A decade ago, large investors in so-called
clean technology had a straightforward goal: finance companies that
would help eliminate the world's dependence on oil, natural gas and
coal.
But as profits from wind, solar, biofuels and other alternatives
consistently fell short of expectations - and as the fossil fuel
business boomed - things got complicated. Venture capitalists and
other investment funds started stretching the definition of clean
technology almost beyond recognition in an effort to make money
while clinging to their environmental ideals.
Today, clean technology investment funds are not trying to
replace the fossil fuel industry. They're trying to help it by
financing companies that can make mining and drilling less dirty.
The people running these funds acknowledge the apparent hypocrisy
but defend a more liberal definition of clean technology.
"Oil and gas will be with us for a long time. If we can clean
that up, we will do the world a great service," says Wal van Lierop,
CEO of Chrysalix, a Vancouver, Canada-based venture capital firm
founded in 2001.
Chrysalix still backs companies that fit the more traditional
definition of clean energy - including Bridgelux, which makes more
efficient light bulbs, and Agilyx, which turns plastic waste into
fuel.
But the firm, whose website boasts that it is "100 percent
focused on clean energy" is a backer of MineSense, which helps
miners operate more efficiently by assessing the quality of ore as
it is being scooped. It also supports GlassPoint, which helps
drillers extract more oil by using steam generated with solar power.
Environmentalists have mixed feelings. They welcome technologies
that reduce the environmental footprint of oil and gas development.
But they worry the newfound abundance of oil and natural gas -
and all the money that can be made helping drillers - has
distracted clean technology backers from what once seemed to be
their main goal: to make oil and gas a thing of the past.
Mark Brownstein, who runs the energy and climate program at the
Environmental Defense Fund, says "some don't have the stomach for
that and are simply going with the flow."
The shift has made even those who are helping to drive it squirm.
"We've wrestled with it," says Alan Salzman, Managing Partner of
VantagePoint Capital Partners, one of Silicon Valley's most
prominent venture firms focused on clean technology. "If someone
comes up with a more benign way of (exploiting fossil fuels), is
that a good thing or a bad thing?"
If fossil fuels become more palatable to society, Salzman says,
we may end up burning more of them.
Ten years ago it seemed as if the world was running out of oil
and what was left of it was in the Middle East. Oil and natural gas
prices spiked to alarming highs. And scientists showed that fossil
fuels were causing troubling changes to the climate. Pushing for an
end of the fossil age made sense for economic, political and
environmental reasons.
This had Silicon Valley venture capitalists drooling.
"Cleantech," as they called it, would be the next big thing. And it
was going to be big. These firms saw a chance to profit from what
many thought would be the biggest economic shift in history - from
fossil energy to renewable energy.
But the new energy technologies proved much harder to master than
