A lot of people including myself has become very interested in the CleanTech riding on the wave of current oil prices and increased awareness of global warming and climate change. It feels right to do something in this area and it is necessary, however let's be fair, none of these business activity in Cleantech would ever have happened now if it wasn't for the increase in oil prices.
And what if this is just another bubble, I was myself very much involved in the last major bubble - the Internet bubble, and I hopefully learned from my mistakes, but have a look at the following chart, it looks very like a bubble to me:
In this graph you find in the oil price per barrel since 1993 plotted against the price of Natural Gas. In the two smaller graphs you have to your left, the 1929 stock market crash and in the right one, the Internet bubble crash, looks kinda similar to me, no?
What if now this is a bubble and we will return to lower oil prices, we I guess that is good for the majority of the people in the short run, current commodity prices just pushed some 100 million under the minimum level of existence, hence all the fuzz in the UN the past few weeks. But what about the environment in the long run? How much focus on Cleantech will remain when the oil returns to US$50 per barrel and the business drivers are not there any more?
Most people agree that you can make Ethanol profitable at US$90 and Biodiesel at US$60 per barrel, or if it was the other way around, does not really matter in this discussion, the reality will be that climate change warnings alone will not be enough to pull the CleaTech wagon through to a sustainable future, or will it?
The Internet brought with it Boradband, Google and Software as a Service, great inventions that we all benefit from. Will we be able to see the same thing in CleanTech even if the oil bubble bursts? Just looking into the Algae scene which you can read about in my other blogs, it looks frigtlingly much like the Internet photo scene in 1999 when I started ViaCarla together with Greg Lee. There were more then 200 start-ups back then and the total investments into the Internet photo space was at least US$500M over 3-4 years.
The trick will be to pick the oFoto, Shuttelfly of Snapfish amonth all the Algae technology companies out there. I have no doubt that Algae will be a very important ingredience in the future of fuels and climate change, but the question is how and when, as I can see it right now we are still 3-5 years away before we can see what emerges out of this industry. I believe that it will be something great, but it will probably look more like YouTube, Twitter, or Facebook then the early internet photosites in web 1.0.
As always I welcome comments to these simple reflections from a rainy but warm Singapore.