Suncor, Cenovus launch $100 million cleantech fund
The oilsands is tapping Silicon Valley talent to tackle some of its biggest environmental challenges.
Oilsands companies Suncor Energy Inc. and Cenovus Energy Inc. are set to launch a $100 million Evok Innovations fund in Vancouver Thursday in collaboration with BC Cleantech CEO Alliance.
U.S. technology entrepreneur Marty Reed will spearhead the drive to tackle issues such as reducing tailings ponds and steam-to-oil ratios.
“The fund takes advantage of the thriving scene in Vancouver around entrepreneurship and borrows from practices from Silicon Valley, and looks to build bridges between Vancouver and Alberta and also B.C. and Silicon Valley,” Reed said in a telephone interview.
Oilsands companies are feeling the heat of stricter environmental policies announced by the Alberta government last year and the global move to decarbonize energy sources.
Reed, who swapped the San Francisco Bay area for Vancouver in September, brought in other Silicon Valley talent in his four-member team and has spent the past few months with Suncor and Cenovus engineers to pinpoint key environmental problems facing the companies.
The 45-year-old Reed calls himself the “classic Silicon Valley entrepreneur,” having started and sold three start-ups before joining Berkeley, Calif.-based Roda Group. The companies’ investment in B.C.-based Axine Water Technologies and Inventys Inc. whetted Reed’s appetite for Canadian cleantech.
Evok aims to tap early-stage innovations focused on the oil and gas industry and reduce the time it takes to commercialize technologies. The investments must meet the “double-bottomline” criteria of reducing costs and lowering carbon emissions, Reed said.
Suncor and Cenovus are hoping that the Evok team can find innovative companies that may not meet the criteria of traditional venture capitalists but can help tackle some of their specific environmental issues.
“We can develop technologies within their companies, and it’s possible to see $100 million, $200 million, $500 million reduction in expense which would be quite a win for them, but on the traditional venture side might not have met the investment threshold.”
The industry has collaborated before through the Canadian Oil Sands Innovation Alliance, which has 13 Calgary-based companies sharing 814 technologies and innovations that cost $1.3 billion to develop. But COSIA focuses on non-competing technologies, which limits its effectiveness.
“The steam-to-oil ratio would not be on the table with COSIA, but it’s very much in our sweet spot,” Reed said.
The fund already has several hundred companies in its sights, and the first investment announcement could come within months, Reed said. While there is an early bias towards Canadian startups, the fund will cast its net globally to solve immediate challenges facing the oilsands.
“We are looking at technologies that can reduce tailings ponds, improve the upgrading process, reduce diluent, improve steam-oil ratio and particularly through the use of smart centres, big data and analytics, which are areas pinpointed by (Cenovus and Suncor).”
While the two oilsands players’ $100-million commitment “goes beyond greenwashing,” Reed admits the fund will not venture into areas that would hurt the oil companies.
“We have this governance structure in place whereby not only they put $100 million in this fund, they share the governance with Cleantech Alliance. And on top of that have hired someone like myself and my team —folks that are very committed to the double bottomline.”