Good Morning
What we’re reading this week:
California Gov. Gavin Newsom told the Los Angeles Times he's interested in extending the life of the Diablo Canyon nuclear plant that's scheduled to close mid-decade, Ben writes.
Sila, a battery materials startup, has bought a 600,000-square-foot manufacturing facility in Washington to vastly expand production for EVs, Axios' Alan Neuhauser reports. The company counts BMW and Mercedes as partners.
The Triple Bottom Line’s 7 Sustainable Business Trends For 2022
The Greendicator
Top Deals of the Week
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Group14 Technologies, a seven-year-old, Woodinville, Wa.-based lithium-silicon battery developer has raised $400 million in Series C funding, including $100 million from Porsche.
Sun King, a 15-year-old, Nairobi, Kenya-based company that provides solar energy products to off-grid homes in Africa and Asia, has raised $260 million in Series D funding led by BeyondNetZero. Other backers in the round included M&G and Arch Emerging Markets Partners. TechCrunch has more here.
Divergent Technologies, an eight-year-old, L.A.-based car manufacturing startup that's 3D printing car parts, has raised $160 million in Series C funding from Tom Steyer, former Goldman Sachs president John Thornton, and others. Dot.LA has more here.
Home energy monitoring startup Sense raised a $105M Series C led by Blue Earth Capital (TC)
Brimstone, a three-year-old startup based in Oakland, Ca. that is developing carbon-free cement, raised a $55 million Series A round co-led by Breakthrough Energy Ventures and DCVC. (CNBC)
Higg, a sustainability insights platform for consumer goods, raised a $50M Series B led by Silversmith Capital Partners and Galvanize Climate Solutions (PRN)
VitroLabs, a biotech startup aiming to scale production of cellular cultured leather, raised a $46M Series A led by Agronomics (FM)
Home energy efficiency startup Sealed raised a $29.5M Series B led by Fifth Wall Climate Tech (BW)
Zeno Power, a four-year-old, Washington, D.C.-based developer of radioisotope power systems, has raised $20 million in Series A funding led by Tribe Capital. Axios has more here.
South 8 Technologies, a seven-year-old, San Diego, Ca.-based company that makes a gaseous electrolyte component for lithium-ion batteries, raised $12 million in Series A funding. Anzu Partners led the round, joined by LG Technology Ventures, Shell Ventures, Foothill Ventures and TNSC. Axios has more here.
Climate risk tech startup Sensible Weather raised a $12M Series A led by Infinity Ventures (PRN)
Scoot Science, a five-year-old startup based in Santa Cruz, Ca., that provides ocean data for fish farms, has raised $4.1 million in seed funding led by Third Kind Venture Capital
BattGenie, a five-year-old, Seattle-based battery charging startup, has raised $1.5 million in seed funding co-led by Powerhouse Ventures and VoLo Earth Ventures. More here.
Dat Bike, a three-year-old, Vietnam-based maker of electric motorbikes, has raised $5.3 million in Series A funding led by Jungle Ventures, with participation from Wavemaker Partners. The outfit has now raised $10 million altogether. TechCrunch has more here.
Advanced Ionics, a five-year-old, Milwaukee, Wi.-based company developing industrial electrolyzers that produce hydrogen — a key component of materials like metal, glass and plastic — in a way it says is more sustainable and costs less than the current fossil fuel-derived hydrogen, has raised $4.2 million in new funding led by Clean Energy Ventures. More here.
Yotta Energy, a six-year-old, Austin, Tex.-based maker of modular storage storage, has raised $3.5 million in extended Series A funding from inverter OEM partner APsystems, among others. The tranche brings the round total to $16.5 million. More here.
Green Theory
Dumping the Pump
If you’re lucky enough to have a car, but still stuck stopping at gas stations, you probably noticed the drastic rise in prices. Saving money at the pump could be the reason you finally opt for an electric vehicle, but predicting the future of gas prices can be hairy. Learning more about the factors driving the supply or demand today may point you toward the right price tomorrow. Regardless, complex dynamics from cartels to the global energy transition will mystify any “free-market” forecast for the leading energy commodity.
Passed Gas
![Sign reading "Gas shortage! Sales limited to 10 gallons of gas per customer" posted at a Connecticut filling station during the energy crisis Sign reading "Gas shortage! Sales limited to 10 gallons of gas per customer" posted at a Connecticut filling station during the energy crisis](https://substackcdn.com/image/fetch/w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F00f44934-be0f-4ee1-b275-b4b2b8630296_720x450.jpeg)
In 1973, the US lost access to 1 in every 7 barrels of oil due to a cooperative boycott by the Organization of Arab Petroleum Exporting Countries. Gas prices skyrocketed, and many pointed to a lack of supply as the key issue. This shock in supply fostered an era of enhanced excitement about US domestic oil reserves and production capacity, as well as a redoubled desire in Washington to maintain favorable relationships with a critical mass of oil producers. Amory Lovins rang the alarm that more efficient products provided a savvier path to energy independence—that reducing demand for oil was better than increasing the supply. Jevons would argue that demand for oil may have only increased as a result of efficiency savings, but there’s no doubt that Lovins’ reframing of the debate helped broaden the context of the energy discussion. In the 70s, solar panels were orders of magnitude more expensive, far from having any impact on fossil fuel demand. Meanwhile, on its heels, the US felt weakened by the power of foreign cartels’ supply.
Lying in wait in shale rock, fossil fuel deposits once deemed too expensive to extract became viable in the US in early 2010s. The technology for “fracking,” being less expensive to implement, kicked off the capitalization of largely unexploited oil and gas resources. Companies quickly began tapping the two large deposits in the US, and the scramble for shale was on. It remains unclear whether post-Soviet Russia or the US can take credit for the technology underpinning this ravenous new boom in fossil production, but the innovation dramatically swung the global share of production in the US’ favor. Regardless of growing environmental movements and climate accords, the oil giants (read: corporations and governments) seemed poised for steady growth in demand for oil, which they gladly served with a steady expansion of supply.
Free Oil & Freefallin’
In 2020, with the global pandemic spreading, the price of oil went negative, bottoming out from a sudden collapse in demand. So unusual in world history, this dip in demand sent a Bob Dylan harmonica blast through the industry: times are a changin’. Since then, gas prices have climbed to a new high, while the oil giants recorded record profits in 2021.
Some portray Putin’s invasion of Ukraine as the catalyst of recent price hikes. Though we covered the way demand for oil could be hiding behind other nationalist excuses for war in early February, conflict alone can’t explain the unprecedented profits for big oil. Those that simplify the rise in prices as an issue of a supply shortage—and call for release of US reserves, for instance—risk overlooking the agency of gas majors in determining supply. The Biden Administration has outpaced the previous presidency in selling drilling permits on public land (despite promising to halt permits). Oil & gas companies, however, aren’t bringing supply back up to previous highs. Instead, 2021 saw even less US fossil fuel production than 2020.
Take Your Oil Money and Run
What can explain record profits and prices when production is falling? Analysts forecast a new positioning among the global oil elites: a self-induced era of scarcity. As an individual oil company, restricting your own supply seems like a missed business opportunity. By limiting your production, you give away market power to your competitors, and incur higher costs on what you do produce. If, instead, the total supply shrinks, customers are forced to pay more for the rarer commodity. Financially, energy underperformed other sectors in the last decade, but 2021 reversed the trend. Supply kept tight by big oil, consumers are taking on the burden of higher costs, with few short-term alternatives.
Seeing higher numbers at the pump and lower numbers in your bank account is bound to upset anyone, but things get complicated when we ponder what to do in response. Rather than releasing reserves into the supply, California’s governor proposed a $400 credit that would provide a direct payment to car owners. Economist Steven Levitt commends this idea, as it provides relief to people dependent on gas, while still preserving the pain of high gas prices relative to other goods. Forking over more money to big oil doesn’t feel great, but soaring prices are more likely to push people to alternatives than lower prices.
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Those reaping the rewards of the post-2020 oil rally aren’t sticking around to see what happens next. In perhaps the most telling sign of change, reinvestment in US shale production is plummeting. Before the world turns their back on oil entirely, the industry is raking in cash. Instead of betting on the future of their industry, investors are taking their profits and seeking greener (or, at least, other) pastures.
The Future of Oil Futures
With effort and luck, we’ll shift from our dependence on oil, bring steady declines in oil production, and slash global emissions. Gouging vulnerable, gas-dependent people hardly represents justice, but the move toward clean energy independence may accelerate nonetheless. Gas industry disruptions are here to stay, especially as climate change ushers in a new age of increased pandemic risk, just for starters. Finding more equitable ways to reduce the burden on the least fortunate, and shining a light on the behind-the-scenes of the oil industry, hopefully we can wean off the pump and shut down this polluter profit party.
The Closer
Back with some Berkeley clock tower peregrine falcon content and happy to share that, against all odds, the hatching has begun!
I don't know how you'd get it to the US but Dat Bike is only ~$2.5k unless I'm missing something:
Deposit: 500,000 VND. Selling price: 54,900,000 VND.
Splitsies?