five questions

Five Questions With…

Glenn Payne

Vice President, First Reserve Corp.

1. First Reserve last week acquired a 50% interest in Blue Source LLC, which is an aggregator of greenhouse gas emission reduction offsets. What does that mean?

Blue Source identifies hosts that can reduce their carbon dioxide emissions, works with that company to do so, verifies it with an independent certifier and then aggregates a bank of these verified emissions reductions (VERs or credits) that can be sold to other companies that want to offset their carbon footprint (either voluntarily or as required by legislation/protocol).

2. Where is the U.S. carbon offset market in terms of its lifecycle?

I think it has quickly accelerated into adolescence, but it has an older adult brother in Europe.

3. Many clean-tech startups view this market as a path to future revenue, but also wonder if it first needs to be standardized. What are your thoughts?

I think that eventually – or perhaps just ideally – there will be a federal standardized program. But for the foreseeable future it will be some sort of hybrid patchwork with California on one coast, the northeastern collection of states on the other coast and around 30 various others with varying levels of commitment in the middle.

4. Blue Source’s website contains some pretty unusual language for the corporate world. For example, it says: “Blue Source was created to serve as a vehicle for expressing our desire to honor God in tangible ways. We strive to lead through innovation and integrity, meet real needs of people we encounter, and develop relationships based on more than just commercial objectives, all because we believe our business is a context for accomplishing a large part of God’s purpose for our lives.”

The two company founders are deeply religious, and are very honorable and worthy people. They also owned 100% of the company before the deal was done, and the website hasn’t been updated since. You wouldn’t find that sort of thing on our website, but that isn’t to be disparaging.

5. First Reserve’s portfolio contains alternative energy-related companies like Blue Source, but also a number of oil, gas and coal companies. Is this a diversification strategy?

We don’t consider ourselves to be a conglomerate, so it’s not really a matter of portfolio diversification. Instead, we recognize that there will continue to be a carbon regime, but also that it will be less absolute. So we need to be proactive and know more about all sides of the market so that we are best positioned to capitalize.