Is This The Future Of Green Energy?
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France’s planned energy law will mobilize about €10 billion (US $13.4 billion) in investment through tax credits and low-interest loans to spur efficiency and renewable power, Environment Minister Segolene Royal said.
If all energy production channels were employed, the United States has sufficient resources to eliminate all coal, gasoline and diesel combustion in all demand sectors and replace them with natural gas, wind and solar electricity firmed and shaped with…
By capping carbon emissions, selling permits, and returning the resulting revenue to everyone equally, this “Cap and Dividend” approach achieves the greenhouse gas reductions climate scientists tell us we need to prevent the dangerous conseq…
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Other than drilling deep into the ground and burning fossilized hydrocarbons, we’ve invented better ways to do everything. At time when America’s economic superiority is facing unprecedented challenges, are we really willing to believe that …
by Debra Fiakas CFA
Keep the applause down! Contain your enthusiasm for yet
another biomass- or gas-to-liquids company. Over the past
several weeks I have written about a number of privately-held
developers of one technology or another intended to produce a
drop-in renewable fuel from biomass or natural gas. There are
more, In this post we check in on Velocys (VCL:
London), which stands out from the rest as a public company.
No matter that it’s technology looks like that of the very next
renewable fuel company, it is accessible to minority investors.
Until recently Velocys was known as Oxford Catalyst Group, a name
that perhaps better describes the technology behind the
company. Velocys has developed a small-scale modular plant
that can be deployed in remote locations where stranded natural gas
or waste biomass can be found. Velocys uses the conventional
steam reforming and Fischer Tropsch processes, but has added a twist
it calls ‘microchannel reactors’ where it deploys a proprietary
catalytic effect. The microchannels, with reduced dimensions,
intensify the chemical reactions and deliver greater efficiencies
than conventional Fischer Tropsh and steam reforming processes.
The company recorded the first commercial sales of its microchannel
reactors in the year 2013. An important market for Velocys is
the oil and gas industry, needs to capture and upgrade stranded
gases rather than burning them off in the oil field. Primus
Green Energy, which was discussed in the July 15th post “Primus
Wants to Clean up Fossil Fuels” and is also targeting this market
with its version of steam reforming.
The company has some interesting partnerships to help penetrate
commercial markets: waste handler Waste Management (WM:
NYSE) and power generator Pinto Energy. Velocys has a joint
venture with Waste Management in Oklahoma, where the company expects
to locate a plant next to one of Waste Management landfills.
Final permits have been submitted and approvals are expected in
Just as this article was being prepared, Velocys announced its
intention to acquire its partner Pinto Energy in a gas-to-liquids
project near the Port of Ashtabula in Ohio. The project is
expected to receive final permits yet in 2014 and then convert
natural gas from the Marcellus shale region to liquid gas.
Velocys claims Pinto Energy has a string of similar projects in its
pipeline. If that is the case there should be a nice step up
in value after the all-stock deal is completed.
Velocys shares traded down on news of the Pinto Energy
acquisition. Perhaps investors would rather see the company
report its first profits. Still investors, even those who have
not considered a London Exchange listed company, should take note of
VLS.L. There is some concern about the benefits of switching
to natural gas from an environmental standpoint. Make no
mistake about it, natural gas is still a fossil fuel. However,
compared to coal it has some merits. What is more
gas-to-liquids could serve as a valuable interim fuel source for
U.S. transportation transitions away foreign oil and gas to electric
or another more environmentally friendly fuel source. What is
more, Velocys technology does help clean up one of the dirtier
elements of the oil and gas industry - burning off waste
gases into the atmosphere.
Debra Fiakas is the Managing Director of Crystal Equity
Research, an alternative
research resource on small capitalization companies in selected
Neither the author of the Small Cap
Strategist web log,
Crystal Equity Research nor its affiliates have a beneficial
interest in the companies mentioned herein.