This month, we’re talking about the impactful new rules on climate disclosure from the Securities and Exchange Commission, the energy impacts of Russia’s war, new investments in an old energy source, and how innovation is moving away from the coasts.
Climate Disclosure: SEC Edition
I think it’s going to be a big deal! But what does it mean for climate tech companies, and what does it mean for climate action more generally? Glad you asked: check out this blog post we posted recently to dig in further.
Also, if you’re interested in learning more about this topic, Evergreen’s next event will examine the implications of this SEC’s move for climate innovation – learn more and sign up here.
Credit: Shutterstock/DC Stock Photography
Russia’s Energy Ripples
In response to Russia’s invasion of Ukraine, the United States announced a Russian oil import ban. The US only imports a small percent of overall oil from Russia today, so not a huge disruptor, although a lot of Russian oil products that do come our way are very heavy, gunky product that is being brought in to be processed in the gulf area, where there is a lot of capacity to process some of these heavier types.
Meanwhile, the EU is announcing plans to speed their transition away from Russian gas, with a goal of disconnecting before 2030 overall, and dropping Russian imports by 75% by the end of 2022 (which would be a dramatic drop if realized). In addition to boosting renewables, this should provide even more investment and support for hydrogen in Europe as well.
These Russian energy politics issues also puts a spotlight on liquified natural gas (LNG). The US has a lot of cheap gas, and more LNG exports can really help Europe to disconnect from Russian imports. This leads to a complex set of policy choices – we’ll need gas for a while (especially Europe, today), but LNG export facilities cost billions of dollars, so there’s a legitimate concern of whether investing in LNG today locks in this infrastructure for the distant future.
Geothermal is HOT
Axios flagged that oil services company Nabors Industries has made four venture investments in geothermal companies in the last nine months: Quaise, GeoX Energy, Sage Geosystems, and GA Drilling. And this is aside from another couple of geothermal companies who have been well funded recently – Fervo and Eavor.
Credit: GeoX Energy
What’s going on here? New innovative approaches are taking a chapter out of the Harder, Better, Faster, Stronger playbook: they are generally looking to access harder to access resources, leveraging better processes that stem from innovation in oil and gas drilling, and aiming for resources that are deeper and hotter for stronger geothermal energy resources that are more affordable over their lifetime (I’m sure there’s something happening faster to but I was an economics major, not an engineer, so I’m stuck on that one).
While geothermal doesn’t get the headlines, we know we need a whole bunch of low carbon power solutions to enable the energy transition. Some of that can be enabled by pairing renewables with long duration storage, but having other dispatchable resources like geothermal in the mix will be crucial as well.
Innovation Is Moving
The Wall Street Journal looked into research on how companies, people, and jobs are shifting away from coastal tech hubs. Silicon Valley is always going to be Silicon Valley, but we’re moving to a future where there is overall a less concentrated distribution of innovation and capital. Instead of around 40% of venture funding, maybe the Bay area ends up with something more like a third – still much more than anywhere else, but with that difference distributed to dozens of locations across the country, from Salt Lake City and Atlanta and Austin to Chicago and Columbus and Minneapolis.
Who is Drinking Whose Milkshake Now?
North Dakota’s biggest Oil Driller, Continental Resources, committed $250 million towards the development of a carbon capture pipeline project, one of two major CO2 pipeline projects in the Midwest.
Credit: There Will Be Blood – Paramount Vantage
What’s going on here? The federal government increased the tax credits for carbon sequestration. Lo and behold, companies that already know a thing or two about pipelines have decided to develop sequestration infrastructure. It’s almost like incentivizing the behavior we want can have a positive impact! Link
Y Combinator had 31(!) climate tech startups at their latest demo day. Link
Ford is splitting its vehicle business units into EV and legacy auto units, branded ‘Model E’ and ‘Ford Blue.’ This setup should be pretty complementary for the company: the future focus on electrification with Model E, while Ford Blue harvests profits primarily from internal combustion trucks and SUVs. Link
The Biden Administration is tapping the Strategic Petroleum Reserve (again) to help address gas prices. Link
On a related note, the New York Times examined where efforts to reduce gas prices and address climate may come into conflict. Link
The Administration also released new vehicle efficiency rules. These undo the Trump era rollback and increase requirements, but of the options that were on the table, this plan is not the most aggressive one. Link