Large oil and gas companies are some of the most active investors in the cleantech space, using new technologies to improve operational efficiency, according to research and advisory firm the Cleantech Group.
Cleantech start-ups and oil and gas producers would not appear at first glance to be a good fit for fruitful corporate partnerships. The growth and success of new clean energy technologies could pose a threat to the market share of traditional fossil fuel producers.
But surprisingly, three of the ten most active corporate investors in cleantech start-ups are also among the world’s largest oil and gas companies, according to data from the Cleantech Group’s i3 database, which tracks cleantech companies, markets and investors.
Most Active Corporate Investors in Cleantech, 3Q 2011-2Q 2013
In a ranking of the top ten corporations by number of cleantech investments over the two years ending in June 2013, the Cleantech Group found that ConocoPhillips was number two, and Total and BP six and seven, respectively.
“All three are active clients on i3,” Cleantech Group CEO Sheeraz Haji told Breaking Energy. “They have used the platform successfully to source companies, validate them and really connect with innovation that’s out there.”
Critics of oil and gas companies often claim that they have gone to great lengths to prevent the development of promising energy technologies that threaten their dominant position in energy markets. But Haji pointed to several instances of oil and gas companies using clean energy technologies to cut costs and improve efficiency in their own operations.
“They are not doing this out of the kindness of their hearts or to appease environmentalists,” Haji said. “They are engaging with startups and partnerships with them to drive business value through growth, solving a water challenge or getting oil out of the ground more efficiently.”
ConocoPhillips and BP were both members of a consortium of investors that committed $9 million to carbon capture and sequestration firm Skyonic for a pilot CCS project. “The Skyonic deal is an instance of them getting really ahead of the game on carbon utilization and being a leader,” Haji said. “There’s zero intent to squash that innovation.” Total was one of a group of investors to invest $5 MM in energy storage startup LightSail, and has also committed funding to desalination firm NanoH20.
Reputation may also play a role, as large companies come under more pressure from investors to be “cleaner and “greener”. “
“Looking good and being greener can be part of it,” Haji said. “There is a real business reason for companies to think about their top-level reputation, or to really solve environmental challenges. We’re certainly seeing this among oil sands developers in Canada, who may have underestimated the environmental challenges like water and waste, and have gotten very serious as an industry to get out in front of it.”
“It really is about a license to operate,” Haji said. “They will not have that license to get their oil to market without it.”
These corporate partnerships are becoming more commonplace. The Cleantech Group currently tracks 18 primary business sectors in its i3 database, but “we’re increasingly tracking oil and gas as a separate segment”, Haji said. “We’re looking at what’s going on to make oil and gas less resource-intensive from waste to efficiency to Smart Grid, you name it.”
