This week rounded out the final days of the Consumer Electronics Show where retail buyers, wholesalers, resellers, executives and investors converged on Las Vegas to get a glimpse at “the next big thing” in tech. With more than four decades of success, CES reaches global markets, connects industry participants and allows consumer technology innovations to push margins to new levels.
But where the usual suspects like LG (KRX:003550, Financial) and Sony (SNE, Financial) continue to show their advances in thinner TV screens and the newest in surround sound, a new group of tech has begun to catch attention for more of a global impact: Clean Tech.
In fact President-elect Donald Trump could have unknowingly set the stage for clean, green energy technologies to thrive during the coming term. Though it wasn’t one of the novelty air purifiers that took notice at CES, one industry that has been gaining a lot more attention on a global scale has been technology involving carbon capture.
Processes that include this technology involve pulling carbon dioxide out of smokestacks and industrial procedures before the climate-altering gas can exit into the atmosphere. Trump has continuously denied the mounting scientific evidence that supports climate change. This is also a view shared by many of his Cabinet nominees. But despite this being the case, the supporters of clean air, water and atmosphere seem to be expanding their reach far beyond what naysayers have mumbled. It has been on a global scale as well with carbon capture and storage (CCS) taking up much more focus from investors.
In fact, the Department of Energy alone has invested more than $4.8 billion in development and testing since 2009. And now, putting a price on carbon to force businesses to cut emissions will help to create a market for CCS, energy experts say. Companies within the industry are now looking into carbon capture and utilization (CCU) where products and byproducts of carbon capture can be repackaged or repurposed for industrial applications.
The first large-scale U.S. “clean coal” facility was made operational on Jan. 10 by energy firm NRG Energy (NRG, Financial) and JX Nippon Oil & Gas Exploration Corp. According to reports, “the plant will draw 90% of the carbon dioxide from the emissions produced by 240 megawatts of generated power.” This is enough to capture 1.6 million tons of carbon dioxide each year — that's like driving 3.5 billion miles, or the equivalent of the carbon dioxide from generating electricity for 214,338 homes.
In a statement to the Washington Post, NRG President and CEO Mauricio Gutierrez said, “There are not many coal plants that are being built these days. We think that actually having an experience in installing a [carbon capture and storage] technology in existing coal plants will have a pretty significant application in the current plants that exist throughout the country, and for that matter, throughout the world.”
And Trump’s nominee for secretary of state, Rex Tillerson, the chairman and CEO of ExxonMobil (XOM, Financial), doesn’t believe that climate change is a fairy tale concocted by phony scientists in underground lairs. The crazy part about this is that the U.S. could be far behind what the rest of the world is preparing to do. CCS and CCU continue to gain greater support outside of the U.S. as countries move to meet the emission reduction targets of the Paris agreement, proponents of the technology believe.
China has become a big market for CCS because it depends heavily on coal for energy and has repeatedly expressed interest in using CCS and CCU to meet its Paris targets, says Matt Gray, senior utilities and power analyst for the nonprofit financial think tank Carbon Tracker, in a new report. The country’s political system also makes it easier for CCS to take off.
The oil and gas sector, which is directly responsible for 5% of manmade greenhouse emissions and the use of its products for another 32%, is under growing pressure from investors and the general public to help fight climate change. In response, 10 of the world’s biggest oil companies, mostly European companies such as Total (TOT, Financial), BP (BP, Financial) and Shell (RDS.A, Financial) pledged to invest $1 billion to develop climate-friendly technologies, including a large chunk for CCS.
Another company focused on CCS has just begun to tap this market. On Jan. 11, Mantra Venture Group (MVTG, Financial) announced that it had been invited to present at the Canada-China CCUS Forum and Mission, which is being held in Beijing and Shanghai. The main purpose of the Mission is to connect leading companies in Canada (who are focused on carbon capture and utilization) with Chinese government and industry leaders in order to further grow commercial partnerships for new CCU technologies in China.
Mantra owns the intellectual property applied for in WO 2007/041872, titled "Continuous Co-Current Electrochemical Reduction of Carbon Dioxide." In short, this “ERC” technology has given the company the ability to chemically convert carbon dioxide to a variety of products including formic acid, carbon monoxide, formaldehyde and hydrocarbons such as methane and ethylene.
As a stand-alone, ERC has shown to be a solution to meet the carbon reduction commitments of industrial establishments. Mantra’s patent has been awarded in India, China, Australia and Canada and is currently under review in the U.S. and Europe. According to the company, several additional patent applications pertaining to the ERC process have been filed since the original as a result of ongoing experimental work.
“If you don’t have CCS, the chance of success goes down, and the cost of success goes up,” Julio Friedmann told the New York Times. Friedmann is an expert at the Lawrence Livermore Laboratories in California and a former Energy Department official. “If you do have CCS, the chance of success goes up, and the cost of success goes down.”
Statoil ASA (STO, Financial), a seemingly unlikely participant in this industry, just received an upgrade from Zacks Investment Research. Highlighting the company’s financial health and new projects, analysts at the firm along with others like RBC Capital, JPMorgan and Morgan Stanley gave the company an upgraded rating.
Traditionally Statoil has focused specifically on oil and gas, but one of its subsidiaries, New Energy Solutions, focuses on wind parks, carbon capture and storage in addition to other renewable energy and low-carbon energy solutions. The goal has been to generate more energy for a growing population while emitting less greenhouse gas, but this requires enhancements in technology. With ramped up production, Statoil has managed to study the impact of carbon capture and storage at its Sleipner field for 20 years having safely stored 16 million tons of carbon emissions.
“Statoil is a world leader in carbon-efficient oil and gas production. This is the result of determined efforts over decades. The carbon intensity of our upstream production is currently around 10kg per barrel of oil equivalent, compared to an industry average of 18kg. We have now set ourselves a target of reducing that to 9kg by 2020. Indeed, the Carbon Disclosure Project ranked Statoil in first place for readiness for a low carbon future among oil and gas companies,” said Bjørn Otto Sverdrup, senior ”¨vice president, Sustainability, at Statoil.
In the end if the U.S. government shows less interest in reducing the nation’s carbon footprint under Trump many industry officials say they are anticipating finding a ready and growing customer base from companies around the globe, where the danger of climate change is fully recognized. With this will come attention from the street.
Disclosure: The author owns no shares of any company mentioned in this article.
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