Speaker 1: With Laurent's segle And from London and Gerard Reed from Berlin.
Speaker 1: This is redefining energy today.
Speaker 2: I'm redefining energy.
Speaker 3: We're going to talk about molecules now, Laurn, we don't
Speaker 3: talk about this very often, but obviously it is a
Speaker 3: critical part of our energy system and it's going to
Speaker 3: continue that going forward. What we do need to do
Speaker 3: is we need to make them a little bit more green, right.
Speaker 4: Yeah, So it's all about that segment of the energy
Speaker 4: transition that we don't address a lot because we are
Speaker 4: a very electron guy. We're going to talk about waste
Speaker 4: gas management, We're going to talk about bio fuel sustainabilization,
Speaker 4: fuel emission capture. It's really a sector which is nascent
Speaker 4: and it's very American, much more than your opinion. And interestingly,
Speaker 4: you have some privatic de fund who are pretty good
Speaker 4: at developing those type of project.
Speaker 5: Great and we've got a really great character that we
Speaker 5: decided we bring on the show, Chris Roselle, who is
Speaker 5: the managing partner of a US business called Cresta Funds,
Speaker 5: which is a big investor in this area.
Speaker 3: So yeah, let's bring them on the show.
Speaker 2: Chris, Welcome to the show.
Speaker 1: Thanks for having me, Chris.
Speaker 4: When you created Christ Funds, you're a certain thesis around
Speaker 4: energy infrastructure investing, So what was it?
Speaker 1: My two founding partners and myself we started our careers
Speaker 1: together as operators and then founders and then became private
Speaker 1: equity investors. And so because of that, we started in
Speaker 1: the energy infrastructure sector, building midstream as sets, with a
Speaker 1: big focus around the gas sector in particular, so waste
Speaker 1: gas was a big focus of ours. At one point
Speaker 1: we had one of the largest footprints of assets and
Speaker 1: plants dealing with CO two nitrogen sulfur gases. And so
Speaker 1: when we went to build our first firm and started
Speaker 1: meeting with private equity, we found that there was a
Speaker 1: bit of a gap culturally from what we were looking
Speaker 1: for in venture capital. Firms have spent decades trying to
Speaker 1: put the founder mentality into the venture capital world, but
Speaker 1: in the real assets world, where real essets capital was,
Speaker 1: it seemed like most of the folks leading those sectors
Speaker 1: had come out of project finance, and so here we
Speaker 1: were as founders having the problem that founders have trying
Speaker 1: to raise capital for real asset investments, and we're having
Speaker 1: a very difficult time bridging that gap. So when we decided,
Speaker 1: after a decade of success as founders and operators to
Speaker 1: go raise a fund, we recognized where we could really
Speaker 1: add value is building a firm that brought real asset
Speaker 1: expertise with an appreciation for what founders go through. And
Speaker 1: that's really the gap that we try to fill as
Speaker 1: earlier stage real asset investments.
Speaker 4: So basically you're saying you're better building things running in
Speaker 4: next send sheets.
Speaker 1: Yes, a team, we're better at building things than running
Speaker 1: Excel spreadsheets.
Speaker 4: You managed almost two billion now and can you describe
Speaker 4: the various sector you've been investing in.
Speaker 1: Yeah, specifically in sustainability. You know we have this as
Speaker 1: I mentioned this long background in dealing with waste gas,
Speaker 1: both energy gas, industrial gas, and as energy transition began
Speaker 1: to take hold over the last few years in a
Speaker 1: very big way, we saw a specific need for our
Speaker 1: waste gas expertise Outside of just the energy sector. We
Speaker 1: started seeing that same need in agriculture, in waste management,
Speaker 1: in chemical production and fertilizer production. Then in twenty one,
Speaker 1: we were fortunate enough to be joined by a fourth partner,
Speaker 1: John Skriner, who had a decade of experience in low
Speaker 1: carbon fuels, which was an area we did not have
Speaker 1: a lot of experience in. But when we combined his
Speaker 1: low carbon fuel experience with our or waste gas experience,
Speaker 1: we felt like we could address this second transition that
Speaker 1: had been overlooked. Everyone's focused on power and the needs
Speaker 1: for power, but to get to net zero, we have
Speaker 1: to deal with a lot of other challenges. We have
Speaker 1: to deal with ag waste and chemical waste and other
Speaker 1: things that really weren't being addressed, and so that's our
Speaker 1: focus area for our fund.
Speaker 4: Can you give a specific example, so you're like into
Speaker 4: bio fuel or saff or something that I can understand.
Speaker 1: Yeah, if you had to break it down, there's sort
Speaker 1: of three areas that we really focus on. One is
Speaker 1: circular economy, waste management upcycling of waste. You know, can
Speaker 1: we take plastic waste and do something more than just
Speaker 1: make plastic. That's an area that we see value add
Speaker 1: solutions right now. The other is various kind of liquid
Speaker 1: and gas fuels. So obviously batteries play a role in mobility,
Speaker 1: but there are applications out there that we just don't
Speaker 1: think batteries are well suited for because of their dense.
Speaker 1: Either're just so heavy, and so we see need for
Speaker 1: things like SAFF. You mentioned sustainab aviation fuel, and that's
Speaker 1: an area that we focus on. And then lastly, it
Speaker 1: is in just dealing with direct emissions. That may be
Speaker 1: methane emissions from a dairy farm, it may be CO
Speaker 1: two emissions from a fertilizer producing plant. Those are the
Speaker 1: three big areas. Waste up, cycling, liquid and gas fuel alternatives,
Speaker 1: and then waste gas management.
Speaker 4: Okay, so if we're going between two SAFF, recent news
Speaker 4: have not been very positive and NESTA is an absolute disaster,
Speaker 4: you know, air products or so considering a certain number
Speaker 4: of plants, So how can you survive in that environment?
Speaker 1: I mean, MESSI is a good case study. I think
Speaker 1: about fifteen percent of what they make is SAFF. They
Speaker 1: make a lot of HBO and diesel and other products.
Speaker 1: But you know, they certainly struggled the last year. But
Speaker 1: if you go back to twenty twenty, you know they
Speaker 1: were up two hundred percent. You're same in twenty two
Speaker 1: they were up again. So what you're really looking at
Speaker 1: is just a tremendous amount of volatility, and the reason
Speaker 1: it's so volatile, we believe today is you have a
Speaker 1: rapidly growing demand, and this is not just for sustainable
Speaker 1: aviation fuel, but also for renewable diesel and ethanol and
Speaker 1: lots of other liquid fuels. You have a rapidly growing demand,
Speaker 1: but it's on a very small starting base, and so unfortunately,
Speaker 1: we can't add supply in this market ten gallons at
Speaker 1: a time. We have to build very large plants, and
Speaker 1: so as people bring these plants on to meet demand,
Speaker 1: you find yourself whip sawing between a market that is
Speaker 1: undersupplied and oversupplied, and undersupplied and oversupplied.
Speaker 2: As we look.
Speaker 1: Forward to twenty thirty, we see that market correcting because
Speaker 1: eventually this base gets big enough that one or two
Speaker 1: new plants isn't enough to move the market. In fact,
Speaker 1: even as early as twenty twenty six, with Canada coming
Speaker 1: on as a new demand center and EU and UK
Speaker 1: continue to grow in their requirements for sustainable aviation fuel,
Speaker 1: we see that market correct and you're actually in an
Speaker 1: undersupplied market in twenty six. By twenty thirty, there's a
Speaker 1: very healthy deep market. So we are long term bullish,
Speaker 1: but there's a lot of turbulence between here and there.
Speaker 3: Chris, Really, I'll tell you there's two things I'm really
Speaker 3: interested and i'd love to hear your view on. One
Speaker 3: is is the United States and the future a sort
Speaker 3: of infrastructure investment in energy as you see it. And
Speaker 3: then the second thing is I'd love to talk about Texas.
Speaker 2: At the end of the day.
Speaker 3: You come from Texas and a lot of your investments
Speaker 3: are in that area. But maybe we just talk about
Speaker 3: the US first and foremost and just give us your
Speaker 3: view on how you see the landscape over the.
Speaker 2: Next few years.
Speaker 3: So you look at it positive from an investment point
Speaker 3: of view, do you look at it cautiously?
Speaker 2: How do you see it?
Speaker 1: What I think is clear is there's a lot of
Speaker 1: uncertainty right now. This existing administration has had a lot
Speaker 1: of activity in the first month, and the markets globally
Speaker 1: are trying to digest that and predict where it's headed.
Speaker 1: I'm not going to be able to predict the future,
Speaker 1: but what I will say is there are some areas
Speaker 1: that we focus on that we believe are really not
Speaker 1: in the spotlight of a lot of the changes that
Speaker 1: are happening today. So one of those areas is carbon capture.
Speaker 1: That's an area in particular that the incentives that drive
Speaker 1: a lot of the support behind carbon capture are not
Speaker 1: new incentives. These are not created by the Biden administration.
Speaker 1: They go back a decade or more. And also most
Speaker 1: of the benefit of these incentives tends to flow into
Speaker 1: conservative districts or conservative states, and so we see a
Speaker 1: lot of bipartisan political support in the United States for
Speaker 1: carbon capture. I don't know exactly how that will play out.
Speaker 1: One of the big secular trends we see driving power
Speaker 1: right now is AI and we're seeing hyper scalers need
Speaker 1: massive amounts of twenty four to seven based load power,
Speaker 1: which tends to lend itself away from wind and solar
Speaker 1: and more towards solutions like natural gas fired power with
Speaker 1: carbon captures something along those lines, and so I could
Speaker 1: see that being a big growth area. Areas that are
Speaker 1: a little just from a US sort of investment standpoint,
Speaker 1: that are a little more uncertain, are areas that tend
Speaker 1: to get caught up in some of the trade friction
Speaker 1: that we see we have as I think, you know,
Speaker 1: a large refinery in Canada that produces renewable diesel and
Speaker 1: could produce sustainable aviation fuel as well. Historically, all of
Speaker 1: that product that's produced has come to the United States.
Speaker 1: We may have a tariff on that product that obviously
Speaker 1: creates a big headwind, but we're already seeing responses. The
Speaker 1: Canadian province of British Columbia announced a change to their
Speaker 1: Low Carbon Fuels Act that requires the satisfaction of their
Speaker 1: fuel demand be met with Canadian fuel. So right there,
Speaker 1: just opened up a new market for our Canadian refinery.
Speaker 1: So what's going to happen is there's just like with
Speaker 1: sustainab waviation fuel broadly, there's a lot of near term
Speaker 1: uncertainty and turmoil. As the rules become known, the markets
Speaker 1: will settle out and it will.
Speaker 3: Be business as usual. When I look at the set
Speaker 3: of policy that US government is, you hear this drill,
Speaker 3: baby drill, I don't think that's what it is.
Speaker 2: I think it's cheap, baby cheap.
Speaker 3: In other words, energy has to be cheap. I don't
Speaker 3: care what it is.
Speaker 2: It has to be cheap. Do you look at it
Speaker 2: like that?
Speaker 3: How would you sum up the policy as you see
Speaker 3: it going for the next few years.
Speaker 1: There's probably a couple of sentiments behind that policy. On
Speaker 1: the one hand, the traditional energy sector tends to lean
Speaker 1: very conservative, so I think there is an internal desire
Speaker 1: from the administration to find way to support this industry
Speaker 1: that's been supportive of the Republican administration. Right, So there's
Speaker 1: a little bit of that, But I think you're right
Speaker 1: when you're looking longer term. The big concern that's really
Speaker 1: started to plague renewables globally, but it's being brought to
Speaker 1: the spotlight in the US is inflation. Right, we have
Speaker 1: a large risk of inflation. There are solutions within energy
Speaker 1: transition that can be implemented with very minimal cost impact,
Speaker 1: and then as you start to move to the right
Speaker 1: of that curve, the costs go up dramatically. You hit
Speaker 1: a wall pretty fast. Our own view has been for
Speaker 1: some time that pragmatic solutions that can be impactful will
Speaker 1: get built eventually. Though when we hit that inflationary wall,
Speaker 1: there are hard decisions to make. It's easy to dismiss
Speaker 1: these things as saying, well, economics shouldn't matter. We're in
Speaker 1: a crisis here, and like the end of the day,
Speaker 1: this crisis could impact sort of lie. But the reality
Speaker 1: is inflation does too. Right, When the cost of food
Speaker 1: is too high to bear, then people starve, and so
Speaker 1: the reality is this inflation is not just greed or
Speaker 1: people's money in their pockets. It's a real concern whether
Speaker 1: or not sort of lowest income producing people in the
Speaker 1: world will suffer inordinately to try to achieve these larger
Speaker 1: climate goals. I do think you're right. I don't think
Speaker 1: that the Trump administration is anti climate. I think they
Speaker 1: are pro traditional oil and gas. And I also think
Speaker 1: they are anti inflation, or at least, you know, ostensibly
Speaker 1: anti inflation. I think the tariffs could drive inflation, but
Speaker 1: the ultimate goal is to try to find ways to
Speaker 1: curb inflation. And so when you say cheap, baby, cheap,
Speaker 1: that's probably in line with where the goals are.
Speaker 3: The other thing related to that is Texas. At the
Speaker 3: end of the day, is that you guys are based
Speaker 3: in Texas. If I'm just looking across the world of energy,
Speaker 3: I sort of have to look at Texas and say, well,
Speaker 3: maybe these guys are really showing us the way forward.
Speaker 3: And it's for me amazing that Texas seems to be
Speaker 3: at everything to do with energy. They're not just leading,
Speaker 3: but the winning right and the whole economy is basic.
Speaker 2: So could you talk a little bit.
Speaker 3: About how you see Texas, and I suppose what makes
Speaker 3: it special.
Speaker 1: Right, And in some cases there's some advantages Texas has.
Speaker 1: It's a very large land mass, it gets a lot
Speaker 1: of sun coverage. There's a lot of open areas in
Speaker 1: the plains with big wind right. So we have a
Speaker 1: lot of the resources that lend themselves well to renewables.
Speaker 1: We also have access to low cost natural gas and
Speaker 1: a very stable long term grid that's been integrated within Texas.
Speaker 1: So the ARCOT grid is largely self contained, and so
Speaker 1: it's almost a country under itself, right, So it has
Speaker 1: a lot of resources that has been taken advantage of.
Speaker 1: I don't think all of the growth that Texas has
Speaker 1: had has been driven by ideology. It's a lot of
Speaker 1: it's just driven by economics. It's an area with an
Speaker 1: abundance of resources, and it's had people with very low
Speaker 1: barriers and very low amounts of friction. It's given companies
Speaker 1: ways to access those resources and develop them fully.
Speaker 2: That's great help.
Speaker 4: Yeah, Look, it's always interesting to confront your Texan or
Speaker 4: American view with what we have in Europe, which is
Speaker 4: basically squeeze between America and Algie dominance and Chinese technology.
Speaker 4: And to tell you the truth, ch and I were
Speaker 4: investing in a chairman off top solar company and the
Speaker 4: German they went to see their US counterpart and they say,
Speaker 4: those guys are morons. They don't know how to put
Speaker 4: sela on the roof. It costs forty thousand dollars a
Speaker 4: roof in California. In Germany it costs half this price.
Speaker 4: I don't know if they are disorganized or not, but
Speaker 4: the reality is we were just dealing with Chinese solar
Speaker 4: panels and there was no from Tarif from them, and
Speaker 4: there was no.
Speaker 2: One bargo or whatever band.
Speaker 4: So at some point if you want to do the
Speaker 4: energy transition, because unfortunately we don't have the permium basin
Speaker 4: in Bavaria as big energy importer, we need to use
Speaker 4: whatever is on the hand, and a lot of Chinese
Speaker 4: technology are good. Now the old mantra we hear are
Speaker 4: I mean they're gonna spy on us and so on
Speaker 4: is bs because there is a law in your rope
Speaker 4: which call a cyber security law, and you cannot have
Speaker 4: the Chinese software controlling any equipment. So in fact there's
Speaker 4: this very limited world way in vertors and so on.
Speaker 4: But there are basic parts, whether it's batteries or solar
Speaker 4: where we are happy to get a lot of cheap
Speaker 4: Chinese and build value on the top of them. And
Speaker 4: in the US it's not. The US is importing less
Speaker 4: Chinese solar panels than the Dominican Republic. So that's ridiculous
Speaker 4: ideology on one side and ideology on the other. Sorry,
Speaker 4: I mean this, there's no question there, it's.
Speaker 1: Just no no. I think the challenge we run into is,
Speaker 1: you know, in politics, there's conflicting goals. If the unilateral
Speaker 1: goal of all politicians was to create the lowest cost
Speaker 1: energy transition, then you have to eliminate trade friction. The
Speaker 1: best way to do that is there are companies that
Speaker 1: specialize in the production of products. There are companies like
Speaker 1: your German counterparts, that specialize in the installation itself and
Speaker 1: the systems and the efficiency and to get the best
Speaker 1: of all worlds, would we would ultimately end up with
Speaker 1: the lowest cost product. I think when you run up
Speaker 1: against other political goals that that starts to conflict with
Speaker 1: the transition. And I think that's what we're running into
Speaker 1: in the US and.
Speaker 3: In Europe as well.
Speaker 1: Right, you do have anti dumping duties on US products,
Speaker 1: and you do have things that drive your European cost
Speaker 1: up as well, where you may be bringing in components
Speaker 1: from Asia, you know, duty free. You're not bringing in
Speaker 1: fuels duty free, right, So there are there are areas
Speaker 1: where that friction does exist. So in a perfect world,
Speaker 1: we would eliminate that friction for purposes of hitting this
Speaker 1: energy transition at the lowest possible cost. But I think
Speaker 1: we just have to deal with those practical inefficiencies, Chris.
Speaker 3: I wanted to go back to your portfolio.
Speaker 2: Right.
Speaker 3: A lot of what we talk about is about electrons,
Speaker 3: and a lot of what you're doing is molecules. And
Speaker 3: we realize this is incredibly important. But I'd love to
Speaker 3: ask you how you see that in the light of
Speaker 3: if we look again from the outside of the US,
Speaker 3: what you've got is a surplus of molecules and that
Speaker 3: purpose to increase, not decrease in the next few years.
Speaker 2: So how do you sort.
Speaker 3: Of invest in that type of area when you've got
Speaker 3: that over capacity maybe looming? And if you look at
Speaker 3: the gas prices, they're incredibly low compared to everywhere else
Speaker 3: across the world.
Speaker 2: Right.
Speaker 1: A couple of things. One, while we do talk about
Speaker 1: drill baby drill, and there's this big sort of ethos
Speaker 1: shift around traditional energy. In the US, we haven't really
Speaker 1: seen drilling constraints in the last few years. Most of
Speaker 1: the drilling pacing is still driven by global pricing, which
Speaker 1: is I still think more influenced by OPEC's decisions than
Speaker 1: US policy decisions. So I don't know that you'll necessarily
Speaker 1: see a big flood of incremental growth without a market
Speaker 1: to support that globally, because we are already exporting products
Speaker 1: right as we've already overrun our own refining capacity. On
Speaker 1: the natural gas side, the need for these hyper scaling
Speaker 1: of data centers is likely to chew up most new
Speaker 1: supply that we can generate in natural gas and on
Speaker 1: the crude side, I think you're going to still be
Speaker 1: just driven by global demand for product. If I think
Speaker 1: really long term, though, we still have a limited amount
Speaker 1: of finite resource in the ground. I don't know how
Speaker 1: much that is. It seems like you can always squeeze
Speaker 1: a little more juice out of this lemon, but at
Speaker 1: some point these resources deplete, and where we see things
Speaker 1: like biofuels coming into place are to help supplement longer term,
Speaker 1: as those lower cost molecules either deplete or become higher
Speaker 1: and higher cost to get to where all of a sudden, now,
Speaker 1: if we're using waste products or cover crops like camelina,
Speaker 1: we may be able to see a cost parity on
Speaker 1: biofuels that's in line with traditional That's really the endgame
Speaker 1: for biofuels.
Speaker 2: Now.
Speaker 1: The challenges there's not enough biomass in the world to
Speaker 1: meet our energy needs. Right, you have to have solar,
Speaker 1: you have to have wind, you have to have these
Speaker 1: other things. But it can be a nice stop gap
Speaker 1: and bridge and quite low cost as well over the
Speaker 1: long enough time period. Compared to the lowest cost oil
Speaker 1: in the world. No, it's expensive, but compared to where
Speaker 1: oil is been in the last ten years at times,
Speaker 1: I mean, I've seen one hundred and forty dollars oil,
Speaker 1: I've seen negative forty dollars oil. When you get oil
Speaker 1: prices that are on the high end of that, we
Speaker 1: can actually make renewable diesel and sustainableviation fuel at true
Speaker 1: cost parity to those numbers. And so that's where I
Speaker 1: think we're headed long term. So you're right, we're flooded
Speaker 1: with molecules today. I don't believe we'll be flooded with
Speaker 1: them forever, and I do think there's a global recognition
Speaker 1: of that.
Speaker 4: Let's assume I have a beautiful project or something, what
Speaker 4: would interest you as an investment the next three years?
Speaker 4: Say like, I can feel something because what I really
Speaker 4: appreciate with your approach is you have a real dominic expertise,
Speaker 4: which means that you might see trends at least a
Speaker 4: few months ahead before the behemoth of Black Blackstone, KKR
Speaker 4: and so on. I think you have a feel of
Speaker 4: the grantity of the market. So why are you're editing now.
Speaker 1: One area that's early stage for us but pretty excited
Speaker 1: is there's been a lot of megascale early venture work
Speaker 1: in things like carbon capture, and in some cases there
Speaker 1: are projects out there where they're taking the carbon from
Speaker 1: carbon capture and making other products like graphene from those carbon.
Speaker 1: We're not likely to be competitive on those multi billion
Speaker 1: dollar type projects, but what we find is they've been
Speaker 1: built quickly, and they've been built to address a specific problem,
Speaker 1: and in that case, they end up with a waste
Speaker 1: stream or a waste product that was unintended. So, for example,
Speaker 1: in some of the projects we've seen where they're building
Speaker 1: graphene out of captured CO two or methane, for example,
Speaker 1: you end up with hydrogen that's just being vented into
Speaker 1: the atmosphere. So we're looking at ways to take that
Speaker 1: waste hydrogen and turn that into a usable product like
Speaker 1: an e fuel or an ammonia or something that can
Speaker 1: then be utilized one example. But there are lots of
Speaker 1: ancillary examples to that approach, which is we go and
Speaker 1: we sort of chase where the big whales have gone,
Speaker 1: and we look to see, in their rush to get
Speaker 1: something that works, where have they left inefficiency laying around
Speaker 1: that we can come in on a smaller scale and
Speaker 1: help to patch up. And I think that's a big
Speaker 1: focus area of ours, and we see that in and
Speaker 1: around large ethanol projects and carbon capture projects. We see
Speaker 1: that in forestry waste management projects, in plastic refining projects.
Speaker 1: There are lots of areas where we can come in
Speaker 1: with a smaller solution and clean up an inefficiency that's
Speaker 1: quite attractive economically but also has a pretty big carbon impact.
Speaker 3: Chris, I'd actually like to ask you about ESG investing
Speaker 3: in the States, because what we sort of see and
Speaker 3: I'm speaking for Lauren. I think we said I think
Speaker 3: there's generally a reaction against ESG investing across the world. Yeah,
Speaker 3: I was on your website and there's ESG all over,
Speaker 3: So you wouldn't be doing that if there isn't still
Speaker 3: people out there that are believers. So I'd love to
Speaker 3: hear your thoughts in terms of how investors in the
Speaker 3: US are looking at ESG.
Speaker 1: The way I see it, and this may be simplification,
Speaker 1: but I don't think there's anyone that's anti climate in
Speaker 1: the world. ESG as a phrase or as an acronym
Speaker 1: has become loaded with political meaning that's not just tied
Speaker 1: to climate. The same Istruy for DEI. I mean there
Speaker 1: are a lot of these phrases where people have become
Speaker 1: anti the phrase because it evokes more than just climate investing.
Speaker 1: What it boils down to. And it's a bit on
Speaker 1: what you said earlier, Gerard, when you asked, is our
Speaker 1: policy cheap baby cheap? Where people's tension ultimately is is
Speaker 1: everyone would try to save the planet. If it was
Speaker 1: free of cost, everyone would do that, And then I
Speaker 1: think there's some costs that most people will still save
Speaker 1: the planet. And then I think there's a cost at
Speaker 1: which no one wants to save the planet, right, so
Speaker 1: that when we're looking at ESG, we try to step
Speaker 1: away from the politics behind that always have and what
Speaker 1: we're really focused on are pragmatic solutions that are returns first.
Speaker 1: We're an organization that's not impact first. We're not trying
Speaker 1: to go make an impact at the expense of returns.
Speaker 1: But we see a secular trend and an opportunity to
Speaker 1: invest profitably in ways that also have an ancillary positive
Speaker 1: climate impact, and that's really our focus. So when we
Speaker 1: talk about ESG or DEI or any of those terms,
Speaker 1: we're coming at it with a very pragmatic approach. We
Speaker 1: want to be innovative, but we want to be pragmatic.
Speaker 1: It's actually one of our values is pragmatic innovation, and
Speaker 1: so that's really our focus areas. So not to try
Speaker 1: to thread the needle here, but I think a lot
Speaker 1: of people are against the phrase ESG. I don't believe
Speaker 1: if anyone's against the idea of protecting the climate Chris.
Speaker 4: As we conclude, we like a lot of your approach,
Speaker 4: we like your portfolio, we like that you're in the
Speaker 4: zag when everybody's in the ZIG, So what is it?
Speaker 2: It's a cultural thing. Explain please.
Speaker 1: One of the challenges. There's a lot of capital that's
Speaker 1: been raised in climate tech and venture capital, and there's
Speaker 1: a lot of capital that's been raised in megascale infra.
Speaker 1: And what we find in the market is when a
Speaker 1: technology has grown past the venture stage, it's commercial, it's
Speaker 1: ready to go, but it needs to be implemented sort
Speaker 1: of one asset at a time. Those assets maybe twenty
Speaker 1: five or fifty million dollars installations, which is too much
Speaker 1: for a venture capital firm to touch, but it's pretty
Speaker 1: small for a major infrastructure firm to get involved in.
Speaker 1: And the other challenge we've heard it called the missing middle.
Speaker 1: There's a lot of ways to approach this, but we
Speaker 1: see this as a very real phenomenon. And one of
Speaker 1: the things we try to do is get involved in
Speaker 1: that early commercialization so it's no longer venture, it's commercial scale.
Speaker 1: Allow a company to build a base of assets and
Speaker 1: a pipeline of growth so that they can become a
Speaker 1: better target for the large infra because the bigger challenge
Speaker 1: for the large infragroup is not just the smaller check size.
Speaker 1: It's a smaller check that also needs a really large
Speaker 1: amount of manpower. It takes a lot of time because
Speaker 1: you're dealing with permitting and construction and commercial contracts, and
Speaker 1: a lot of that stuff is just very high touch,
Speaker 1: and so when you're doing twenty five and fifty million
Speaker 1: dollar investments that are also very high touch. Right now,
Speaker 1: there's just not a natural home for a lot of
Speaker 1: those opportunities, and that's where we've been able to fill
Speaker 1: the gap.
Speaker 4: Well, thank you for unveiling your secret on those wise
Speaker 4: words crisis. There's been a pleasure to have you on
Speaker 4: the show, and what I wish the best for Christophins.
Speaker 2: Thanks.
Speaker 1: Yeah, thanks jar Thanks Lauren, It's really great to talk
Speaker 1: to both of you.
Speaker 4: Well, Jarad, compared to last week where you're your foot fight,
Speaker 4: this was very civilized.
Speaker 2: Yeah.
Speaker 4: Chris is very articulated, very smooth sailing, and I like
Speaker 4: his approach at the intersection of private infrastructure.
Speaker 2: I do too.
Speaker 3: And what I actually, there's a lot of things I like.
Speaker 3: One is I would say what he's doing is not easy.
Speaker 3: And number two but what I like about it is
Speaker 3: the fact that he's going into niche markets, which means
Speaker 3: actually from a money managing money making.
Speaker 2: Point of view.
Speaker 3: You can make quite a lot of money in these
Speaker 3: niche markets because they're ignored by the really, really big players.
Speaker 3: And by the way, it's obviously I think we both
Speaker 3: agree you need these molecules going forward, so you want
Speaker 3: to have them as green as possible. So we need
Speaker 3: to work in that area and investment in that area.
Speaker 4: Yeah, so it's all was great, Okay, So I'm going
Speaker 4: to qualify strategy, but I'm not denegrating it. It's very positive.
Speaker 4: But technically it's a scavenger policy. You find those big
Speaker 4: fat inefficiency and you manage to feed on them, and
Speaker 4: that is very smart, and you want to do carbon
Speaker 4: capture on it and all plant it's going to cost
Speaker 4: you twenty seven dollar pattern of C two and in
Speaker 4: front you have a forty five Q tax credit which
Speaker 4: gives you eighty five dollars. So that is super profitable.
Speaker 4: That's very smart. Now, not of all these pets are
Speaker 4: gonna succeed in the short term, because as you said,
Speaker 4: the market is very long molecule and suffire expensive. And
Speaker 4: if your strategy, say when all is back at two
Speaker 4: hundred to barile, all be profitable or you know a
Speaker 4: lot of that's not very anyway. It's good, it's smart.
Speaker 4: I like it. It's good that the market just to create
Speaker 4: technical actors who are taking care of the blind spots
Speaker 4: that the black Hawk or Blackstone of this will have.
Speaker 2: So yeah, I like their approach a lot.
Speaker 3: Yeah, Micho, I'm looking forward to following their investment activities
Speaker 3: over the next few years.
Speaker 4: Okay, we thank Chris Moseel for coming on the show.
Speaker 4: Christa and Job I'll talk to you next week.
Speaker 3: Look, porter, thank you for listening to Redefining Energy.
Speaker 1: Don't forget to read the show and subscribe on Apple podcast, Spotify,
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