Integrating new technologies that can facilitate extraction, minimize environmental impact and positively impact a company’s bottom line are increasingly sought after and new business models that involve multiple stakeholder engagement can expedite the process. A Bain report highlights development of “globally competitive clusters” defined as geographic concentrations of interconnected companies, specialized suppliers, service providers and associated institutions in related sectors to increase productivity and lower the cost of doing business. In another example, national oil companies play a big role in driving technology development. Brazil’s Petrobas has developed leading-edge technology for deep-water exploration, development and production.
While technology deployment represents huge business
opportunity, commercialization of technology can
pose a number of legal challenges to companies in the energy industry and those
that are approaching the energy industry. In particular, there are key issues
that every company should be aware of, for example: (1) the consequences of
public disclosure; (2) the consequences of a failure to define ownership of
technology; (3) the difference between trade secret and patent protection and
the impact on talent acquisition; and (4) the challenges that may arise from
employee developed technology - just to name a few. Beyond the intellectual
property issues, testing technology under real world conditions can raise
challenges in the regulatory arena. For example, achallenge can arise when an early stage innovator asks a
utility or a company in the extractive industry to modify an existing permit so
that they can test technology under unique parameters. In effect, the innovator
is asking the utility to put their permit or “stack” at risk, a scenario
referred to as “stack risk”, and asking the utility to accept the uncertainty
of the regulatory process.
It's further no surprise that access
to financing is often a barrier to these emerging companies. Power generation
and natural resource extraction are cost intensive industries. For some
technologies, the fully deployed cost could be $200-$300 million. A number of
energy related venture capital firms fund promising startup companies in energy
technology, materials and related businesses. Large corporations fund some of
these venture capital firms and many have created venture funds of their own. Chevron
Venture Capital for example, finds and makes investments in
early-stage companies offering technology valuable to Chevron, then helps
Chevron business units implement that technology. Chevron Venture Capital
searches for technologies that will enable Chevron to operate more efficiently,
expand operations, or launch viable new businesses.
More specifically, Chevron seeks investment opportunities in four critical
and broad categories, namely: the spectrum of oil and gas (including
infrastructure, enhanced oil recovery and water remediation to name a few),
emerging/alternative energy, advanced materials, communications and networking
to support industrial and remote applications and information technologies.
Shell created Shell Technology Ventures to promote and
accelerate advanced technologies and game-changing innovation. The Shell
Technology Ventures team invests in companies across the energy sector to speed
up the development and deployment of new technologies that they foresee will
complement their business. Shell seeks to make investments in early-stage
technology companies that accelerate deployment of oil and gas technologies,
investments in early-stage technology companies and projects focused on future
energy technologies, as well as Shell spin-off technologies.
For technology companies, the ultimate goal is to move from
proof of concept to market integration. There are a number of organizations
that were established to assist with market confirmation and to accelerate
deployment while also often providing additional access to capital. It is also
important to note that not all innovation involves new technology and sometimes
the fastest solution is adaptation of existing technologies. The Oil
and Gas Innovation Center was established to identify new technology
ventures that might apply to the oil and gas space. The Oil and Gas Innovation
Center also provides the opportunity for emerging technology to confirm with
industry a need for their technology solution another critical element to commercialization.
Another organization that recognizes
the importance of adaptation of existing technologies is the Research
Partnership to Secure Energy for America (RPSEA),
a non-profit established to cooperatively find solutions to energy production
in the United States and offer funding opportunities in specific technology
areas. “Their mission is: to facilitate a cooperative effort to identify and
develop new methods and integrated systems for exploring, producing, and
transporting-to-market energy or other derivative products from ultra-deepwater
and unconventional natural gas and other petroleum resources, and to ensure
that small producers continue to have access to the technical and knowledge
resources necessary to continue their important contribution to energy
production in the U.S.”
In summary, the energy industry
presents huge opportunity for new technology ventures. It is critical however,
for companies to protect their intellectual property, define ownership up-front
and confirm that their solution directly comports with the identified problem.
At de la Torre Law, LLC we
understand intellectual property and the energy industry. We can help you
confirm opportunity and protect your interests. Contact us today to learn how.
