The world needs new energy resources—not only to offset the decline of our existing reserves but to support the rapid growth of emerging economies like those of China, India, Brazil, and Russia. The International Energy Agency estimates that resources yet to be developed or discovered could be needed to account for 50 percent of conventional oil production by 2035.
Discovering and unlocking those new resources will require a new generation of technology to be deployed at a global scale, and this technology must use existing infrastructure. That’s not only a tough technical challenge but one accompanied by often overlooked challenges of industry culture.
Whether our innovation ecosystem can meet those challenges is an open question. The energy industry has a (perhaps undeserved) reputation for deploying innovations more slowly than others. Most important, it is not yet known whether the model of combining university research with venture capital—so successful in semiconductors and Internet services—will deliver real innovations in energy.
Part of the problem is that for energy technology to reach its full potential, it must be introduced, tested, and deployed at a scale attained only by major industry players invested in methods that already have a long track record. Conventional wisdom has it that those companies are not receptive to adopting new technology or working with emerging companies, but behind this reluctance are cultural differences that can be overcome. Working hard to master these differences has enabled our company to find experienced partners open to commercializing new technology.
The challenge stems from the fact that the skills required to raise venture capital and start a company are different from—sometimes contradictory to—the skills needed to partner successfully with a large energy company. The teams at startups working on energy innovation will need both sets of skills, and they need to know that the swagger that helps attract venture capitalists hurts more than it helps with people at the energy giants. These established players won’t alter their existing methods without a high level of proof. To reach that point, energy entrepreneurs must patiently develop longer-term relationships with these companies.
The shale gas revolution illustrates that energy giants are quite capable of rapidly adopting new technologies that dramatically change the energy landscape. In just five years, the combination of horizontal drilling and hydraulic fracturing in unconventional shale resources has generated a surge in both proven reserves and production. Those techniques are being exported from Texas and Pennsylvania to the rest of the world.
Our vision is that future dramatic changes in energy resources will result when emerging companies connect with established players in an industry that has been the most competent in the world when it comes to deploying technologies at scale.
Joel Moxley is a member of this year’s TR35 and founder and CEO of Foro Energy, a startup commercializing high-powered lasers for drilling and other uses in oil, gas, and geothermal markets.