The fourth GCV Energy conference was held virtually at the GCV Digital Forum rather than in Houston, Texas, due to the covid-19 disease.
Burger chaired the sustainability track moderated by Tom Whitehouse, chief executive of Leif Capital, and this foreword to the quarterly energy report is edited from their transcript.
Barbara Burger:
2020 has been a challenging year at so many levels, so I want to first start off and say that. No discussion of corporate venture can be had without that context.
So many things that we took for granted in 2019 have changed. The whole way we work, the health of so many people has changed and the economy has changed. Our industry has encountered numerous headwinds, both from a supply perspective, but also from a demand perspective. That has certainly given us a lot of challenges. Our company has put a strong plan and executed well through this, but it is challenging.
Now I get to CTV. I always have to mention the mothership before I get to CTV. So I am really proud of my organisation. Despite all of the things going on in their personal lives, the changes in how we work, the changes in how we engage, the ecosystem, other investors, the change in how we gather or not gather physically, they have done a really good job. They have stayed focused on our objectives and I think we have cared well for our current portfolio companies. We have added a few of them to the mix, so I think all good.
So let me back up and give you a little bit of framework. I will give you a framework on the energy transition and I will give you a framework on our investments. I think if you see the two of them then the fusion investment will not look so much like what, “what are they doing?”, but it will make sense. So, on energy transition: decarbonise the core business, incorporate renewables into our operations, invest in technology and scale to future energy verticals. So, three prongs, lots of good activity in each one, and there is a role for tech ventures, for startups, for the kind of work we do in all three.
Obviously the third one, invest in technology and then scale future energy verticals, is right in our sweet spot.
If you think about how we invest, we have two principal funds that we are investing out of. Now, these are a 100% Chevron-owned funds. But one of them is the core and that starts with our base business of Chevron. It looks to where we need to go to compete and win going forward, and so it invests in technologies that can help Chevron do that. Obviously, the Chevron use is a big key part of that. The other one is the Future Energy Fund, which launched in 2018. That does not start with our assets, that starts with the future energy system.
So, we are looking at all those innovation trends and we are asking the question: how are they going to play out relative to the energy system? How might they play out because it is in the future? And then what do we need to learn about them? Where is the intersection with Chevron? So, if you come back to fusion and you come back to some of our other investments, nuclear is seen to be a key part of the future energy system for that clean baseload. But the current technology and the current fleet has some real limitations. It has limitations on costs, on safety, on public perception. So, there is quite a bit of innovation in both fusion and advanced fission. The team has done a really good job in looking at that space. We chose Zap Energy as our first investment in that. You will see how it plays out.
[As to] what is different this time? First of all, I think the investor class is different. The investors know the time horizons and they know the scale, because if you have energy innovation and it does not scale, we might as well be playing my piano. It has got to scale because the energy system is big and the transition is not a small undertaking.
So, I think investors are different. I think there is a lot more support for the entrepreneurs. I am very pleased with all the incubators, the accelerators, at the university, government, non-profit level at cities. So, a much better ecosystem for them. I think the incumbent companies are making commitments and taking action in this area. Now we have been around for 21 years, and we were one of the few, but now I think there is a much broader sense among corporations and the current energy sector that we need to transition. So, I think all of those come together, and it is still not going to be easy. A breakthrough technology is needed. There are science challenges and engineering challenges, but I think we are much better set up than we were 10 years ago. I am also an optimist, but I look forward to seeing success out of this because frankly society depends on it.
