Friday, August 12, 2011

Tough Act to Follow

Earlier this week a major law firm in New York, Hodgson Russ, LP, hosted one of its NYC Cleantech events, showcasing start-up clean technology and clean energy companies.  This event featured a keynote presentation by Michael Gilbert, now a private consultant in the private and public energy field.

Gilbert has not always been a consultant.  His was a story of failure as a business development officer for a Texas-based company aspiring to lead the way in algal oil production.  His presentation was a bit of tongue in cheek reminiscence on his years with the company that has failed to generate much more than press releases.  Gilbert described the need to accurately assess risk and the importance of verifying performance claims, among other key hurdles that investors enamored with the "green" story are wont to confront.

It was a tough act to follow for the rest of the companies presenting at the event.  Directly following Gilbert was Unified Fuels Technology.  Based on Jersey City, Fuel NJ as they like to be called, had to acknowledge Gilbert’s admonitions at nearly every point in their presentation. 

FuelNJ has developed a proprietary biomass conversion processes that accepts all manner of feedstock, from municipal waste to sugar cane bagasse.  The company claims it is not necessary to shut down to re-gear or clean-up equipment.  That could be a big plus for a plant that is not blessed with a consistent and abundant feedstock.   

FuelNJ is a private company and thus leaves most of us at the station when it comes to making an investment.  However, it is a company that is worth adding to our Beach Boys Index in the biofuels group.  We expect to see some consolidation in the biomass conversion group over the next few years.  There appears to be considerable divergence in technology among the biomass conversion developers.  Not everyone will survive as an independent.  It seems more likely that a leaders will consolidate the best of technologies.

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. United Fuel Technologies, Inc. is included in Crystal Equity Research’s Beach Boys Index in the Biofuels Group.

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