally am publicly articulating my answer as “technologies that address the critical resource needs of the 21st Century, most prominently, energy supplies and clean water.”
It’s a broad definition, and one that probably doesn’t please the most ardent environmentalists, many of whom no doubt think that cleantech should only address energy efficiency and renewable energy (and any enabling technologies). While EE and RE are topics to which I am personally committed, neither am I dogmatic and insist that they are the only worthy energy-related areas of cleantech.
For as much all of us would like to reduce emissions and fossil fuel use as much and as quickly as possible, there is no plausible scenario that suggests that fossil fuel use will cease in any time frame shorter than several decades. Accordingly, encouraging the shift to lower-emitting fuels (i.e., gas in lieu of coal or oil) or reducing the environmental impact of the fuels that are produced and used is, in my view, a worthwhile area of focus for cleantech practicioners.
Oil technology (a.k.a. “oiltech”), in particular, is receiving a lot of attention these days, reflecting the continuing growth in global demand for oil — which continues to be the dominant energy source for transportation, and will be for a long time unless/until biofuels, natural gas and/or electrification can make significant inroads — in the face of ongoing elevated oil prices and the corresponding market push to source petroleum from more expensive and difficult resources. In short, this means deeper — both onshore and especially offshore — and “heavier” oil patches.
This represents an interesting nexus of connection between the oil companies, mostly the “supermajors”, and the entrepreneurial venture world. As profiled in a recent article in the Wall Street Journal, it is challenging to get these two types of enterprises to work together productively, so to help bridge this gap, the Oiltech Investment Network has been formed.
As distasteful as it might be to some, I expect this oiltech area to be a major segment of the cleantech realm for quite awhile. If it’s any consolation, to the extent that good venture returns can be earned by cleantech investors from the oiltech area, the future proceeds can be used in part to invest in innovation in the “more purely green” cleantech segments.