The Wall Street Journal’s third annual ECO:nomics conference: Creating Environmental Capital wrapped up last week and I’m pleased to report that it delivered on the promise of frank, highly strategic, executive-level discussions. The conference will return next year; here’s hoping that we have some new energy and carbon legislation in place by then and that the focus continues to shift from risk management to more transformative approaches in which sustainability is viewed a business opportunity.
Some parting thoughts from the conference:
The potentially revolutionary
Algae that feed on carbon dioxide, using sunlight to fix the CO2 into hydrocarbons that can be refined into gas and diesel just like what comes out the pump today: can/should they be genetically engineered for enhanced productivity? BP and Exxon are placing big bets on J. Craig Venter’s work in synthetic genomics. Interviewed at the conference, this “life designer” goes beyond biomimicry and creates new organisms though the “software of life,” DNA.
Cost parity with existing oil-based fuels is a goal, but scalability is currently the obstacle. Furthermore, Venter suggested that this may be a moving target since their success could bring down the demand for and cost of oil. Venter’s work doesn’t stop at alternative fuels, but he acknowledged that the outcry over genetically modified foods was one reason to start there. He envisions a whole new industry based on technologies in synthetic genomics and synthetic biology more broadly, limited primarily by our imagination and knowledge in the design process: “within a decade there will be very few processes dependent on natural organisms.” Bioethical and control issues here should make for some lively discussion.
Immediately following Venter in the conference lineup was KR Sridhar, CEO of Bloom Energy, a last minute addition to the program. The recent unveiling of the “Bloom Box” has generated intense curiosity and excitement. The differentiators of this next generation fuel cell technology (e.g., low cost materials, fuel flexibility, reversibility) would be particularly relevant as an affordable off-grid energy solution for developing nations. Bloom is also considering many potential applications for the “high quality” waste heat.
Don’t forget about water
A session on water with Patricia Mulroy, General Manager, Southern Nevada Water Authority, was an oasis in the energy-focused conference. Mulroy shared her experience dealing with severe drought in Las Vegas, where 90% of the water comes from the Colorado River. Partnership with the business community was essential to instituting a tiered pricing structure, in which rates rise steeply with increased usage, to promote conservation. In addition, because 70% of water was used for lawns and landscaping, they began paying customers to remove their grass, investing $120 million so far in these rebates. Mulroy admits that “paying people not to buy our product” is “not greatest business plan in the world,” but today, despite growth, they use a third less water than in 2002. Asked if these policies could be applied elsewhere, she replied that “nothing changes until people are confronted with a crisis,” adding that if the changing hydrology of the Colorado River system is climate change driven, “Western states are in for an enormous wake up call.”
Mulroy lamented that the same enthusiasm, venture capital investment, and innovation around energy has yet to be applied to water. Some challenges are that water tends to be publically run, is rarely market priced, and generates strong emotional reactions in people. It is a “world of diplomacy.”
Going forward, what are some legendary VCs excited about?
John Doerr: “Solid state ways to be disruptive in energy storage.”
Paul Holland: “The combination of the open internet and this upgrade of infrastructure around the smart grid, this notion of an energy web.”
Vinod Khosla: Large scale energy storage for mobile and stationary power; revolutions in internal combustion engines; bioplastics; biomaterials; and precision agriculture.