Corporations are some of the few types of investors still pursuing new opportunities in greentech investing. Here’s the latest: natural gas company Chesapeake Energy announced on Monday that it plans to invest up to $1 billion into technologies that can use natural gas instead of oil. The fund, called Chesapeake NG Ventures, will reportedly use between one percent to two percent of the company’s estimated yearly budget for drilling.
Chesapeake’s first two investments include $150 million into natural gas vehicle fueling company Clean Energy Fuels, which if you remember counts T. Boone Pickens as a Director (he also founded the company that later turned into Clean Energy Fuels). The other investment is $155 million into stealthy biofuel company Sundrop Fuels, which gives Chesapeake a 50 percent stake in Sundrop.
One billion dollars dedicated to new natural gas tech could have a substantial influence on some of the biofuel, fuel cell, or natural gas vehicle startups out there. Fuel cells, like Bloom Energy’s, can use natural gas to make electricity; there’s a variety of biofuel firms that can use natural gas as a feedstock to convert into renewable fuels’ and there are a few auto makers that are looking to develop better natural gas cars and fueling infrastructure.
Strategic cleantech investing is one of the bright spots in the seemingly depressed greentech industry. Oil companies Exxon, Chevron, and BP have made minor investments in biofuel companies, oil refiner Valerohas made some more substantial bets as well, and chemical giant Dow has backed a variety of startups recently. GE and Intel Capital have been the more established investors in the cleantech space. And there’s always the group approach, which NRG Energy, ConocoPhillips have taken. A GM event launched an inaugural $100 million auto tech fund.
Corporations that have energy interests can use VC arms to find the latest innovative technology, and then either invest and buy the tech, or enter into exclusive commercialization deals. While a lot of these early companies are risky, from the corporate’s perspective the investment is often times relatively small compared to its massive balance sheet. Chesapeake’s investments are some of the bigger ones coming out of the gate from a new investor — often times several million dollars is more standard.
Image of natural gas car at LA Auto Show.