Disclaimer

The information in this report has been reviewed by the EPA and Venture Capital Community participants in the Summit. It also has undergone EPA administrative and general 

counsel review. It does not necessarily refl ect the views of the Agency, however, and no 

offi cial endorsement should be inferred.

EPA/600/R-09/023

U.S. Environmental Protection Agency

Offi ce of Research and Development

http://www.epa.gov/ncer

June 2009
This report was prepared by 

The Scientifi c Consulting Group, Inc., Gaithersburg, Maryland, 

under EPA Contract EP-C-05-015, Work Assignment 3-4. 

Paul Shapiro was the EPA Work Assignment Manager.

Report of the EPA–Venture Capital Community Summit: 

Exploring Programs to Commercialize Environmental Technology

Table of Contents

Introduction ...............................................................................................................................................1

Agenda of the EPA-Venture Capital Community Summit .............................................................................3

Summary of the EPA-Venture Capital Community Summit .........................................................................5

Welcome ...........................................................................................................................................5

Introduction to Venture Capital and Growth ....................................................................................6

Introduction to How EPA Operates ..................................................................................................9

Discussion of the Venture Capital Report Recommendations, Especially Related to 

 Beginning and Sustaining Communications ..................................................................................12

Working Lunch – Overview of the New Department of Energy Technology 

 Commercialization Programs .......................................................................................................16

Discussion of Alternative Financing Instruments: Loan Guarantees, Loans, 

 Venture Capital Funds, Grants, etc. ..............................................................................................21

Public Comments ............................................................................................................................26

EPA and Venture Capital Roles and Next Steps ..............................................................................27

Appendices ..............................................................................................................................................33

A. EPA-Venture Capital Community Summit: Potential EPA Follow-Up Activities .......................35

B. List of Summit Attendees ..............................................................................................................36

C. Summit Presentations .....................................................................................................................39

 1. Venture Capital Overview .....................................................................................................39

 2. U.S. EPA: The Context for Promoting New Environmental Technology ............................42

 3. DOE Commercialization: Energy Effi ciency and Renewable Energy ..................................45

D. Stages of Investment ......................................................................................................................48

E. Federal Register Notice for the EPA-Venture Capital Community Summit .................................49

Report of the EPA–Venture Capital Community Summit: Exploring Programs to Commercialize Environmental Technology 1

Introduction

The EPA-Venture 

Capital Community 

Summit: Exploring 

Programs to Commercialize Environmental Technology was convened 

by EPA as part of the Agency’s response to the 

recommendations in the EPA National Advisory 

Council for Environmental Policy and Technology (NACEPT) report titled, EPA and the Venture 

Capital Community: Building Bridges to Commercialize Technology. This Venture Capital Report 

was submitted to EPA’s Administrator in April 

2008. 

NACEPT operates under the Federal Advisory 

Committee Act (FACA), which permits it to make 

consensus recommendations to EPA. NACEPT is 

one of the few EPA FACA groups that provides 

advice directly to the Administrator. The Summit, in contrast, was an EPA meeting that was not 

convened under FACA and the group was not 

asked to reach a consensus or provide recommendations. Ideas put forth by individuals were noted, 

however, and are described in the Summary in this 

report.

The Summit was a public meeting designed to 

address two recommendations in the Venture 

Capital Report: (1) EPA should forge and sustain 

communications with the early-stage investment 

community and (2) EPA should strengthen 

fi nancial support (e.g., loan guarantees, grants, 

revolving loan funds) for environmental technology 

commercialization. The meeting was announced 

in a Federal Register notice (see Appendix E) and 

the agenda included Public Comment time. 

EPA created a Web site (www.epa.gov/ncer/

venturecapital) for the event that includes the 

Venture Capital Report and two prior NACEPT 

reports on how to better coordinate EPA’s 

technology programs and to work with partners in 

the marketplace.

This report contains summaries of the comments 

made by participants during the EPA-Venture 

Capital Community Summit. The report also 

includes three presentations that were made at 

the Summit to provide background information 

for the participants. These presentations were: 

“Venture Capital Overview,” by Emily Baker of the 

National Venture Capital Association; “U.S. EPA: 

The Context for Promoting New Environmental 

Technology,” by Walter Kovalick of EPA Region 5 

(Chicago); and “Department of Energy Technology 

Commercialization: Energy Effi ciency and Renewable Energy,” by Drew Bond of the Department of 

Energy’s Offi ce of Energy Effi ciency and Renewable Energy.

Importantly, the report also includes a list of 

potential follow-up items developed by EPA to 

encourage environmental technology investment 

and commer-cialization. This list is provided as 

an appendix because it was developed after the 

Summit (see Appendix A).

If you have any questions, comments, or interest 

in pursuing these ideas with EPA, please contact 

Paul Shapiro at shapiro.paul@epa.gov. 
2 Report of the EPA–Venture Capital Community Summit: Exploring Programs to Commercialize Environmental Technology
Report of the EPA–Venture Capital Community Summit: Exploring Programs to Commercialize Environmental Technology 3

Agenda of the EPA-Venture Capital 

Community Summit

EPA-Venture Capital Community Summit: Exploring

Programs to Commercialize Environmental Technology

November 12, 2008

AGENDA

Co-Chairs: Rob Brenner, U.S. Environmental Protection Agency (EPA)

Hank Habicht, SAIL Venture Partners

Purpose: To put forward and discuss a set of potential EPA and venture capital community actions to 

catalyze the commercialization of environmental technologies.

Background: This Summit is a followup to the recommendations in the EPA National Advisory Council 

for Environmental Policy and Technology (NACEPT) report, EPA and the Venture Capital Community: 

Building Bridges to Commercialize Technology (April 2008), which is available at www.epa.gov/ncer/venturecapital.

9:30 a.m. – 10:00 a.m. Registration

10:00 a.m. – 10:05 a.m. Welcome

Rob Brenner, Director, Offi ce of Policy Analysis and Review, Offi ce of Air 

and Radiation, EPA, and Hank Habicht, Managing Partner, SAIL Venture 

Partners

10:05 a.m. – 10:25 a.m. Introduction to Venture Capital and Growth 

Emily Baker, Director, Federal Policy and Political Advocacy, National Venture Capital Association

10:25 a.m. – 10:45 a.m. Introduction to How EPA Operates

Walt Kovalick, Assistant Regional Administrator for Resources Management, 

Region 5, EPA 

10:45 a.m. – 12:00 p.m. Discussion of the Venture Capital Report Recommendations, Especially 

Related to Beginning and Sustaining Communication

• Desired Outcome: Develop an initial list of actions that individuals 

believe would enhance communication over the long term

12:00 p.m. – 12:30 p.m. Working Lunch – Overview of the New Department of Energy (DOE) 

Technology Commercialization Programs

Drew Bond, Director for Commercialization and Deployment, Offi ce of 

Energy Effi ciency and Renewable Energy, DOE
4 Report of the EPA–Venture Capital Community Summit: Exploring Programs to Commercialize Environmental Technology

• Desired Outcome: Begin discussion of DOE’s commercialization 

programs and how individuals believe similar programs at EPA could 

advance the Agency’s mission

12:30 p.m. – 2:30 p.m. Discussion of Alternative Financing Instruments: Loan Guarantees, Loans, 

Venture Capital Funds, Grants, etc.

• Desired Outcome: Develop an initial list of actions that individuals 

believe would be helpful in exploring new EPA fi nancial programs

2:30 p.m. – 2:45 p.m. Break

2:45 p.m. – 3:00 p.m. Public Comment

3:00 p.m. – 4:30 p.m. EPA and Venture Capital Roles and Next Steps

• Desired Outcome: Discuss the morning and afternoon lists and ask 

individuals to put forward potential actions they consider most important for EPA and the venture capital community to pursue to catalyze 

the commercialization of environmental technologies

4:30 p.m. Adjournment
Report of the EPA–Venture Capital Community Summit: Exploring Programs to Commercialize Environmental Technology 5

Summary of the EPA-Venture Capital 

Community Summit

Rob Brenner opened the meeting by welcoming everyone to the Summit. He explained that 

he and Hank Habicht were the co-chairs of the 

Summit. Mr. Brenner then asked everyone to 

introduce themselves. He then introduced Paul 

Shapiro and thanked him for planning and organizing the Summit. 

Mr. Brenner described why the Summit was 

of great importance to the U.S. Environmental 

Protection Agency (EPA). Traditionally, the availability of commercially available technologies, such 

as fl ue gas desulphurization devices for power 

plants and catalytic converters on cars, has assisted 

the Agency in the development of standards and 

regulatory policy. More recently, some states such 

as California and Massachusetts have enacted progressive energy and environmental legislation and 

become regional centers for venture capital (VC) 

investments and emerging environmental technology development. Potentially, EPA could learn 

from these state models and determine how the 

Agency could structure programs and regulatory 

policy to encourage the development of emerging technologies that can enhance environmental 

protection. Rather than waiting for commercial 

technologies to become available, EPA may be able 

to become more proactive and infl uence environmentally benefi cial technology development and 

adoption. 

Mr. Brenner explained that rising energy costs and 

impending climate change impacts also are driving 

the Agency to more aggressively investigate new 

energy technologies that offer benefi cial environmental results. The VC community is closely 

attuned to emerging technology development so it 

is very timely for the Agency to initiate communications with this community. 

As a former EPA Deputy Administrator, Mr. Habicht 

expressed his appreciation for the Agency senior 

managers who were participating in the Summit. 

He complimented these managers for their abilities to promote environmental protection and their 

openness to consider new ideas and approaches for 

raising environmental performance. Mr. Habicht 

mentioned the book, The Prophet, by Kahlil Gibran, 

which was popular in the 1960s. That book included a statement that went something like “I wasn’t 

put in this world to make you happy and you were 

not put in this world to make me happy; each of us 

has to do our own thing, but if in the end we fi nd 

each other then it’s beautiful.” Concerning today’s 

meeting, Mr. Habicht explained that the VC community is not in business to make EPA successful 

and vice versa but he hoped that at the meeting 

today each party will have found each other and 

that at the end of the day each of us will say it is 

“beautiful.” 

Clean technology is not a passing fad or a “fl ash 

in the pan.” Mr. Habicht suggested that there is 

a convergence of issues and challenges that has 

not existed before. Rising energy prices have 

affected supply and demand. Global energy use 

is expected to increase three-fold in the next 30 

years; in the past 20 years, energy demand has 

doubled. Seventy percent of this new demand 

is coming from the less developed world, with 

China contributing nearly 30 percent of this new 

demand. Another factor affecting clean technology growth is the amount of “main stream” 

fi nancial capital being committed to this sector. 

Welcome

Rob Brenner, Offi ce of Policy Analysis and Review, Offi ce of Air and 

Radiation, EPA; Hank Habicht, Managing Partner, SAIL Venture Partners
6 Report of the EPA–Venture Capital Community Summit: Exploring Programs to Commercialize Environmental Technology

Every private-sector fi nancial institution—from 

international banks to VC fi rms—is committing 

resources to clean technology. The key issue is to 

put resources behind clean technology “winners” 

so that both investors and the environment will 

benefi t. Mr. Habicht explained that a reasonable goal for today’s meeting is for EPA and the 

VC community to gain a better understanding of 

each other as well as a better appreciation of the 

driving forces and constraints affecting each other. 

He hopes that this will form the foundation for 

establishing a process for ongoing communication. 

Mr. Habicht asked Mr. Shapiro to explain the 

ground rules for the Summit. Mr. Shapiro said 

that the Summit is not a Federal Advisory Committee Act (FACA) meeting; however, it is a 

public meeting and there are some rules that 

apply. The venture capitalists participating in the 

Summit cannot make recommendations to EPA 

nor can they reach consensus on group deliberations. The meeting is designed to seek individual 

rather than group or collective advice. Mr. Shapiro 

cautioned that the group cannot reach agreements 

on issues and that participants should strive to 

direct their comments to EPA and not to each 

other. In summary, Mr. Brenner explained that 

the group can offer specifi c comments to the 

Agency but cannot offer recommendations to EPA 

that were derived through consensus voting. He 

stressed that today’s meeting is an informal session 

but mentioned that a more formal FACA process 

may follow. Mr. Brenner suggested that, in the 

future, EPA may consider forming a VC advisory 

subcommittee as part of the National Advisory 

Council for Environmental Policy and Technology 

(NACEPT) or some other existing FACA committee. 

Based on the Summit agenda, Mr. Shapiro 

explained that the “Desired Outcome” from each 

session will be determined by EPA offi cials who 

will summarize the discussion from each session 

and identify items for future consideration. He 

also mentioned that notice of the meeting was 

published in the Federal Register and that there is 

time set-aside on the agenda between the afternoon sessions for public comments. 

Mr. Habicht suggested that the transition team 

for the new administration may be interested in 

the results of today’s deliberations. Although the 

Summit participants know many of the transition 

team offi cials, he emphasized that the focus of 

the Summit should not be on providing advice 

to the transition team; rather, the focus should 

be on what communication mechanisms can be 

established between government and VC offi cials 

to develop a better clean technology policy. 

Mr. Habicht explained that the purpose of the 

fi rst two presentations is to establish a common 

basis for both EPA and the VC community. The 

fi rst presentation by Emily Baker of the National 

Venture Capital Association (NVCA) will describe 

the VC community, and the second presentation 

by Walt Kovalick will describe EPA. When introducing Ms. Baker, Mr. Habicht indicated that she 

is the director of the NVCA Clean Technology 

Advisory Council. 

Ms. Baker explained that the NVCA Clean 

Technology Advisory Council was established 

2 years ago based on the growing interest and 

investment opportunity in this sector. Over the 

past 18 months, NVCA has developed a clean 

technology public policy agenda and is currently 

lobbying Congress to recognize the signifi cance 

of this sector. Part of the NVCA efforts has 

Introduction to Venture Capital and Growth 

Emily Baker, National Venture Capital Association

(Slide presentation is provided in Appendix C)

included establishing a close relationship with the 

U.S. Department of Energy (DOE) in its energy 

effi ciency and renewable energy activities. Ms. Baker 

expressed her hope that the Summit would provide an opportunity for the NVCA to establish 

better communications with EPA about clean 

technology issues. 
Report of the EPA–Venture Capital Community Summit: Exploring Programs to Commercialize Environmental Technology 7

Ms. Baker described the history and focus of the 

NVCA as a trade association. Initially, the NVCA 

was created to foster communications among 

VC professionals but the association has evolved 

into a public policy and advocacy organization 

for the VC community. The NVCA lobbies all 

congressional committees including those dealing with tax and trade policies, as well as energy, 

environment, and small business committees. 

VC fi rms are small businesses, so the NVCA is 

proactive for small business. The NVCA supports basic research because federal laboratory 

developments—whether from the DOE National 

Laboratories, EPA, or any other agency—can be a 

source of new product and technology ideas for 

venture fi rms. 

Ms. Baker noted that the research data collected 

by the NVCA on venture investments is provided 

in the MoneyTree Report. These data are shared 

publicly and are available online. She commented 

that NVCA’s members are responsible for nearly 

90 percent of the VC currently under management. 

In defi ning VC, Ms. Baker provided an overview 

of the VC life cycle. The process starts with 

VC funds being raised from various institutional 

investors; once suffi cient funds are collected, the 

VC fi rms look for portfolio companies in which 

to make investments. VC fi rms screen hundreds 

and potentially thousands of companies annually 

to identify 8 to 10 companies that will comprise 

their fund portfolio. 

Both fi nancial and management expertise is provided to portfolio companies by venture fi rms. 

Ultimately, venture fi rms want to build a portfolio 

company to the point where it can be a public 

entity or be acquired by a larger entity. VC 

fi rms do not invest in public markets or security 

derivates. They do not leverage or charge fees to 

portfolio companies; nor do these fi rms take hedge 

or short positions in companies. This is the major 

distinction between VC fi rms and hedge funds or 

private equity investments. 

Ms. Baker identifi ed some of the characteristics of 

VC investments. VC investments are long; sometimes as long as 15 years in the life sciences sector. 

The investments focus on innovation and usually 

are high risk and high reward. Forty percent of 

venture-backed companies fail, forty percent break 

even or make minimal gains, and only 20 percent 

make signifi cant gains. In addition, VC builds 

value in companies and the economy. The investment stays in the company and is used for growth 

and venture capitalists bring operational and 

scientifi c knowledge to bear to catalyze growth by 

involving themselves in the day-to-day operations. 

Although venture investments accounted for just 

0.02% of invested capital (about $230 billion 

compared to the nearly $1.5 trillion invested by 

hedge funds), companies that got their start with 

VC accounted for 10.4 million jobs and $2.3 

trillion of revenues in the United States in 2006, 

which was 18% of the Gross Domestic Product. 

Some companies that were originally funded by 

VC include Genentech, Microsoft, Apple, Google, 

FedEx, and Starbucks. Venture-backed companies 

usually outperform their non-venture counterparts 

and current venture-backed companies account for 

more than 400,000 U.S. jobs. Innovations funded 

by VC include the pacemaker, Herceptin (cancer), 

and Integrilin (heart disease). Venture capitalists increasingly are focusing on clean technology 

(solar, wind, carbon capture, and energy effi ciency). 

The Global Insight Report prepared by the NVCA 

offers more details on the economic impact of VC. 

Ms. Baker noted that venture capitalists are 

welcomed by congressional members because 

they bring jobs and economic growth to their 

districts and states. For every VC dollar invested 

in 1970-2001, there was $7.90 in U.S. revenue 

during 2006. For every $28,463 of VC invested 

in 1970-2001, there was one job in the year 2006. 

The tangible benefi ts of venture investments are 

substantial and long term. 

Ms. Baker identifi ed the top 10 states for VC 

investment in 2007, noting that California, Massachusetts, and Texas are the top three among the 

states with more than $19 billion of VC invested. 

Beyond the top 10 states, there have been a lot of 

clean technology venture investments in Colorado 

and New Mexico, probably because of the DOE 

National Laboratories in these states. California, 

Texas, Washington, and Massachusetts lead the 
8 Report of the EPA–Venture Capital Community Summit: Exploring Programs to Commercialize Environmental Technology

top 10 states for VC-backed U.S. revenues in 2006. 

California, Texas, Pennsylvania, and Massachusetts top 

the list for VC-backed U.S. jobs in 2006, employing 

more than 4.8 million workers. Ms. Baker noted 

that one in ten Americans works for a venturebacked company. 

In 2000, venture-backed U.S. revenues were 

$1.5 trillion; they grew to $1.7 trillion in 2003 

and then $2.3 trillion in 2006. The VC-backed 

growth rate of 11.8% from 2003-2006 outpaced 

the 6.5% of total U.S. sales growth. In 2000, there 

were 8.7 million VC-backed U.S. jobs; this number 

grew to 9.4 million in 2003 and to 10.4 million 

in 2005. The VC-backed U.S. job growth rate of 

3.6% outpaced the 1.7% job growth rate of the 

private sector from 2003-2006.

Ms. Baker compared Internet-specifi c investments 

(dollars invested and number of deals) with clean 

tech investments from January 2005 to March 

2008, indicating that there has been a much 

greater increase in clean tech investments since 

2006. Ms. Baker provided data on the investment 

activity in the top fi ve industries—biotechnology, 

software, medical devices and equipment, industrial/energy, and semiconductors—from early 2007 to 

early 2008. There was an increase in investment 

activity in medical devices and equipment and 

semiconductors in early 2008 compared to 2007. 

The other industries experienced no increase in 

investment or a decrease in early 2008.

Ms. Baker identifi ed six federal policy initiatives 

that are needed to drive clean tech: (1) Renewable Portfolio Standard, (2) Renewable Fuel 

Standard, (3) investment tax credits, (4) strengthened CAFE standards, (5) more robust federal 

R&D for energy, and (6) the Federal Government 

as an early adopter and user of clean energy 

technologies. 

In closing, Ms. Baker stated that the NVCA is 

looking forward to working more closely with 

EPA to facilitate new partnerships. She provided 

her e-mail address (ebaker@nvca.org) and encouraged participants to contact her if they wanted 

more information. Ms. Baker thanked the Summit participants for the opportunity to make her 

presentation and asked if there were any questions.

Ira Leighton asked Ms. Baker to identify the 

two most important factors that attract venture 

investments to certain states. Ms. Baker replied 

that the high concentration of university research 

in the top 10 states is one factor and another 

is the spin-outs of innovations from the DOE 

National Laboratories, particularly in states such 

as New Mexico. Historically, another factor that 

has encouraged venture investments is the close 

proximity of portfolio companies to the VC fi rm’s 

offi ces. Most venture capitalists wanted to avoid 

getting on a plane to visit their investment companies. Ms. Baker admitted, however, that this factor 

is becoming less important, particularly with clean 

tech investments. 

Dr. Kovalick asked how cost center-based 

technology investments, like environmental 

technologies, might differ from energy effi ciency 

investment technologies, like solar and wind 

farms that may save industry resources if they are 

installed. Ms. Baker replied that solar and wind 

technologies are attracting investments because 

venture capitalists see a high market potential and 

high return on their investments in these industry 

subsectors. Conversely, some venture investments 

are made in environmental technologies because 

investors believe they can “do well by doing good.” 

Eric McAfee explained his company’s venture 

investments are not based on cost-center or incremental revenue issues, but on the scalability of 

the business model. Venture capitalists tend to 

be most interested in a rapidly growing revenue 

stream from their portfolio investments. Gross 

profi t margins are important to venture investments. Key questions include: What is the 

potential revenue? What are the growth profi t 

margins? What will it cost to get there and how 

quickly can it be done? Rosemary Ripley added 

that EPA needs to think about how to show 

industry that it can make money on environmental 

technology investments. She offered that cap 

and trade technology approaches may be a useful 

example; industry is interested in reducing carbon 

dioxide in the atmosphere and if it can be demonstrated that industry could actually make money 

using these technologies, then the market for them 

would grow rapidly. 
Report of the EPA–Venture Capital Community Summit: Exploring Programs to Commercialize Environmental Technology 9

In the early 1990s when the Clean Air Act Amendments (CAAA) were being negotiated, Mr. Brenner 

explained that EPA asked Smith Barney to conduct 

a study for the Agency on business opportunities 

in the proposed CAAA. Following completion of 

the study, EPA hosted a conference on the clean air 

marketplace that sought to explain that the CAAA 

could offer some signifi cant investment opportunities. Although the compliance technology costs 

associated with some provisions of the CAAA were 

estimated to be very high, these Amendments did 

create some of the initial cap and trade programs 

endorsed by the Agency. 

John Preston added that the potential profi t center 

for primary energy generation is much greater 

than waste avoidance considerations in most clean 

technology investments. He noted that, in the 

early 1990s, there were more than 60 publicly 

traded, hazardous waste cleanup companies; today, 

there are only four companies still in business and 

two of those four are in Chapter 11 bankruptcy 

proceedings. Nevertheless, primary energy generation does create environmental problems, so the 

key is to determine how to generate more energy 

but create fewer environmental problems. A good 

example of an industry where productivity has 

increased while discharges have decreased is the 

chemical industry; during the past 10 years, the 

productivity of the chemical industry rose but its 

generation of hazardous materials decreased. 

Dr. Kovalick explained that his presentation 

would cover EPA’s mission and budget, provide a 

context for how EPA operates and implements its 

mission, and conclude with some of his personal 

observations about the nexus of EPA’s work and 

environmental technology.

EPA is one of more than 20 independent 

regulatory agencies in the Federal Government. 

Although EPA is not a Cabinet department, it has 

Cabinet status. The Agency’s mission is to protect 

public health and the environment. There are 

more than 20 statutes that provide mandates for 

the Agency, including: Clean Water Act (CWA); 

Clean Air Act (CAA); Safe Drinking Water Act 

(SDWA); Resource Conservation and Recovery Act 

(RCRA); Comprehensive Environmental Response, 

Compensation, and Liability Act (Superfund); 

Federal Insecticide, Fungicide, and Rodenticide Act 

(FIFRA); Toxic Substances Control Act (TSCA); 

and others. Beyond environmental media like air, 

water, and land, EPA also has regulatory responsibility for regulating products under FIFRA and 

TSCA. Under TSCA, for example, EPA regulates 

existing and new chemicals. Another statute that 

was not on the slide is the National Environmental 

Introduction to How EPA Operates

Walt Kovalick, Jr., Assistant Regional Administrator, Region 5, EPA

(Slide presentation is provided in Appendix C)

Policy Act (NEPA), which impacts many efforts 

including some energy development projects.

 

EPA’s Fiscal Year (FY) 2008 budget was $7,472 

million. Since the passage of the 1995 Government 

Performance and Results Act, EPA like all federal 

agencies must prepare a 5-year strategic plan. 

Currently, EPA is operating under the 2006-2011 

Strategic Plan (on the Web at www.epa.gov/ocfo/

plan/2006/entire_report.pdf), which identifi es fi ve 

goals: (1) Goal 1—Clean Air and Global Climate 

Change, (2) Goal 2—Clean and Safe Water, (3) 

Goal 3—Land Preservation and Restoration, (4) 

Goal 4—Healthy Communities and Ecosystems, 

and (5) Goal 5—Compliance and Environmental 

Stewardship. Goal 1 accounts for 13.1% of EPA’s 

budget and 2,609 full-time equivalents (FTEs). 

Goal 2 accounts for the largest portion of the 

EPA budget, 36.1% and 2,901 FTEs; most of the 

resources associated with this goal are distributed 

to states for their local water responsibilities. Goal 

3 accounts for 23.6% of the budget and 4,574 

FTEs, Goal 4 for 16.7% of the budget and 3,736 

FTEs, and Goal 5 for 10.5% of the budget and 

3,487 FTEs. 
10 Report of the EPA–Venture Capital Community Summit: Exploring Programs to Commercialize Environmental Technology

EPA’s $7,472 million budget is divided among 

state and tribal assistance grants ($1,222 million), 

operations from non-Trust Funds ($3,175 million), 

operations from Trust Funds ($1,360 million) 

and infrastructure/State and Tribal Grant project 

fi nancing ($1,715 million). 

Dr. Kovalick presented EPA’s organization chart, 

which identifi ed the Agency’s headquarters and 

regional offi ces. The chart explains how EPA is 

organized by environmental media and function. 

Dr. Kovalick noted that each EPA region is organized similar to EPA headquarters with media and 

functional offi ces. 

Dr. Kovalick explained that the regulated community is any business or organization that is 

required to comply with EPA statutory or regulatory requirements. This community includes more 

than 800,000 permitted facilities under CAA, 

CWA, and RCRA; more than 20 million small 

businesses; 80,000 units of local government; and 

millions of regulated facilities under more than 12 

major environmental statutes. Dr. Kovalick pointed 

out that most permitted and regulated businesses 

are regulated by the states, not EPA. For most 

statutes, EPA sets national standards and the states 

implement them on a local basis. State and local 

governments provide most of the environmental 

regulation; these agencies issue most of the permits and conduct most of the enforcement cases. 

With respect to operations and implementation, 

Dr. Kovalick explained that EPA exercises discretion in balancing the mandate given in each 

statute. The different types of traditional regulation used by EPA include technology based (most 

stringent or cost effective), health based (set for 

environmental conditions), market based (sets 

limit for nation/area; facilities get tradable allowances), and use restrictions (exposure restricted 

by label directions or product restriction). The 

market-based, cap and trade allowances are available primarily in the Clean Air regulations, and 

EPA use restrictions are available only through the 

FIFRA and TSCA regulations. 

In the 1990s, EPA began to move beyond “command and control” approaches to environmental 

protection. In general, large stationary and point 

sources are under control in the United States so 

the focus has turned increasingly toward diverse 

nonpoint sources of pollution, such as agricultural 

runoff and salt runoff from highways and other 

sources. For the past 15 years, EPA headquarters 

has been working with the regions on compliance 

assistance, voluntary partnerships, Performance 

Track (beyond compliance), and partnering for 

economic gain/development (e.g., Brownfi elds). 

EPA currently has more than 50 voluntary 

partnership programs to help businesses and the 

public with environmental protection and more 

than 500 companies involved in Performance 

Track, which is a voluntary beyond compliance 

recognition program. EPA also executes more 

than 100 cooperative research and development 

agreements (CRADAs) with private sector organizations annually. 

Dr. Kovalick presented a map that depicted the 

10 EPA regions and the states in each region. 

He mentioned that these regions are consistent 

among federal agencies. Almost one-half of 

EPA’s 17,000-member workforce is located in the 

regional offi ces because nearly all environmental 

programs are deleted to the states and tribes. 

The vast majority of inspection, permitting, and 

enforcement is at the state/tribal level. The 

Agency has approximately 2,400 FTEs dedicated 

to science and technology work and most of these 

staff members are in the Offi ce of Research and 

Development (ORD). Dr. Kovalick noted that 

more than a third of the entire EPA workforce is 

scientists and engineers. About $440 million of 

the Agency’s $760 million science and technology 

budget is extramural. From a technology 

perspective, Dr. Kovalick explained that states do 

not routinely accept the same technologies for 

control and compliance; therefore, a technology 

that might satisfy environmental requirements 

in California might not be acceptable in New 

York. Reciprocity among states on environmental 

technologies for permitting and enforcement 

remains an elusive issue. 

Dr. Kovalick identifi ed six EPA roles in the environmental technology marketplace, including: 

(1) funding agent, (2) technology developer, 

(3) regulator/enforcer, (4) information broker, 

(5) partner in deployment, and (6) user of “fi rst 
Report of the EPA–Venture Capital Community Summit: Exploring Programs to Commercialize Environmental Technology 11

resort.” Dr. Kovalick went on to explain that EPA is 

best as a regulator/enforcer and as a verifi cation agent 

(part of the information broker role). The Agency 

is less experienced as a funding agent, technology 

developer, or user of “fi rst resort.” As verifi cation 

agent, EPA has conducted a very aggressive program 

with more than 400 technologies verifi ed through 

the Agency’s Environmental Technology Verifi cation 

(ETV) Program in the past 15 years. 

Dr. Kovalick presented a diagram that mapped 

EPA’s environmental technology programs to the 

R&D continuum (from research/proof of concept 

to diffusion/utilization). He explained that the 

majority of EPA’s efforts are concentrated in diffusion/utilization. (Each of the programs identifi ed 

in the diagram were fully explained in the handout that accompanied Dr. Kovalick’s presentation.) 

He noted that the EPA technology programs 

directed at earlier stages along the continuum are 

small compared with those of other federal agencies; for example, EPA’s Small Business Innovation 

Research (SBIR) Program is approximately $6 

million annually, whereas DOE’s SBIR Program is 

about $500 million annually. 

Dr. Kovalick identifi ed a number of intersections 

between EPA’s work and environmental technologies. For example, EPA’s researchers and program 

staff have an in depth understanding of technology 

in certain niche areas, such as drinking water treatment, air pollution control, remediation, and diesel 

retrofi t. He described a recent example wherein 

Congress directed that EPA determine the best 

technology available for removing arsenic from 

drinking water for small communities. Likewise, 

EPA has expertise in monitoring and measurement technologies because the Agency specifi es 

the methods to be used to track environmental 

performance for wastewater discharges or air pollution emissions. EPA also has a secondary level 

of understanding of industrial processes to set Best 

Available Control Technology (BACT) and other 

levels. In addition, EPA has an appreciation of 

technology aspects of many sectors through partnering programs such as Design for Environment, 

energy conservation, and others.

Dr. Kovalick stated that, with few exceptions, 

EPA’s mission is not to be a technology development organization. New environmental problems 

are viewed fi rst through a statutory/regulatory lens 

leading to technology inquiry. A recent example 

of this is the use of the Underground Injection 

Control (UIC) Program’s proposal to sequester 

greenhouse gases; the technology did not drive the 

inquiry, it was driven by the statutory requirement. 

Although EPA has expertise in some niches, the 

Agency’s mandates do not call for comprehensive 

monitoring of technology developments. Dr. Kovalick 

also mentioned the Environmental Technology 

Council (ETC), which is a forum established by 

EPA for joint action across program and regions. 

More information on the ETC is available on the 

Internet at www.epa.gov/etop.

In closing his presentation, Dr. Kovalick offered 

some observations about EPA’s role in environmental technology development. Every 6 months, 

EPA publishes a regulatory agenda that charts the 

subjects and issues to be addressed over a several 

year period. This agenda does not provide details 

about levels of the proposed regulations; this 

information will become available as regulations 

are formally proposed in the future. Dr. Kovalick 

pointed out that, by their nature, technologydriven regulations “fi x” best technology and 

because of limited resources, the Agency is unable 

to continuously update the best technology 

identifi ed in regulations. EPA is well vested in 

technology diffusion activities, especially technology verifi cation. The Agency is experienced in 

operating SBIR and grant programs but has no 

mandates for many other fi nancial vehicles. 
12 Report of the EPA–Venture Capital Community Summit: Exploring Programs to Commercialize Environmental Technology

Mr. Brenner suggested that questions for both 

Dr. Kovalick and Ms. Baker can be posed as part 

of the discussion of the second NACEPT Report 

recommendation to “forge and sustain communications with the early-stage investment community.” 

He said that former EPA Administrator Bill Reilly 

and former EPA Deputy Administrator Hank 

Habicht will be remembered for encouraging EPA 

offi cials to “get out more” and interact with states, 

environmentalists, and the business community. 

Several successful new EPA programs such as 

Performance Track and other partnership programs 

grew out of these efforts. Mr. Brenner explained 

that the NACEPT recommendation to forge communications with the venture capital community 

offers a similar opportunity for the Agency. There 

were several specifi c suggestions for the Agency 

to consider within this recommendation and he 

encouraged Summit participants to keep these 

specifi c suggestions in mind during this discussion. 

Mr. Preston complimented Dr. Kovalick and Ms. 

Baker on their presentations. He offered four 

observations. First, in clean technology development, private-sector resources greatly exceed 

federal government resources. The clean technology investments being made by the California 

Public Employees’ Retirement System (CalPERS) 

is an example of the vast resources available in the 

private sector. Three years ago, CalPERS had no 

resources invested in energy and environmental 

technologies; today, more than 50 percent of its 

resources are invested in these technologies. 

Second, there is a pending revolution in innovation in energy and environmental technologies. 

The dramatic escalation of oil prices in the past 2 

years is the principal cause for this revolution. An 

example of this revolution is today’s announcement by C Change Investments (the venture 

capital fi rm founded by Mr. Preston and former 

CalPERS executive Russell Read) to construct the 

world’s largest, most-effi cient synthetic natural gas 

production facility. Because of its high effi ciency, 

operational availability, and production capacity, 

Discussion of the Venture Capital Report Recommendations, Especially Related to 

Beginning and Sustaining Communications

the facility is expected to produce natural gas at 

less than half the cost of other current gasifi cation 

technologies. There will be zero carbon dioxide 

(CO2) emissions from the facility because the 

CO2 generated will be delivered under pressure to 

enhance oil recovery in the Gulf area. 

Third, the U.S. Federal Government should consider 

how to reduce its carbon footprint. Mr. Preston 

explained that C Change Investments is the 

co-developer of a fi rst-of-a-kind ecologically 

sustainable Medical Science Green City to be 

located within Sejong, which is to become the 

new administrative capital of Korea. The $200 

million project is part of a large effort to build 

a highly effi cient, near-zero carbon emission 

new capital where Korea’s national government 

offi ce buildings will be relocated. Globally, 

offi ce buildings consume nearly 40 percent of 

energy requirements and simple innovations like 

high effi ciency compact fl uorescent light (CFL) 

bulbs or improved insulation materials can make 

a signifi cant difference. He suggested that the 

payback for converting to CFL or higher effi cient 

bulbs in U.S. government offi ce buildings could be 

3 years or less. If the Federal Government tried to 

develop an even more effi cient and less expensive 

CFL bulb than currently available, the potential 

impact of such a small yet important lighting 

device would be enormous. He stressed that the 

Federal Government adoption of such small, but 

innovative technologies could establish a signifi cant 

precedence and have a major market impact.

Mr. Preston suggested that the Federal Government consider creating “shoot-offs” to spur 

innovative technology development. In 1993, 

the Federal Communications Commission (FCC) 

sponsored a shoot-off for the design of the high 

defi nition television (HDTV). The FCC was 

unable to decide among the four leading designs; 

so they contacted the Massachusetts Institute of 

Technology (MIT) to identify the best design 

features among each of the four fi nalist systems 

and those features were used as the specifi cations 
Report of the EPA–Venture Capital Community Summit: Exploring Programs to Commercialize Environmental Technology 13

for HDTV. EPA could emulate this approach 

to identify the best light bulb or best insulation 

technology for retrofi ts in buildings. Mr. Preston 

commented that the U.S. construction industry 

is the one of the few sectors that has failed to 

innovate or improve productivity over the past 

50 years. If EPA could push the development of 

some construction-related technologies and the 

Federal Government was as an early adopter of 

these technologies, the results could be signifi cant. 

This approach would encourage the VC community to invest in these technologies, which would 

also offer a short economic payback in energy 

savings for the Federal Government. 

Mr. Habicht noted that EPA teamed with utilities and other organizations in the early 1990s to 

sponsor the development of advanced residential 

technologies, such as the Super Effi cient Refrigerator. These programs were referred to as the 

“Golden Carrot” programs because they were 

market-pull partnerships to demonstrate federal 

leadership in promoting technology advances. 

With very modest resources, EPA and its partners 

leveraged a much larger private-sector investment 

in energy effi ciency and pollution prevention. 

Mr. McAfee suggested that the Federal Government could make it easy for VCs to fund the 

technology advances if the government could help 

the VCs know where to look for such advances. 

Venture capitalists need insights on markets. He 

stressed that the venture community spends a lot 

of time trying to determine the biggest market 

with the highest margins; anything the Federal 

Government can do to identify those markets and 

margins would be of great interest to the 

VC community. 

Mr. McAfee said he is a big fan of setting targets 

and then letting the market determine how to 

get there. One of the Cagan McAfee portfolio 

companies, for example, has developed algae that 

consumes CO2

 and produces ethanol; the demand 

for such a technology might be signifi cant if cap 

and trade programs were established for greenhouse gas emissions. This type of technology also 

should be of interest to EPA because it addresses 

two environmental issues—the elimination of 

CO2 and the production of biofuel. Mr. McAfee 

believes that EPA could signal the establishment 

of a huge greenhouse gas reduction market if a 

national cap and trade system for these gases 

was established. Beyond the VC community, 

Mr. McAfee noted that large utilities, such as 

Duke Energy, one of the largest U.S. electric 

power companies, also would be interested in 

technology investment opportunities created by a 

cap and trade system. 

Mr. Habicht added that large companies such as 

Duke Energy make up the primary membership 

of EPA voluntary programs, such as Performance 

Track, Climate Leaders, and others. These large 

companies are the clean technology buyers for 

many VC portfolio companies. Mr. Preston agreed 

about the value added provided by large companies and noted that utilities are providing one-half 

of the capital requirements for the $3.5 billion 

coal gasifi cation project he mentioned earlier. 

Ms. Ripley agreed that CO2

 emissions reduction 

will create a big market and she believes the 

world is waiting for the United States to show 

leadership on this issue. The new Administration 

should step up and make some decisions about 

how the United States can address the problem; 

then, the VC community can determine the biggest opportunities. She suggested that there may 

be opportunities to use existing emission control 

systems to control CO2 as well. For example, one 

of the NGEN portfolio companies, Powerspan 

Corporation, offers one of the least expensive 

means of capturing CO2 for sequestration. As a 

post-combustion technology, its development grew 

out of another proprietary Powerspan technology 

that offers cost-effective, multi-pollutant (sulfur 

dioxide and particular matter) control of coal-fi red 

power plant emissions. 

Mr. Brenner noted that Frank Alix, Chairman 

and Chief Executive Offi cer of Powerspan, has 

visited EPA and discussed the company’s pioneering cost-effective technologies for controlling coal 

combustion emissions. The interaction the Agency 

has had with Powerspan has been valuable in 

terms of understanding clean energy technologies. 

Mr. Brenner said that these types of interactions 

need to be become more common across the 

Agency. 
14 Report of the EPA–Venture Capital Community Summit: Exploring Programs to Commercialize Environmental Technology

Ms. Ripley supported the earlier proposal for 

creating government-sponsored competitions and 

suggested one for CO2

 reduction technologies. 

Such competitions would force the Agency into 

dialogues with companies that are developing 

advanced technologies.

Larry Starfi eld asked if the venture capitalists 

were aware of some of the regional environmental 

problems being addressed by the Agency, such as 

environmental issues associated with concentrated 

animal feed lot operations (CAFOs). He pointed 

out that CAFOs are a large environmental problem created by dairies, poultry operations, and 

cattle farms. Some states, like North Carolina 

and Arkansas, have supported the development 

of animal waste digesters but all of these systems 

have to be subsidized because they are not cost 

effective. Mr. Starfi eld explained that there is a 

huge market for technologies that would remove 

animal waste problems from the watershed and 

require no government subsidy. 

As stated by Dr. Kovalick earlier, there are nearly 

800,000 permitted facilities in the United States 

and each of these facilities must provide monthly 

reports on permitted operations. The monthly 

reporting requirement has created a huge market 

for lawyers when citizens fi le suits every time the 

permitted limits are exceeded. Mr. Starfi eld noted 

that real-time monitors would prevent the occasions for these suits because permitted facilities 

could be warned when the limits were exceeded 

(for various discharge points) and take corrective 

action immediately. Self-reported violations by 

companies would prevent citizen suits and reduce 

EPA enforcement costs tremendously. 

Daniel Hullah replied that real-time monitoring 

technology probably exists but the reason it has 

not been adapted for use by the permitted facilities is because its other application probably has 

a larger market. Mr. Hullah also noted that the 

businesses may be reticent to adopt technologies 

that would increase their cost by taking more 

frequent corrective actions. It may be capital 

intensive to establish the market for such technologies. 

Mike Shapiro commented that the “monthly 

obligation to report” for water discharge permitted 

facilities is based on the amount of data EPA can 

receive (and review) as well as the data a permitted facility can generate. If data are generated 

instantaneously the same violation problems also 

may apply so citizen suits could continue and 

may even grow. Further, if real-time monitoring 

was adopted by permitted facilities then regulations may need to change to react to the type and 

amount of data reported. 

Outside of water discharge monitoring, Mr. Starfi eld 

pointed out that remote sensing cameras have 

been used in the Houston, Texas, area to monitor 

air emissions from petroleum refi neries. There is 

an economic incentive for refi neries to identify 

and reduce their air emissions because volatilized 

emissions means they are losing product out of 

their stacks. Currently, EPA does not use these 

cameras for emission monitoring and enforcement, 

but the industry has adopted their use for economic reasons. 

Mr. Preston suggested the CAFOs problem may 

be addressed by looking at the issues associated 

with the conversion of biomass to energy. The 

energy density of the animal waste needs to be 

understood because transportation costs may be 

signifi cant for moving the waste from the fi eld 

to the digester. The energy density of petroleum 

coke and coal is about 14,000 BTU per pound, 

while the energy density of animal waste may be 

about 5,000 BTU per pound; thus, the transportation costs for petroleum coke and coal is three 

times less than that for animal waste. Likewise, 

corn can produce 200 gallons of biofuel per 

acre per year, palm oil can produce 500 gallons 

per acre per year, and algae can produce 20,000 

gallons per acre per year. Unfortunately, many 

investors mistakenly invested in corn because of 

the government subsidy and neglected to consider 

the economic capability of the technology. In 

retrospect, it would have been more benefi cial if 

the government would have offered a subsidy for 

“green fuel” independent of the conversion technology. 
Report of the EPA–Venture Capital Community Summit: Exploring Programs to Commercialize Environmental Technology 15

For addressing animal waste, Mr. Preston suggested 

that small anaerobic digesters may be the solution. 

He noted that new $1 billion Bank of America 

Tower in Manhattan (New York City) will have a 

small anaerobic digester in the basement to treat 

all of the waste generated in the building. Initially, 

Bank of America estimated a 5 to 7 year payback 

on their investment; but recently revised its estimate to a 3 year payback on water, waste, and 

energy operations and maintenance. Mr. Shapiro 

mentioned that the nitrogen and phosphorous 

associated with animal waste are not normally 

addressed with methane generation technologies. 

Both the nutrient and pathogen issues need to be 

addressed with these technologies. 

Mr. McAfee explained that venture capitalists love 

to hear about problems; the bigger the problem, 

the more appealing it is to the VC community. If 

distributed anaerobic digesters are the solution for 

animal waste but cost is an issue, maybe a loan 

guarantee program for dairy, poultry, and other 

farms may be the solution. He would like to 

have input from EPA and other federal agencies 

concerning the size of the carbon sequestration 

problem. He commented that legislating sequestration may not be wise, similar to the corn/

biofuel subsidy. If the goal is energy independence 

or cleaner air, then those issues should be legislated rather than the feedstock. 

Ira Leighton stated that, in his experience, environmental requirements are based on ambient not 

technology standards. A new National Pollutant 

Discharge Elimination System (NPDES) permit 

will be water-quality driven and an opportunity 

exists because existing technology will not be 

capable of achieving the new standard. This will 

create a strong driver for emerging technology. 

Unfortunately, it is very challenging for EPA to 

issue a performance-based standard. It is diffi cult 

to establish the performance criteria because 

the regulated businesses and developers are not 

forthcoming about the capability of emerging 

technologies. How can the VC community assist 

EPA in writing performance-driven requirements?

Ms. Ripley suggested that EPA may want to 

consider publishing a Request for Proposals on 

performance standards for specifi c pollutants to 

initiate a dialogue on the issues. Mr. Preston 

said that “necessity is the mother of invention” 

and suggested that rolling reductions with nonperformance consequences may be an alternative 

approach. EPA may want to consider a tax on 

nitrogen runoff in water or CO2 emissions that 

would become effective at some time in the 

future and businesses and/or manufacturers would 

be taxed if they did not reach those discharge 

or emission levels. The cap and trade system 

for reducing air emissions works; with such as 

approach, utilities would be charged with reducing 

CO2

 emissions by “x” amount over so many years. 

Utilities would make investments to reach these 

reduction levels and the levels could be changed 

(lowered) periodically. Mr. Preston suggested that 

this is the approach the Agency has taken with 

the diesel engine emission reductions. 

For nitrogen runoff, fertilizer manufacturers could 

be contacted about similar requirements to reduce 

the runoff into rivers and streams. These manufacturers would make investments to determine 

how to bind the nitrogen to reduce releases or 

pay for their inability to do so. These approaches 

would not only create an investment opportunity 

for venture capitalists but for the entire private 

sector because everyone clearly knows that in “x” 

years it will be worth “$y” to eliminate this problem. 

Mr. Brenner commented that EPA conducted a 

case study to determine why the Agency’s experience with the diesel rules worked so well. It 

turned out that this effort was a good example 

of how effective cooperative processes can be; it 

included “shuttle diplomacy.” EPA talked with 

diesel engine manufacturers and pollution control 

equipment manufacturers to determine what was 

feasible and how hard the Agency could push 

without creating impossible regulatory requirements. 

Based on EPA’s experience to date with cooperative discussions on more stringent regulatory 

requirements, Mr. Brenner suggested that EPA 

could identify “grand challenges” (e.g., CO2

 reductions or animal waste reductions) in the Agency’s 

Strategic Plan. These grand challenges could be 

supplemented with specifi c problems such as 
16 Report of the EPA–Venture Capital Community Summit: Exploring Programs to Commercialize Environmental Technology

lowering fi ne particulate emission requirements, 

expanding diesel retrofi t applications, expanding 

wood stove emission reductions, or addressing the 

pipeline problems associated with ethanol delivery. 

Publication of these grand challenges and specifi c 

problems could be followed by EPA-sponsored 

conferences with venture capitalists and others 

about how to deal with these problems. These 

conferences could build on the type of interactions 

begun with this Summit and help create an understanding on both sides about the issues associated 

with these challenges and problems. 

Mr. McAfee suggested that scalability is one of the 

most important issues to consider. How scalable 

are conferences, Web sites, list serves, and other 

tools of the trade for use in communicating as 

much information as possible about these challenges and problems to the VC community and 

others? There are only a few venture capitalists 

involved in this Summit but there are 470 NVCA 

members and thousands of fi rms involved in 

private equity. The issue is how can EPA maintain 

communications with all of these entities and 

inform them about these challenges and problems. 

Ms. Baker noted that NVCA would welcome the 

opportunity to serve as an avenue for communications with the VC community. 

Mr. Habicht offered three comments to capture 

the morning’s discussion. First, pre-regulatory 

problems such as animal waste control may offer 

an opportunity for fi nancial assistance programs 

such as grants or cooperative agreements to fi nd 

solutions without regulations. 

Second, mechanisms need to be created to 

determine how performance standards can be 

developed without alienating the regulated 

industry. Mr. Habicht noted that, in the past, the 

Hazardous Waste Treatment Council tried to suggest how the hazardous waste treatment standards 

should be lowered and the regulated industry was 

offended by this action because it was not part of 

the dialogue. Venture capitalists do not want to 

be viewed as encouraging more stringent requirements that may not be acceptable to the regulated 

industry; these companies would be customers for 

these emerging technologies and need to be part 

of the dialogue about challenges and problems. 

Third, publicizing grand challenges to be addressed 

by non-regulatory solutions, such as the Golden 

Carrot Super Effi cient Refrigerator challenge, the 

lead phase-down, the chlorofl uorocarbon (CFC) 

phase out, and others, is an attractive suggestion. 

Beyond identifying these challenges and problems, Mr. Habicht suggested that EPA could be 

the source of needed information on unintended 

consequences, life-cycle impacts, and other issues 

that would be useful in determining how to solve 

some of these challenges and problems. 

Working Lunch – Overview of the New Department of Energy Technology 

Commercialization Programs

Drew Bond, Offi ce of Energy Effi ciency and Renewable Energy, DOE

(Slide presentation is provided in Appendix C)

Mr. Bond thanked EPA and the VC community 

for the opportunity to make a presentation about 

DOE’s technology commercialization efforts. In 

the Federal Government, both legislative authority 

and political/management support are important 

in creating new initiatives. He noted that DOE 

Secretary Sam Bodman and Andy Karsner, former 

DOE Assistant Secretary for Energy Effi ciency 

and Renewable Energy, were the inspiration and 

supporters for many of the new DOE technology 

commercialization programs. In addition, Mr. Bond 

explained there are a number of congressional bills 

that will benefi t energy effi ciency and renewable 

energy technologies. He commended EPA for 

organizing the Summit and hoped that it might 

lead to more and improved cooperation between 

EPA and DOE. 

National security, environmental, and economic 

goals form the basis of a robust National Energy 
Report of the EPA–Venture Capital Community Summit: Exploring Programs to Commercialize Environmental Technology 17

Policy but historical data demonstrate the magnitude and urgency of the challenge. Mr. Bond 

pointed out that the United States continues to 

use non-U.S. sources for its energy supply and 

much of this supply is fossil fuel based. All of 

these trends are in the wrong direction. Energy 

security requires that the United States diversify 

its energy mix and reduce its dependence on 

petroleum. Environmental stewardship requires an 

energy policy that reduces greenhouse gas emissions and other negative environmental impacts. 

Economic competitiveness requires the creation of 

a more fl exible, more reliable, higher capacity U.S. 

energy infrastructure and improvement of energy 

productivity.

In describing DOE’s organizational structure, 

Mr. Bond stated that DOE has three principal 

department organizational units—Offi ce of Energy 

(energy R&D); Offi ce of Science (basic science 

research); and National Nuclear Security Administration (nuclear security). The Offi ce of Energy, 

which includes the Offi ce of Energy Effi ciency 

and Renewable Energy (EERE), focuses on applied 

research issues, trying to move projects from basic 

research to the fi eld. 

EERE’s budget was $1,344 million in FY 2008. 

EERE develops a broad range of clean energy 

technologies, including fuels and vehicles (vehicles, 

hydrogen, biomass), renewable power (solar, wind 

and water, geothermal), and energy effi ciency 

(buildings, industrial). EERE also is responsible for 

the Weatherization Intergovernmental Program 

(WIP), which works with states on low-income 

housing retrofi t activities and the Federal Energy 

Management Program (FEMP), which works 

with counterpart federal agencies on the procurement, use, and management of more effi cient 

energy resources. Nearly one-half ($622 million) 

of EERE’s budget is devoted to development of 

vehicles and fuels. 

EERE spreads the federal R&D funding across 

multiple laboratories but works predominantly 

with the National Renewable Energy Laboratory (NREL). Eleven of the 17 DOE National 

Laboratories are supported by EERE, but NREL 

in Golden, Colorado, receives nearly 95 percent of 

its annual funding from EERE. The DOE National 

Laboratories are government owned but contractor operated. For the new NREL contract that 

was announced in October 2008, a cooperative 

arrangement was established whereby the two 

principal contractors—Midwest Research Institute 

and Battelle Memorial Institute—established partnerships with three universities—Stanford, Ohio 

State, and MIT—and the fi nancial community to 

help NREL accelerate the future commercialization and widespread adoption of sustainable 

energy technologies. 

Mr. Bond stated that DOE Program Managers 

have indicated that the “commercialization valley 

of death” has prevented DOE program from being 

as effective as the mangers would have liked. The 

“commercialization valley of death” refers to the 

quantitative challenge of transitioning between 

early adopters and mass market penetration. This 

valley occurs after technology creation in the 

market-focused business and product development stage. The typical investors at this stage are 

entrepreneurial and seed/angel investors. 

Mr. Bond explained that a technological innovation must overcome four challenging transitions 

before reaching the market. The fi rst transition is 

from basic science to applied science. The second 

is from applied science to technology investors. 

The third transition is from technology investors 

to asset investors, and the fourth is from asset 

investors to markets. The EERE Commercialization Team focuses on building bridges between 

the applied scientists and technology investors, 

which is the second of the four transitions. Mr. 

Bond commented that DOE also is interested in 

the issues facing developers at transitions 3 and 

4 but these deal with tax and regulatory policies. 

He noted that public benefi t is only fully realized 

when the product is delivered to the market.

EERE’s commercialization bridges are designed to 

overcome four primary gaps: talent, information, 

capital, and strategy. The “talent bridge” involves 

DOE attracting and hiring personnel that have 

both technical and business skills because both 

skill sets are required to commercialize technologies. The “information bridge” seeks to build 

effective communications between DOE staff and 

technology investors. Mr. Bond noted that techni-
18 Report of the EPA–Venture Capital Community Summit: Exploring Programs to Commercialize Environmental Technology

cal language fails to resonate with the business 

community. The “capital bridge” is the recognition 

that the Federal Government can play a key role 

in early stage seed funding. The Federal Government may have a higher “risk tolerance” than even 

angel investors on technology development issues. 

VCs are more likely to fund business plans and 

prototypes than research papers and competition for VC funding is stiff. The “strategy bridge” 

tries to cultivate and promote policies that would 

impact the development of all EERE technologies. 

Best practices have been developed to foster a 

culture of innovative. 

Built off of a proven VC model, the Entrepreneur 

in Residence (EIR) Program forms the primary 

plank of EERE’s “talent bridge.” This is a well 

known model that has been used in the VC community to develop knowledgeable investors and 

company managers. A fundable business needs a 

technology that works and a market ripe to sell 

into, but most importantly it needs an entrepreneur who can build the business plan, assemble 

a management team, and raise capital. VCs favor 

experienced entrepreneurs with a track record of 

identifying promising technologies and building 

markets.

DOE’s EIR Program connects leading scientifi c and business talent. Through a competitive 

solicitation process, three DOE National Laboratories—NREL, Sandia, and Oak Ridge—established 

the pilot EIR Program. The National Laboratories 

partner with a VC fi rm to sponsor the EIR. The 

VC fi rm identifi es, hires, and mentors the EIR 

who is placed in the National Laboratory. The 

EIR mines the laboratory intellectual property and 

drafts business plans for the commercialization of 

technologies developed by the National Laboratory. Some of the key criteria DOE used to select 

the VC fi rms included their size and track record 

(in the clean technology sector) with commercializing portfolio company technologies, and their 

experience with EIRs. EERE provided $100,000 

matching-funds and full access to the respective 

National Laboratory. The program also includes a 

pre-negotiated standard equity share license agreement. 

Kleiner and Perkins was selected for the EIR 

position at NREL, Foundation Capital for the EIR 

position at Sandia, and Arch Ventures (formerly 

spun out from the Argonne National Laboratory) 

for the EIR position at Oak Ridge. Mr. Bond 

expects that the EIR Program will cause a cultural 

change within each of the three participating 

National Laboratories as well as across the Department toward recognition of the value applied 

research can offer for technology commercialization. 

The Equity Share License Agreement, which is 

tailored for entrepreneurs and small businesses 

with tight budgets, forms a primary plank in 

the “strategy bridge.” Traditionally, the DOE 

National Laboratories required an up-front large 

cash payment in licensing fees, making traditional 

licensing agreements expensive and time consuming to negotiate. Small entrepreneurial companies 

often are more willing to give up equity rather 

than offer cash to license emerging technologies. Built off the Stanford University license, 

the Equity Share License has been pre-negotiated 

with VC general counsels, National Laboratory 

general counsels, and DOE general counsel. DOE 

adopted the Equity Share License Agreement as a 

replacement for traditional licenses to attract more 

entrepreneurial interest in National Laboratorydeveloped technologies. 

Designed to introduce investors to technology 

opportunities, the Technology Commercialization 

Showcase forms the primary plank of the “information bridge.” Many EERE funded technologies 

stall in the “commercialization valley of death” 

simply because the innovation has not been clearly 

communicated to the business community. DOE 

challenged the EERE Program Managers to identify 8 to 10 of the most promising technologies 

in their portfolios. DOE created simple, layman’s 

descriptions of the innovation opportunities, 

and then invited prominent investors to a 2-day 

conference showcasing the technologies. EERE 

started these Commercialization Showcases in 

2007. Twenty-four venture capitalists participated 

that fi rst year and the number increased to 80 

venture capitalists in 2008. 
Report of the EPA–Venture Capital Community Summit: Exploring Programs to Commercialize Environmental Technology 19

To illustrate how the technologies are described 

in simple layman’s terms, Mr. Bond described the 

case study of low-cost carbon fi ber technology 

as a lightweight replacement for structural steel. 

The problem is that carbon fi ber currently is too 

expensive for broad application ($12-30/lb vs. 

$5-8/lb). The Oak Ridge National Laboratory 

has developed technologies to reduce the cost 

of carbon fi ber production by utilizing low cost 

feedstocks (low-cost textiles and renewable lignin) 

and advance processing methods (thermo-chemical 

stabilization, rapid oxidation, and microwaveassisted plasma carbonization). Low-cost carbon 

fi ber reduces vehicle mass by up to 40 percent, 

which increases fuel economy up to 25 percent. 

Three patents have been issued on the technology 

and fi ve patents and seven invention disclosures 

have been fi led.

Four of the processes have been reduced to 

practice (microwave-assisted plasma carbonization, textile-based precursors, thermo-chemical 

stabilization, and plasma oxidation). The time to 

availability is 3 to 5 years, and the capital needs 

include a 2-4 MM lb/year carbon fi ber plant that 

is expected to cost $18-22 million. 

The Technology Commercialization Fund, designed 

to fi ll the gap between R&D and VC funding, 

forms the primary plank for the “capital bridge.” 

Because innovations struggle to fi nd fi nancing following completion of the research and prior to VC 

funding, the Technology Commercialization Fund 

offers fi nancing for National Laboratory technologies that are not yet proven at the bench scale. 

The Fund requires 50-50 DOE-industry matched 

funds. The funds are restricted to prototype development, demonstration, and deployment, and they 

cannot be used for further scientifi c research. The 

Fund is designed to complement angel investment 

or early stage corporate product development. 

Eight of the 13 National Laboratories received 

fi nancing from the Technology Commercialization Fund in 2008. The funding decisions are 

based on the potential for market opportunity, the 

likelihood of commercial success, the management 

team, DOE priorities, and private-sector partners. 

The Fund is a “carrot” to attract private-sector 

partners to examine the National Laboratories’ 

intellectual property portfolios. Resources for 

these funds was established through Section 1001 

of the 2005 Energy Policy Act, wherein DOE was 

tasked with setting aside 0.9 percent of its annual 

budget for applied research to be used to provide 

matching funds with private partners to promote 

promising energy technologies for commercial 

purposes. 

The EERE Commercialization Team pursues an 

aggressive schedule to accelerate the deployment 

of advanced energy technologies. Mr. Bonds 

presented a timeline that identifi ed the many 

activities undertaken by EERE to support each of 

the four bridges described earlier. For the “talent 

bridge” the activities included EIRs working in 

the laboratories, Senior Executive Service (SES) 

Advisors on board, Summer Associates at DOE, 

and Commercialization Fellows at NREL. Mr. Bond 

explained that the SES advisors are 3-year SES 

appointments that were created to bring into 

DOE business and fi nance executives to help 

EERE with its technology commercialization 

efforts. Mr. Bond stated that he holds one of the 

three current appointments in these positions. 

The Summer Associates at DOE are second-year 

Stanford University students seeking a Master 

of Business Administration (MBA) degree who 

work at DOE as interns on various energy-related 

projects. EERE expects to reach out to Ohio 

State University and MIT MBA Programs in the 

future for interns, given their partnership with 

NREL. The Commercialization Fellows at NREL 

are business-minded individuals (up to three 

business persons annually) selected to help NREL 

push intellectual property development at the 

laboratory. 

In addition to its efforts to facilitate the second 

transition from applied science and technology 

investors, the EERE Commercialization Team 

advises many of DOE’s public-private initiatives 

that address the subsequent transitions. Mr. Bond 

described a few examples. In January 2008, 

EERE signed an agreement with the Governor of 

Hawaii creating the Hawaii Clean Energy Partnership. This bipartisan agreement was created to 

help Hawaii implement its Renewable Portfolio 

Standard (RPS). The Hawaii RPS is to reach 20 

percent use of eligible energy effi cient and renew-
20 Report of the EPA–Venture Capital Community Summit: Exploring Programs to Commercialize Environmental Technology

able energy technologies by 2020. Hawaii has 

one of the highest electricity rates in the United 

States—27 cents a kilowatt hour in Oahu and 49 

cents a kilowatt hour in Kauai. Ninety-fi ve percent of Hawaii’s energy is from oil and 99 percent 

comes from non-U.S. sources. The goal for the 

Partnership Program is for Hawaii to achieve 70 

percent of its energy from renewable sources by 

2030. 

The DOE Loan Guarantee Program was created 

as a result of the Energy Policy Act of 2005. 

DOE received appropriations (up to $4 billion) 

to offer loan guarantees in 2006. More than 140 

companies responded to the initial DOE loan 

guarantee solicitation, and in 2007, 16 companies 

were selected from the solicitation and asked to 

submit full proposals. In 2008, DOE received 

up to $38.5 billion in additional loan guarantee 

appropriations. These additional appropriations 

were provided for nuclear energy, fossil energy, and 

energy effi ciency and renewable energy technology 

development; $10 billion was slated for energy 

effi ciency and renewable energy technologies. 

The current solicitation for energy effi ciency and 

renewable energy technologies has been extended 

from December 31, 2008 to February 26, 2009. 

This solicitation focuses on three issues: (1) building 

a better “widget” (e.g., an advanced technology); 

(2) building the widget domestically (e.g., manufacturing capabilities in the United States); and 

(3) putting together the widgets in a way that 

they have not been put together before. Regarding this third issue, Mr. Bond explained that DOE 

is interested in proposals that offer the integrated 

deployment of energy effi ciency and renewable 

energy technologies. The issue of concern is how 

to deploy technologies that are scalable? How can 

wind energy, for example, be matched with energy 

storage (e.g., battery operated vehicles)? 

Mr. Bond cautioned that DOE and other federal 

agencies cannot operate at the speed of business. 

This is clearly seen in implementation of the DOE 

Loan Guarantee Program, which is 3 years old and 

DOE has not yet issued the fi rst loan guarantee. 

DOE is thinking about ways to make the Loan 

Guarantee Program more “small business friendly.” 

Most energy effi ciency and renewable energy 

technology development companies that have 

expressed an interest in loan guarantees are large 

(e.g., $100 million revenues); DOE is interested 

in attracting smaller companies (e.g., $25 million 

revenues or less) for loan guarantees as well. 

DOE will be establishing a Finance and Investment federal advisory committee to assist the 

Department with its Loan Guarantee Program 

and other technology commercialization and 

deployment efforts. According to Mr. Bond, the 

establishment of this federal advisory committee 

was mandated either by the Energy Policy Act of 

2005 or the America COMPETES Act. 

In closing his presentation, Mr. Bond provided 

e-mail addresses for the SES Advisors of the EERE 

Commercialization Team, which in addition to 

himself includes Carol Battershell and Wendolyn 

Holland. Mr. Bond thanked everyone for their 

attention and asked if there were any questions. 

Mr. Preston complimented Mr. Bond on his presentation but expressed his concern that DOE had 

yet to issue a single loan guarantee. He cautioned 

that failure to move quickly is the “kiss of death” 

for developers and investors. Mr. Preston said he 

helped developed the “fast track” option for the 

Department of Defense’s (DOD) SBIR Program 

and he would be glad to offer suggestions from 

this experience to DOE. Mr. Bond responded that 

David Frantz, Director of the DOE Loan Guarantee Program, is seeking advice and would be 

interested in hearing any suggestions to improve 

his program. 

Ms. Ripley asked if the Loan Guarantee Program 

would make loans to small companies that are 

pre-revenue or if the Program was directed only 

to post-revenue companies. Mr. Bond replied that 

the Loan Guarantee Program favors companies 

that are post-revenue. The Program has to be selfsustaining and there has to be a high probability 

of repayment of the loans. In addition, there are 

four substantial fees associated with the Program 

that make it more favorable for post-revenue 

companies. The application fee alone ranges from 

$75,000 to $125,000, depending on the size of 

the project. The credit subsidy fee also is substantial. This fee is the government’s estimate of 

the risk level associated with each project. The 
Report of the EPA–Venture Capital Community Summit: Exploring Programs to Commercialize Environmental Technology 21

amount of this fee has not been publicly release 

yet; the Offi ce of Management and Budget (OMB) 

and DOE are still working on this issue. Even 

with these fees, the unpredictably of when a loan 

guarantee will be offered continues to hamper the 

Program. 

Mr. Leighton asked about capital versus operating 

costs for energy effi ciency and renewable energy 

projects. In New England, he explained, a lot of 

effort is expended to maintain communications 

with state energy regulators regarding local energy 

policy. There is more than $400 million in “system benefi t charges” in New England. He asked 

if DOE is connected with state energy regulators 

to determine how the use of energy effi ciency and 

renewable energy technologies will affect state rate 

payers and other local energy generation policies. 

Mr. Bond replied that, in general, his offi ce does 

have responsibility for these issues. He explained 

that if consumers can overcome the higher capital 

costs for renewable energy sources, then the 

operating costs work to their advantage because 

they often are negligible. Mr. Bond noted that 

to achieve its 70 percent RPS goal by 2030, 

Hawaiian offi cials will have to work with their 

state energy regulators and state utilities. This 

also will require Hawaii to look at energy policy 

mechanisms in other states and potentially other 

countries to determine what it can adopt. About 

a month ago, a voluntary agreement was signed 

with the state utility to determine how it can 

become a partner in Hawaii’s RPS program. 

Issues that are being investigated include feed-in 

tariffs, smart metering, and other utility programs. 

Mr. Bond also noted that the DOE FEMP 

responsibilities include understanding state energy 

regulatory issues. 

Mr. Preston noted that, for investors, the up-front 

capital costs are the biggest barrier to most energy 

effi ciency and renewable energy technology deals 

in the clean technology sector. 

Mr. Habicht commented that, in the past in New 

England, air regulators have met with utility regulators. At the federal level, both EPA and DOE 

should establish communications with the Federal 

Energy Regulatory Commission (FERC) because 

utilities are very sensitive to energy regulatory 

policies. 

Mr. Habicht stated that the DOE presentation 

offered some useful insights into how current 

federal programs work and this can provide the 

basis for the discussion of alternative fi nancing 

instruments. 

Mr. McAfee noted that DOE has developed a 

useful roadmap for fi nancial instruments for large 

companies that have good credit ratings from 

Moody’s or Standard and Poor’s. Unfortunately, 

venture capitalists do not work with companies 

of this size and revenue status. Mr. McAfee 

suggested that DOE and other federal programs 

have to extend their fi nancial assistance programs 

beyond Fortune 50 companies. His opinion is that 

the DOE Loan Guarantee Program needs to be 

amended. If EPA is considering a loan guarantee 

program, the Agency should examine the programs 

Discussion of Alternative Financing Instruments: Loan Guarantees, Loans, Venture 

Capital Funds, Grants, etc.

of the U.S. Department of Agriculture (USDA). 

Mr. McAfee explained that one of the Cagan 

McAfee portfolio companies is at USDA today 

securing a loan guarantee approval. The application was submitted just 30 days ago, and it is 

being approved today. The funding will be available in 30 days. The USDA has a good template 

for effectively executing loan guarantees and other 

federal agencies should learn from that experience. 

Mr. McAfee stressed that the DOE Loan Guarantee Program can be an important accelerator for 

the clean technology sector but the Department’s 

inability to process a loan is hurting the Program 

and the industry. Given the status of the current 

credit markets, Mr. McAfee suggested that DOE 

is now the “perfect partner” to assist the clean 

technology sector. He encouraged EPA to offer 
22 Report of the EPA–Venture Capital Community Summit: Exploring Programs to Commercialize Environmental Technology

DOE its respected scientifi c expertise to help the 

Department more effectively execute its fi nancial 

assistance programs for clean technology. 

Mr. Preston noted that DOE is a much needed 

industry partner for scale up of energy projects. 

DOE is fi lling a gap in energy project fi nancing 

and has to concentrate on eliminating the time 

delay in processing loan guarantees. Mr. McAfee 

stressed that DOE needs scientifi c help in executing its fi nancial assistance programs, adding that 

the only internal scientifi c resource the Department has is NREL. He pointed out that clean 

technology investments are capital intensive, longer 

term investments unlike Internet investments 

that were less expensive and had short-term exit 

strategies. DOE has a good team, but Mr. McAfee 

emphasized that the Department needs external 

assistance to help speed up the execution of its 

Loan Guarantee Program. 

Mr. Brenner mentioned that NREL has sought to 

establish better working relationships with EPA, 

but acknowledged that the Agency has to be more 

proactive in collaborating with NREL. He asked if 

specifi c mechanisms and/or scientifi c issues could 

be identifi ed that should be pursued between the 

organizations. 

Mr. McAfee noted that there is a leadership 

transition underway at DOE because the Assistant 

Secretary for Energy Effi ciency and Renewable 

Energy will not be nominated for several months. 

He suggested that EPA should use this time to 

discuss internally the issues that should be taken 

up with DOE so when the new Assistant Secretary is confi rmed, EPA is prepared to meet to 

discuss potential collaborations. In the interim, 

Mr. McAfee encouraged EPA offi cials to meet with 

DOE’s current senior management to offer the 

Agency’s assistance. 

Mr. McAfee encouraged DOE to have a rolling 

solicitation process for its Loan Guarantee Program. Rather than having an annual or biannual 

solicitation process, DOE should seek proposals 

monthly or quarterly. He suggested that DOE 

treat its Loan Guarantee Program as a bank that 

can offer loans routinely to technology developers. 

Mr. McAfee asked if the DOE Loan Guarantee 

Program had an equity component. Mr. Bond 

replied that technology developers need to provide 

20 percent equity in their proposed energy projects. Of the remaining 80 percent project cost, 

100 percent is guaranteed. 

Mr. McAfee noted that the source of the 20 

percent equity is key for the investment returns 

to venture capitalists. In the State of Oregon, for 

example, up to $18 million in grants are available 

from the state for ethanol plants. Therefore, to 

receive a $180 million DOE loan guarantee for an 

Oregon ethanol plant, venture capitalists only have 

to provide $18 million in equity. Mr. McAfee 

pointed out that if DOE requires the 20 percent 

equity to be solely provided by investors, the 

potential returns are greatly reduced and investors 

are less likely to participate in such projects. 

Mr. McAfee noted that DOE should expand its 

commitment to energy independence and treat the 

issue like a “war for energy independence.” 

With regard to fi nancing technology projects, 

Mr. Habicht explained that some of the critical 

elements are: the probability of success of the 

project, a proven track record of the project sponsors, and the overall fi nancial plan for the project. 

He noted that loan guarantees require suffi cient 

coverage for cash fl ows and debt to protect against 

defaults. Although many loan guarantees and even 

some grant programs favor large companies, most 

federal grant programs are oriented toward small 

companies where the probability of success may 

be the same but the stage and level of investment 

are smaller. A better set of metrics for success 

may need to be developed for small business grant 

programs to illustrate how useful these programs 

are in technology development. With its technical expertise, EPA can be a resource for investors 

through its technology validation and verifi cation programs. These programs can help address 

effectiveness and cost issues for investors and 

technology customers as well. 

Because of the large size of the projects (e.g., 

$100 million plus) being considered under the 

DOE Loan Guarantee Program, some studies 

have been conducted on the credit-to-risk ratios 
Report of the EPA–Venture Capital Community Summit: Exploring Programs to Commercialize Environmental Technology 23

anticipated for these projects. The conclusion is 

that the size of these ratios is much higher than 

current USDA loan guarantees and it is unknown 

how signifi cant these ratios will be in determining 

who will receive a DOE loan guarantee. 

Mr. Leighton cited the EPA New England (Region 

1) experiment with the EPA SBIR Program as a 

possible model for other regions to emulate to 

spur environmental technology development. The 

region worked with ORD to develop the fi rst targeted EPA SBIR solicitation focused on a regional 

environmental problem. One of the regional 

needs was for a device to assess the level of lead 

in soil. X-Ray Fluorescence (XRF) portable 

detectors were identifi ed as appropriate devices 

for this application. Because most environmental 

regulations are methods-driven, EPA New England 

had to work with the Offi ce of Pollution, Pesticides, and Toxic Substances (OPPTS) to verify the 

reliability of these detectors for lead soil analysis. 

It took Region 1 18 months to convince OPPTS 

about the effi cacy of this technology because it 

required a change in the lead detection methods 

to allow its use.

Mr. Starfi eld offered another example of methoddriven requirements. He explained that the 

current method for detecting leaks from petroleum refi neries is a sniffer leak detector. EPA 

Region 6 wanted to use infrared cameras for leak 

detection rather than sniffers but was stymied 

because of the Method 21 requirements for 

volatile organic compound emissions, which were 

based on sniffer technology exclusively. Petroleum 

refi ners are using infrared cameras but get no 

credit for doing so because Method 21 has not yet 

been modifi ed. When Method 21 ultimately is 

changed to allow the use of both technologies, it is 

expected companies will have the choice to select 

either technology for their compliance assurance. 

At the EPA Science Forum in May 2008, Mr. 

McAfee noted that there was some discussion 

about how the Agency can communicate its fi ndings about technologies. He explained that EPA 

is in a unique position to offer its opinion about 

what adds value to a technology. These opinions 

should not be recommendations but objective 

fi ndings that can be widely communicated. 

Another suggestion offered by Mr. McAfee was 

the X PRIZE. He explained that, in 2004, the 

X PRIZE Foundation awarded its largest prize in 

history for a spacecraft capable of carrying three 

people into space, twice within 2 weeks. Even 

though EPA may not be able to offer a $10 

million prize, the Agency could announce a competition for the best form of carbon sequestration 

or some other environmental challenge and select 

the best proposal for possible technology application by industry, venture investors, and others. 

Ms. Baker commented that one issue that needs to 

be addressed is the ineligibility of venture-backed 

companies for participation in the SBIR Program. 

This has become an issue with the National Institutes of Health SBIR Program and more recently 

with the DOE SBIR Program. Ms. Baker noted 

that the NVCA is lobbying Congress to clarify the 

Small Business Administration’s (SBA) affi liation 

rules and ownership defi nitions for venture-backed 

businesses. Currently, if more than 51 percent of 

a company is owned by a venture capitalist then 

that company is ineligible for SBIR consideration. 

April Richards, one of the EPA SBIR Program 

Managers, noted that EPA has not experienced 

this problem with its SBIR applicants; probably 

because the program is small in comparison to 

those of other federal agencies. Mr. Leighton 

noted, however, that there are reciprocity issues 

between federal agencies with respect to SBIR 

Programs. He noted that the recipient of an EPA 

Phase I SBIR award for development of the XRF 

detection technology could not seek Phase II funding through the DOD SBIR Program because of 

differences between the two programs. 

Mr. Preston commented that MIT was contacted 

by DOD more than 10 years ago to help rethink 

the Department’s SBIR Program. MIT helped 

DOD create a “Fast Track” component for its 

SBIR Program wherein the award time between 

Phase I and Phase II could be reduced and other 

considerations given to the company if the Phase 

I recipient could attract outside (private sector) 

investors who will match the SBIR Phase II funding. DOD SBIR projects that obtain such outside 

investments and qualify for the Fast Track can 

receive interim funding of $30,000 to $50,000 
24 Report of the EPA–Venture Capital Community Summit: Exploring Programs to Commercialize Environmental Technology

between Phases I and II and be evaluated for 

Phase II award under a separate, expedited process. Ms. Richards pointed out that DOD has 

a $1 billion SBIR Program, while EPA has a $4 

million SBIR Program. She noted, however, that 

EPA does offer an incentive for Phase I recipients 

to seek third-party investments but the size of the 

incentive is small compared to those offered by 

DOD and some other federal agencies. 

Jeff Heimerman noted that Ms. Richards and other 

EPA SBIR Program staff members are working 

with other federal agency SBIR Programs to identify opportunities for technology developers in the 

clean technology sector. Mr. Heimerman said EPA 

is working to make these other sources of capital 

more transparent to everyone. 

Dr. Kovalick asked if the list of SBIR companies 

from EPA and other federal SBIR Programs would 

be useful to venture capitalists. Mr. Preston 

replied that receipt of SBIR funding is not as 

important to venture capitalists as the company’s 

management team. If a company receives multiple SBIR awards, it often is viewed by venture 

capitalists as a “professional SBIR recipient.” Venture capitalists care more about the substance than 

the hype. Mr. Preston added that the EPA New 

England XRF technology example was a huge 

success story; the company recently was purchased 

by a large organization that will market the technology nationally. 

Mr. Habicht agreed that small businesses that 

market their ability to receive multiple SBIR 

grants is a “turn-off” for venture capitalists because 

such companies think the government is their 

client rather than the marketplace. Dr. Kovalick 

suggested that EPA could provide information 

about its SBIR recipients at future meetings with 

the venture capital community to allow investors 

an opportunity to determine their interests, if any. 

It was pointed out that some technologies may 

only be suitable for design applications and scaling up a technology beyond its design capacity 

may not be possible. An energy technology 

designed for 50 megawatt capacity applications, 

for example, may not work when it is scaled up 

to 200 megawatt requirements. Sometimes small 

businesses are seeking information, rather than 

funding, from the government about permitting 

issues or quality assurance metrics to verify that 

their technology can be replicated. In some cases, 

venture investing is viewed negatively by small 

companies because too much equity and leverage 

has to be sacrifi ced to get venture funding. EPA 

needs to examine the value proposition offered 

by clean technologies because problems could be 

shifted from one environmental media to another. 

Historically, EPA has not been a technology fi nancing agency and Mr. Habicht asked, based on the 

discussions so far, if there are fi nancial assistance 

instruments that the Agency should consider in 

the future. Ms. Ripley replied that EPA should 

consider small grant programs for pre-revenue 

companies. She suggested that Canada offers a 

good model for highly successful applied research 

programs. One of the biggest programs is the 

$3 billion Scientifi c Research and Experimental 

Development (SR&ED) Program. Basically, this 

is a tax credit program for which Canadian companies receive a federal tax credit of up to 35 

percent for investments up to $2 million and a 

20 percent tax credit for investments larger than 

$2 million. The Program has been tremendously 

successful in encouraging technology development 

across Canada. 

Mr. Leighton suggested that perhaps EPA should 

hold technology development forums around 

the practice areas known best to the Agency. 

Recently, EPA New England sponsored a technology development forum on waste sites, specifi cally 

Brownfi elds sites and old landfi lls. EPA asked 

developers and investors involved in cleaning up 

these sites to offer their perspectives on what was 

done right and wrong, and how EPA could help 

others clean up sites in the future. Perhaps, a 

similar forum could be planned among EPA, DOE, 

and USDA and developers and investors could 

offer their perspectives on how the three agencies 

might cooperate to solve mutual problems. 

Mr. Preston agreed that this could be a very 

useful approach for addressing cross-Agency 

problems and identifying Agency-specifi c needs. 
Report of the EPA–Venture Capital Community Summit: Exploring Programs to Commercialize Environmental Technology 25

This approach also could circumvent some of the 

limitations EPA and others may face in technology commercialization such as the lack of new 

resources to support technology development and 

the inability to pick technology winners. The 

sponsorship of such forums by EPA and other 

federal agencies could help identify technology 

trends, Agency challenges, and federal energy 

requirements for light bulbs, insulation, and other 

building-related issues.

For the past several years, EPA has made a heavy 

investment in technology verifi cation. Mr. Brenner 

asked if this should continue to be a strong investment for the Agency. Mr. Preston confi rmed 

that technology verifi cation should continue to 

be provided by the Agency. Mr. Hullah agreed, 

noting that the technology verifi cation provided by 

NREL has helped investors evaluate the effi cacy of 

those technologies.

James Rea, SiteStories, suggested that the 

President’s Green Chemistry Challenge Award 

has provided some important recognition for 

sustainable technologies. Although there are no 

resources associated with these awards, they have 

provided national credit for innovative technologies. Another program is EPA’s People, Prosperity 

and the Planet (P3) Student Design Competition 

for Sustainability. Although the P3 competition 

does not offer much funding, it has resulted in 

the creation of several small innovative technology 

companies.

Mr. Habicht noted that, to date, EPA has developed two types of technology programs: 

✧ Statutory programs such as Best Available 

Control Technology (BACT) required on 

major new or modifi ed sources of air pollution 

and Lowest Achievable Emission Rate (LAER) 

required on major new or modifi ed sources of 

air pollution in non-attainment areas, and 

✧ The ETV Program that does not have strict 

statutory requirements but offers an objective 

analysis of several different media-specifi c 

technologies. He noted that ETV is not the 

EPA “seal of approval” for a technology. 

Mr. Habicht suggested that it might be useful to 

discuss how ETV could be better structured and 

communicated to satisfy investor needs. 

Mr. McAfee cautioned that any technology 

verifi cation program needs to offer intellectual 

property protection. He explained that some of 

his portfolio companies have not used the NREL 

verifi cation program because it does not offer 

such protection. Mr. Habicht noted that EPA’s 

pesticides and toxics programs have good Confi -

dential Business Information (CBI) procedures and 

requirements that work. Mr. McAfee replied that 

if a company’s intellectual property is protected 

and the Agency can verify the technology, then 

this information could be highly useful to DOE in 

implementing its fi nancial assistance programs. 

Mr. Preston warned that EPA may not be able to 

go too far in verifying a technology. 

Sarah Bauer, EPA ORD, described the Agency’s 

Federal Technology Transfer Act (FTTA) Program 

that includes protection of intellectual property 

rights. EPA is in the process of developing an 

Agency-wide position on intellectual property 

rights. EPA also has a large number of patents 

that are available for review by investors and has 

partnered with several businesses through CRADAs. Sally Gutierrez, Director of EPA’s National 

Risk Management Research Laboratory (NRMRL) 

in Cincinnati, Ohio, explained that NRMRL 

routinely validates technology performance and 

works to understand other technical and economic 

issues associated with technology development. 

This experience has allowed NRMRL to provide 

detailed advice and data to EPA regional offi ces, 

headquarters offi ces, and states. NRMRL also 

has been contacted by venture capitalists about 

specifi c issues concerning technologies and the 

laboratory is prepared to continue this service in 

the future. Mr. Leighton added that the Agency’s 

ability to write performance-based objectives rests 

on an experienced workforce and the ability to 

offer programs like ETV. 

Ms. Ripley asked if EPA is writing methods-based 

or performance-based rules. Mr. Leighton replied 

that EPA historically has written methods-based 

rules, which work well for monitoring require-
26 Report of the EPA–Venture Capital Community Summit: Exploring Programs to Commercialize Environmental Technology

ments; however, the Agency needs to write 

performance-based rules in the future. 

Mr. Shapiro explained that EPA generally tries to 

develop numerical, performance-based standards 

in Agency regulations. In certain cases, however, 

such as storm water management, it has been 

diffi cult to develop meaningful numerical standards, so the Agency has used Best Management 

Practices (BMPs) instead. Mr. Starfi eld added 

that EPA also faces environmental problems for 

which multiple standards apply. In Region 6, for 

example, hurricanes have created large physical 

challenges in the region. EPA has been asked 

to determine the best way to demolish 30,000 

houses. There are multiple and sometimes confl icting regulations to consider, such as the 1973 

National Emission Standards for Hazard Air Pollutants (NESHAP) Standard for asbestos removal 

as well as water runoff and land remediation issues 

and standards. Beyond regulatory requirements, 

there are numerable unintended consequences 

that have to be considered. Once the houses are 

demolished, there are debris issues. Should these 

materials go to a landfi ll or be incinerated? Three 

to four years after Hurricane Katrina, EPA is still 

trying to fi gure out how to address a number of 

these issues. There are many technical, political, 

and environmental factors associated with these 

problems. 

Mr. Habicht returned to the ETV Program. He 

suggested that EPA think about what kind of 

verifi cation statement can be made once a technology is evaluated. Does the technology do what 

the company says it does? Beyond describing the 

verifi cation results, well developed metrics need 

to be established so the evaluated technology can 

be compared to the state-of-the art so that investors and potential users can assess if it is a better 

investment. Mr. Habicht agreed that unintended 

consequences need to be examined for all types 

of technology from nano-scale applications to 

energy storage. Investors always are interested in 

scaling up technology, but he cautioned investors 

to be sensitive to unintended consequences like 

those realized with CFC substitutes. Investors do 

not want to solve one problem now but create a 

bigger problem later. 

Mr. Preston said he thought it was useful for 

VCs to hear about the national and regional 

environmental problems raised in the discussions so far and he offered some perspectives on 

how to address them. If industry were in charge 

of the hurricane cleanup, for example, requests 

would be made to create disaster recovery landfi lls 

with relaxed regulatory requirements to allow 

more expeditious disposal of the waste material. Restrictions likewise could be waived for 

materials separation to allow more rapid recovery 

and disposal of waste material. EPA could take 

a leadership role in disaster recovery because the 

Agency knows the environmental requirements 

and how they may be temporally modifi ed to 

address pressing environmental problems. 

Mr. Starfi eld replied that states normally implement most environmental standards so to take 

the role suggested by Mr. Preston, EPA would 

have to preempt state laws. Following Katrina, it 

was decided that the states and not the Federal 

Government would lead the clean-up efforts in 

response to the disaster. 

Mr. Brenner asked if anyone present would like to 

make a public comment. Walter Howes, Verdigris 

Capital, suggested that EPA collaborate with DOE 

on setting up the Department’s Loan Guarantee 

Program in a way that it can be operated by a 

third party like the Export-Import (Ex-Im) Bank 

or Overseas Private Investment Corporation 

(OPIC). By joining forces, EPA could complement 

Public Comments

DOE with various skill sets and assist the Department in establishing the loan guarantee process so 

an Ex-Im Bank or OPIC entity could operate it. 

Mr. Brenner asked if DOE had any reaction to 

Mr. Howes’ suggestion. Mr. Bond replied that 

several U.S. Senators and the Center for American 

Progress have made similar recommendations. 
Report of the EPA–Venture Capital Community Summit: Exploring Programs to Commercialize Environmental Technology 27

EPA and Venture Capital Roles and Next Steps

He thought it would be helpful if the DOE Loan 

Guarantee Program were operated under a structure like the Ex-Im Bank. Currently, DOE has a 

need to quickly review applications from a technology evaluation standpoint and provide an objective 

response. DOE would welcome EPA participation 

in the review process. Beyond proposal reviews, 

DOE also is very interested in technology verifi cation programs. The NREL program to evaluate 

technologies is not sophisticated and needs strengthening. Mr. Bond suggested that DOE probably 

could learn a great deal from EPA’s ETV Program. 

Dr. Richard Sustich of the University of Illinois 

Center of Advanced Materials for the Purifi cation 

of Water with Systems (the WaterCAMPWS) 

explained WaterCAMPWS is a National Science 

Foundation Science and Technology Center. 

Dr. Sustich offered comments about the “valley of 

death” at the proof of concept stage of technology development. Although this is a higher risk 

stage of development, it also is an opportunity for 

venture investment. Regarding large environmental challenges, he suggested that it may be useful 

to ask researchers to review these challenges and 

prepare a survey of the proof of concepts that 

may be used to address these challenges. This 

could be useful for Agency managers in identifying 

where things might lead in technology development. An example of this approach is captured in 

a new book entitled “Nanotechnology Applications 

for Clean Water,” which was published by William 

Andrew Publishing. 

Mr. Heimerman introduced Norm Birchfi eld, who 

serves as EPA’s Senior Environmental Technology 

Offi cial (SETO), adding that Norm can direct 

investors wishing to discuss technology development issues to the appropriate individual within 

the Agency. 

Ron McIlwain, Filtersure, described his company’s 

unsuccessful efforts to secure an EPA SBIR grant. 

Although the company could not secure EPA support, the fi rm was able to build a plant in Canada 

that is effectively treating hog waste. 

Raymond Ricci, NanoRemediation Technologies, 

said he operates a small nanotechnology company 

that deals with water cleanup and other remediation issues. Although a lot of resources have 

been offered to large companies, most technology 

development research is conducted by university 

scientists and engineers who do not have access to 

these resources. He stressed that small business 

ideas often do not receive much attention at the 

DOE National Laboratories or other large government organizations. He asked that government 

policy makers keep the small business operator 

and university researchers in mind as new funding 

programs are developed. He noted that one of 

the biggest challenges facing small business operators is getting through the regulatory requirements 

that limit new technology applications. 

Mr. Brenner thanked everyone for their comments. 

Mr. Shapiro identifi ed four items that were suggested during the morning session:

✧ Use the EPA Strategic Plan to identify grand 

challenges and develop lists of specifi c priority problems at the national and regional 

levels within those challenges. EPA could 

sponsor conferences with investors and others 

to discuss technology solutions to these challenges and problems (Rob Brenner).

✧ Maintain scalability in communications about 

these challenges and problems; communication mechanisms should include conferences, 

Web sites, list serves, and other tools of the 

trade to share and exchange information 

about these issues (Eric McAfee).

✧ Use the NVCA as a conduit for communicating with the VC community (Emily 

Baker).
28 Report of the EPA–Venture Capital Community Summit: Exploring Programs to Commercialize Environmental Technology

✧ Use grants and cooperative agreements to 

address pre-regulatory problems such as 

CAFOs and create mechanisms for developing performance standards without alienating 

the regulated industry (Hank Habicht).

Mr. Preston added that the grand challenges 

should go beyond well-known problems such 

methane emissions from landfi lls or sulfur and 

nitrogen emissions from power plants and focus 

on problems “one level down” that are not being 

addressed. Missing from the above list is the 

notion that EPA can play a signifi cant role in 

advising the Federal Government in saving energy 

in the built environment. If EPA took on such 

as role, developers and investors could identify 

options for new building lighting systems with 

a 3-year or less playback period. Beyond lighting, options also could be suggested for heating, 

ventilating, and air conditioning (HVAC) controls; 

insulation; and other building construction and 

maintenance issues. 

Another idea proposed by Mr. Preston concerned 

the establishment of performance-based standards. 

Venture capitalists may be able to offer some 

suggestions to EPA about how “rolling reductions” 

could be established within regulatory requirements. 

Barry Breen agreed that identifying grand challenges would be useful for the Agency and the VC 

community. He suggested that these challenges 

focus on issues for which new technology is in the 

critical path toward fi nding a solution. The audience for these challenges also should be broader 

than the capital markets and should include the 

Agency and others in the Federal Government. 

Mr. Brenner agreed with these suggestions and 

explained that the challenges should be useful to 

the public, EPA personnel, and anyone else interested in environmental protection. 

Kevin Teichman suggested that the grand challenges include international as well as domestic issues. 

In drinking water, for example, NRMRL worked 

with the Grainger Challenge Prize to fi nd pointof-use water treatment for arsenic-contaminated 

drinking water in Bangladesh. EPA also worked 

on cook stove designs to promote health, the 

environment, and economic prosperity in many 

developing countries. Mr. Habicht added that EPA 

may need more resources to support international 

environmental problems. 

Mr. Starfi eld noted that the General Services 

Administration (GSA) is the Federal Government 

landlord and it would be in the interest of both 

EPA and DOE to work with GSA on improving 

energy issues within federal buildings. EPA and 

DOE could assist GSA and DOD in improving 

the energy effi ciency of every federal facility. 

Mr. Preston suggested that EPA may be able to 

embarrass or shame other federal agencies into 

doing the right thing with respect to improving 

energy effi ciency in federal buildings. EPA could 

sponsor a “shoot-off” for the best lighting, the best 

HVAC, and the best building insulation materials. 

Although recognition would be the only award 

from such competitions, EPA could use the results 

to retrofi t its own buildings. EPA would quantify 

the energy savings from these retrofi ts and these 

data could be used to convince other federal agencies about the value of these retrofi t technologies. 

Investors may be willing to fund these retrofi ts if 

they could receive the savings gained because the 

paybacks are generally less than 3 years and have a 

20 percent or greater internal rate of return. 

Mr. Brenner acknowledged that EPA may have an 

opportunity in federal building retrofi ts because the 

Agency has a federal leadership responsibility in 

the National Green Building Program. Mr. Preston 

noted that competitions and prizes develop a 

lot of self-sustaining interest. He pointed out 

the MIT $100K Entrepreneurship Competition 

is the biggest event on campus. It has attracted 

enormous media attention and now is bigger than 

homecoming and graduation. If EPA sponsored 

American innovation competitions, it would attract 

enormous attention. This is all positive because 

the focus is to reduce energy consumption and 

make the environment cleaner. EPA could be on 

the “side of the angels” with such competitions. 

Mr. Bond added that DOE would be interested 

in co-sponsoring prize competitions with EPA on 

energy-related issues. Although DOE has several 

competitions underway already, the Department 

would like to take a more strategic approach with 

respect to prize competitions and DOE would 

welcome EPA input on this issue. 
Report of the EPA–Venture Capital Community Summit: Exploring Programs to Commercialize Environmental Technology 29

Dr. Kovalick stressed that EPA is not a monolith 

and each EPA region probably has a different set 

of priority environmental problems. In Region 

5 (Chicago), for example, EPA is very concerned 

about Great Lakes issues, while EPA Region 

8 (Denver) probably is more concerned about 

the issues associated with biofuels. The top 20 

environmental issues thus may differ dramatically 

depending on the region in which they are identifi ed. 

Mr. Heimerman suggested that one universal grand 

challenge may be the aging national and regional 

water infrastructure. Mr. Shapiro agreed, stating 

that in the next 30 years the United States probably will be replacing most water and wastewater 

pipes throughout most cities and counties. The 

Agency should be considering ideas such as 

whether “smart pipes” could be installed to address 

the aging infrastructure problem. Could such 

smart pipes help address impending environmental problems more quickly? Could smart pipes 

extend the life of water infrastructure? A huge 

investment opportunity exists with respect to 

replacing deteriorating structural problems and 

detecting impending problems more quickly. 

Mr. Habicht noted that millions of dollars are 

spent annually to treat drinking water in the 

United States, but less than 1 percent of the 

nationally treated drinking water is actually consumed; likewise, there is a substantial difference 

between “peak” and “off-peak” electricity generation needs and capacity across the country. There 

are business opportunities within these areas and 

investors as well as the government may be well 

served in thinking cooperatively about them. 

Beyond counterpart federal agencies, EPA also can 

be a resource for states. Each state offers signifi -

cant economic incentives to locate manufacturing 

facilities and plants within their jurisdictions 

and EPA could assist states on technology issues 

regarding their economic development plans. 

Ms. Baker agreed that states are encouraging a lot 

of economic development. She offered to alert 

the NVCA regional chapters about EPA-sponsored 

regional meetings. NVCA regional chapters have 

established good relationships with local economic 

development agencies and they stand ready to 

work with EPA and others in addressing local 

environmental issues. The NVCA has a successful 

track record of working with universities and DOE 

National Laboratories on technology development issues. The NVCA also has sponsored clean 

technology “road trips” to National Laboratories. 

In July 2008, for example, more than 35 venture 

capitalists visited government laboratories in 

Colorado. She asked if EPA would be interested 

in such road trips. 

Mr. Brenner replied that the EPA National Vehicle 

and Fuel Emissions Laboratory in Ann Arbor, 

Michigan, might be interested in hosting a visit 

by venture capitalists. EPA’s clean automotive 

technology research is focused on hydraulic hybrid 

drive train vehicles and clean engines. Ms. Gutierrez added that NRMRL also has been trying to 

attract the interest of companies, not just venture 

capitalists, in water technology development issues. 

She explained that in September 2007, NRMRL 

sponsored a Clean Water Partnership Summit 

that was highly successful and attracted numerous 

small companies and some venture capitalists. In 

May 2008, EPA sponsored the Science Forum that 

included a technology showcase of advances in air, 

water, and soil monitoring technologies and other 

new emerging technologies. 

Ms. Ripley asked how EPA prioritizes its research 

projects. Ms. Gutierrez replied that the prioritize 

process starts with the goals of the EPA Strategic 

Plan, which are translated into specifi c research 

program plans and objectives. In water infrastructure, for example, NRMRL is conducting a 

gap analysis to identify potential state-of-the-art 

technology solutions to this problem. NRMRL 

also is investigating the environmental implications of the wide-spread production and use of 

biofuels. Ms. Ripley asked if NRMRL looks at the 

size of the end market in determining its priorities. 

Ms. Gutierrez replied that the laboratory does not 

look at the market size. Dr. Teichman pointed 

out that EPA’s mission is to protect human health 

and provide environmental protection and this 

responsibility, rather than market size, drives the 

Agency’s research priorities. He explained that 

EPA also conducts a lot of risk assessment research 

on technology issues. Regarding the communication of successful technologies and trends, EPA 

conducts an annual National Sustainability Design 

Expo on the National Mall. This Design Expo 

is based on the P3 Program, mentioned earlier, 

and showcases innovative designs across a range 
30 Report of the EPA–Venture Capital Community Summit: Exploring Programs to Commercialize Environmental Technology

of issues including alternative energy technologies, water purifi cation, and new technologies for 

green buildings. The three “Ps” represent the three 

“legs” of sustainability—People, Prosperity, and the 

Planet. Dr. Teichman noted that P3 not only has 

resulted in several very innovative designs for new 

technologies but also is training the next generation of environmental scientists and engineers. 

If the U.S. economy is moving toward a recession 

or depression, Mr. Preston predicted that higher 

unemployment will occur and suggested that EPA 

may be in a unique position to offer suggestions 

for job creation opportunities in rebuilding the 

national water infrastructure. If large national 

environmental problems can be identifi ed then 

the VC community may be able to offer suggestions for technology solutions. Recently, for 

example, a fi ber-reinforced composite technology 

was announced that is capable of building bridges 

in 2 days rather than the conventional approach 

that takes weeks or months. It was demonstrated 

that the military could drive tanks over these 

new bridges in 1 week. Such a technology may 

have application in repairing the U.S. water infrastructure system. Sometimes, the VC community 

sees technologies that may have with diverse 

applications that may not be known to the Federal 

Government. 

Mr. Bond asked if there are any opportunities 

to fast track siting and permitting for these new 

commercial scale energy technologies. Section 

932 of the Energy Policy Act of 2005 requires 

DOE to demonstrate the commercial application 

of cellulosic feedstock biorefi neries. There will be 

signifi cant NEPA implications regarding the siting of these biorefi neries. Are there ways to fast 

track the Environmental Impact Statement (EIS) 

requirements for these facilities? 

Dr. Kovalick noted that EPA’s behavior regarding 

permitting has been a perennial fl ower. In 1995, 

environmental permitting was raised as a signifi -

cant issue in the White House Conference on 

Environmental Technologies and it has bloomed 

regularly since then. NEPA is a federal not a 

state responsibility so EPA can deal with it, but 

the problem may be a matter of prioritizing this 

function. Normally, there are a limited number 

of EPA personnel designated for the NEPA review 

process. State permitting, however, is a signifi cant 

problem because of reciprocity. Sister states 

normally do not recognize each other’s permits. 

Although cross-state permitting is diffi cult, 

Mr. Brenner acknowledged that EPA has helped 

states in the past permit “fi rst time” technology 

demonstration projects. As more states seek to 

host new energy effi ciency and renewable energy 

technology sites, the potential for EPA to assist 

an individual state in the permitting process may 

become more apparent. 

Ms. Gutierrez noted that some states already 

have added the requirement to use only “verifi ed” 

technologies (by EPA or others) in their project 

development plans. So the value of the ETV 

verifi cations has been recognized. In the past, 

the involvement of EPA researchers in technology 

demonstration projects also raised the “comfort 

level” of some state offi cials and garnered their 

acceptance to host a project within their jurisdiction. 

Mr. Habicht commented that there are some 

major new thrusts in technology as a result 

of environmental regulation. Some of these 

thrusts include CO2

 sequestration, nanomaterials, 

advanced biofuels, vehicle-to-grid technologies, 

large solar arrays, large wind arrays, and others. 

EPA needs to position itself to be involved in the 

design and evolution of these technologies. EPA 

involvement is important to assess unintended 

consequences as well as to be an integral part of 

the infrastructures that are built up around these 

technologies. Biofuels is an example of a new 

energy technology that may have some unintended 

consequences. EPA and NREL collaboration on 

the impacts of these technologies is a model that 

should be expanded in the future. Disruptive 

technologies will have infrastructure impacts and 

the earlier EPA and DOE can collaborate on their 

assessments the better. 

Mr. Habicht reiterated that EPA needs to communicate its biggest environmental challenges. Once 

these challenges are identifi ed, there needs to be 

a “give and take” about them with the business 

community and others. Through this process, 

the challenges can be sharpened into a potential 

technology and investment opportunity. 
Report of the EPA–Venture Capital Community Summit: Exploring Programs to Commercialize Environmental Technology 31

Mr. Leighton explained that some “building blocks” 

already are in place for communication on these 

issues. From 1995 to 2000, when John DeVillars 

was EPA Administrator in Region 1 (Boston), VC 

forums were being conducted in New England. 

These forums focused on the identifi cation of 

innovative technologies that may offer solutions to 

priority regional problems. Maggie Theroux, who 

is now with EPA’s ETV Program, was a key player 

in conducting these technology forums. From 

these forums, Region 1 learned about the need 

to frame problems with as much specifi city as 

possible to facilitate the development of effective 

solutions. This effort helped establish the current 

dialogue between EPA regions and the EPA’s ORD 

on defi ning priority problems. Last year, a science 

symposium, attended by the EPA Deputy Regional 

Administrators and the senior ORD program 

managers, was conducted to exchange ideas on 

problems and potential solutions. A common 

format was used to defi ne regional problems that 

included a lot of specifi city. Based on this symposium, data are now available to allow problems to 

be defi ned on a regional, media, or national basis. 

Dr. Teichman added that, for the symposium, each 

EPA region was asked to identify its three high 

priority problems and 40 problems were identifi ed. 

Obviously, more problems were identifi ed than 

expected and not all of these problems involve 

technology in their critical path. Nonetheless, 

this exercise may be one source for identifying 

problems with potential technology solutions. 

What would you do with the research results if 

you received them was a frequent question raised 

during the symposium. 

Mr. Preston suggested that it might be useful to 

translate these problems into a cost value; if this 

problem were solved how much would that be 

worth. The VC community could really focus on 

a problem if there is some estimate about its value 

proposition. 

Dr. Teichman cautioned that value propositions 

may be easier to estimate in the health area than 

in ecosystems. ORD currently is working on 

how to value ecosystem services but agreed upon 

metrics have not yet been established. Mr. Preston 

acknowledged that a value cannot be put on 

human life and made a business proposition, but a 

value can be placed on the loss of tourism because 

of polluted waters. 

Mr. Starfi eld agreed that it would be useful for 

EPA and VCs to discuss regional environmental 

problems because of the unique differences among 

regions that were mentioned earlier. Water has a 

tremendous value in the South and Southwestern 

United States but is not as critical an issue in 

other parts of the country. He suggested that 

“smart meters” to gauge electricity usage within 

individual homes is a great idea but it is not being 

widely used in EPA Region 6 (Dallas). Likewise, 

water meters to gauge water usage would be 

equally valuable. 

Mr. Brenner agreed that there are regional as well 

as national issues facing the Agency. He suggested 

that future meetings could focus on regional 

issues, national issues, or potentially only two or 

three issues; there are a variety of ways to address 

these problem sets. Are there preferences for any 

single approach?

Ms. Ripley replied that meetings are helpful but 

more use should be made of Web communications. The NVCA also may be a good way to 

communicate with the VC community. She 

admitted that today’s meeting has given her a 

renewed appreciation for the challenges EPA faces; 

nonetheless, she would like the Agency be more 

of a catalyst for adoption of innovative technologies. EPA is uniquely positioned to do so. Does 

the identifi cation of grand challenges depend on 

the new EPA Administrator? What does it take 

for EPA to be a catalyst for adoption of innovative 

technologies? 

Mr. Brenner responded that more federal agency 

collaboration (e.g., EPA collaborating with DOE, 

USDA, and others) is inevitable. The degree to 

which this collaboration occurs may hinge on 

the new Administrator’s priorities but the value 

in more collaboration is recognized. Mr. Brenner 

expects EPA to be much more involved in a 

technology-driven environmental process than it 

has been in the recent past. 

Mr. Habicht agreed that personalities always make 

a big difference. He mentioned that the President’s Council on Environmental Quality also will 

be important. 
32 Report of the EPA–Venture Capital Community Summit: Exploring Programs to Commercialize Environmental Technology

Dan Watts said that he would be presenting the 

results of today’s Summit at the NACEPT meeting 

tomorrow because today’s meeting was conducted 

as a follow-up to the NACEPT Report on venture capital. He asked if there are there some 

actions from the Summit that can be reported to 

NACEPT. Is there more work for NACEPT to do 

on this topic?

Mr. Brenner thanked NACEPT for its work to 

date. He thought the general response to the 

NACEPT Report was that it was well done and 

will be valuable to the Agency. He admitted that 

there are many in the Agency who will want to 

review the Report further before specifi c next 

steps can be determined. Given the range of the 

Report’s fi ndings and recommendations, EPA may 

want to create another NACEPT Subcommittee to 

further advise the Agency, but it would be premature to make such a decision at this time. 

Dr. Kovalick proposed that, in the interim, the 

Agency could move forward by scheduling regional meetings with the VC community and others 

to discuss challenges and problems of concern to 

the regions. Mr. Brenner agreed and suggested 

this may be good point at which to conclude the 

meeting. He thanked everyone for their participation in what he thought was a very valuable 

meeting to EPA. He expects to see the results of 

today’s Summit refl ected in the Agency’s efforts 

over the next several years and looks forward to 

working with the VC community on these issues 

in the future. 

Mr. Habicht explained that perhaps the best way 

to summarize today’s meeting is that “we have 

found each other and it is beautiful.” This Summit has assembled some of the most talented 

and hard working people around and very useful 

discussions have resulted. Based on his experience 

at EPA, he understands that the Agency staff often 

feels isolated because of institutional constraints. 

He hoped that today’s meeting will be the initial 

step toward offering offi cials a channel to communicate about issues of common interest with other 

problem solvers. 

Mr. Preston suggested that there is an opportunity 

at EPA for bold leadership in the Federal Government on technology issues. He believes there is a 

lot of interest within the Agency for bold leadership and such leadership makes it unlikely that 

such an initiative will fail. 

Mr. Brenner agreed that there are numerous 

examples of where EPA has taken a leadership 

role in the past on technology issues. He offered 

the Diesel Retrofi t Program as a recent example 

where EPA worked to fi nd and develop a technology solution early on and the result is that nearly 

$1 billion worth of diesel retrofi ts are being made 

annually. This is just one example; there are 

many others in the water and solid waste media 

where similar advances have been made through 

technology-driven approaches. EPA gets it. Now, 

there is an opportunity for the Agency to push 

hard on these approaches and EPA plans to take 

advantage of it. 

Mr. Leighton explained that even in the “Big Dig” 

in Boston, the Agency was able to drive diesel 

retrofi t use in the excavation and construction 

process. This opportunity was created because 

government offi cials used the “bully pulpit” to 

push for it and the “court of public opinion” 

asked “why not?” He expressed hope that NEPA 

can be a very important driver for public policy 

and opinion for regional and national energy and 

environmental problems. 

Mr. Habicht agreed, explaining there are and will 

be unique opportunities for collaboration between 

EPA and DOE on energy and environmental 

issues. Hearing no more comments, Mr. Habicht 

and Mr. Brenner adjourned the meeting. 
Appendices

A. EPA-Venture Capital Community Summit: Potential EPA 

Follow-Up Activities

B. List of Summit Attendees

C. Summit Presentations

1. Venture Capital Overview 

2. U.S. EPA: The Context for Promoting New Environmental 

Technology 

3. Department of Energy Technology Commercialization: Energy 

Effi ciency and Renewable Energy

D. Stages of Investment 

E. Federal Register Notice for EPA-Venture Capital Community 

Summit

Report of the EPA–Venture Capital Community Summit: Exploring Programs to Commercialize Environmental Technology 35

The following is a list of potential follow-up activities developed by EPA subsequent to the Summit to 

help further environmental technology investment and commercialization. Some of the activities have 

been initiated.

I. Collaborating With Other Agencies

A. Develop partnerships with DOE, USDA, and other agencies to learn from their technology commercialization efforts

B. Seek to use Stimulus and venture capital funds to support environmental technology development 

and deployment

C. Explore cooperating with other federal agencies to encourage wide-scale government purchasing of innovative environmental technologies (e.g., energy effi cient and greenhouse gas reduction 

technologies)

D. Develop a strategy for collaborating with state, tribal, and city economic development organizations to create green jobs

II. Fostering Interaction With the Venture Capital Community

A. Communicate EPA’s “Grand Challenges” for which technology might provide solutions

B. Organize regional follow-up meetings with the venture capital community

C. Develop with venture capital associations mechanisms to facilitate communication and cooperation

D. Create a framework to inform EPA on how to work with the venture capital community

III. Considering New Programs and Activities

A. Create prize programs for technological solutions to major challenges confronting the Agency

B. Assess the need for grant and loan guarantee programs that would encourage investment in environmental technology commercialization

C. Assess whether the Agency’s Green Building Strategy should be revised to add technology commercialization

D. Discuss the need for a FACA group focusing on venture capital investment in environmental 

technology and/or related themes (e.g., other fi nance and investment actions catalyzing environmental technology development and deployment)

Appendix A: EPA-Venture Capital Community Summit: Potential EPA Follow-Up Activities
36 Report of the EPA–Venture Capital Community Summit: Exploring Programs to Commercialize Environmental Technology

Participants

EPA Senior Career Managers:

Barry Breen

Deputy Assistant Administrator

Offi ce of Solid Waste and Emergency Response

Rob Brenner, Co-Chair

Director

Offi ce of Policy Analysis and Review

Offi ce of Air and Radiation

Walter Kovalick, Jr.

Assistant Regional Administrator for Resources

 Management 

Region 5 (Chicago)

Ira Leighton

Deputy Regional Administrator

Region 1 (Boston)

Mike Shapiro

Deputy Assistant Administrator

Offi ce of Water

Larry Starfi eld

Deputy Regional Administrator

Region 6 (Dallas)

Kevin Teichman

Deputy Assistant Administrator for Science

Offi ce of Research and Development

Pai-Yei Whung

Chief Scientist

Offi ce of the Science Advisor

Senior Venture Capitalists:

Hank Habicht, Co-Chair

Managing Partner

SAIL Venture Partners

Daniel Hullah

Principal

RockPort Capital Partners

Appendix B: List of Summit Attendees

Eric McAfee

Managing Director

Cagan McAfee Capital Partners

John Preston

Managing Director

C Change Investments

Rosemary Ripley

Managing Director

NGEN Partners

Dan Watts

Executive Director

Otto H. York Center for Environmental 

 Engineering and Science

New Jersey Institute of Technology

Presenters:

Emily Baker

Director

Federal Policy and Political Advocacy

National Venture Capital Association

Walter Kovalick, Jr.

Assistant Regional Administrator for Resources

 Management

Region 5 (Chicago)

Drew Bond

Director for Commercialization and Deployment

Offi ce of Energy Effi ciency and Renewable Energy

U.S. Department of Energy

Audience

EPA Attendees:

Amanda Aldridge

Offi ce of Air Quality Planning and Standards

Offi ce of Air and Radiation

Sonia Altieri

Offi ce of Cooperative Environmental Management
Report of the EPA–Venture Capital Community Summit: Exploring Programs to Commercialize Environmental Technology 37

Appendix B: List of Summit Attendees (continued)

Diana Bauer

National Center for Environmental Research

Offi ce of Research and Development

Sarah Bauer

Offi ce of Science Policy

Offi ce of Research and Development

Michael Bender

Offi ce of Resources Management 

 and Administration

Offi ce of Research and Development

Norman Birchfi eld

Offi ce of the Science Advisor

Michael Brody

Offi ce of the Chief Financial Offi cer

Rafael DeLeon

Offi ce of Cooperative Environmental Management

Jordan Dorfman

Offi ce of Water

Peter Fargo

Offi ce of Research and Development

Sally Gutierrez

National Risk Management Research Laboratory

Offi ce of Research and Development

Jeff Heimerman

Offi ce of Solid Waste and Emergency Response

Mark Joyce

Offi ce of Cooperative Environmental Management

Michael Kane

Offi ce of Policy, Economics and Innovation

Mitch Lasat

National Center for Environmental Research

Offi ce of Research and Development

Cynthia Nolt-Helms

National Center for Environmental Research

Offi ce of Research and Development

April Richards

National Center for Environmental Research

Offi ce of Research and Development

Neil Stiber

Offi ce of Science Policy

Offi ce of Research and Development

Larry Weinstock

Offi ce Air and Radiation

David Widawsky

National Center for Environmental Innovation

Offi ce of Policy, Economics and Innovation

Mary Wigginton

National Center for Environmental Research

Offi ce of Research and Development

Other Attendees:

Richard Canino

New Energy and Industrial Technology 

 Development Organization

Sarah Carter

American Association for the Advancement of

 Science Fellow

Ray Cheung

World Resources Institute, Inc. 

Edie Findeis 

EMS, Inc.

Prasad Guple

National Institute of Standards and Technology

U.S. Department of Commerce

Walter Howes

Verdigris Capital

Glen Kedzie

American Trucking Association

Valarie Latraverse

Canadian Embassy
38 Report of the EPA–Venture Capital Community Summit: Exploring Programs to Commercialize Environmental Technology

Appendix B: List of Summit Attendees (continued)

Mary Mai

Center for Environmental Innovation

Ron McIlwain

Filtersure, Inc. 

Jim McVaney

Rentech, Inc. 

David Nguyen

American Trucking Association

Andrew Paterson

Econergy

Raymond Ricci

NanoRemediation Technologies

Brian Routhier

American Trucking Association

Edward Saltzberg

USA Energy Advisors

Paul Schaudies

GenArraytion, Inc.

Sumita Singh

National Venture Capital Association

David South

T&M Solutions

Richard Sustich 

Center of Advanced Materials for Purifi cation of

 Water with Systems (WaterCAMPWS)

University of Illinois at Urbana-Champaign

EPA Project Offi cer and Contact:

Paul Shapiro

National Center for Environmental Research

Offi ce of Research and Development

E-mail: shapiro.paul@epa.gov

Contractor Support:

Beverly Campbell

Angela Hays

Greg Ondich

The Scientifi c Consulting Group, Inc.

James Rea

SiteStories
Report of the EPA–Venture Capital Community Summit: Exploring Programs to Commercialize Environmental Technology 39

EPA-Venture Capital Community Summit: 

Exploring Programs to Commercialize 

Environmental Technology

November 12, 2008

Venture Capital Overview

Emily Baker, NVCA

About NVCA

 Formed 35 years ago to foster better 

communications among venture capital 

professionals

 Today focuses on advancing public policies

2

y g p

conducive to entrepreneurship, innovation 

and capital formation

 Also has research, education, networking 

charter

 Based in Washington DC

 470 member firms

What is Venture Capital?

 Venture capital is invested alongside management in private start-up 

companies operating in innovative industries.

 Information Technology

 Life Sciences

Cl T h l

3

 Clean Technology

 Venture capital funds are capitalized by institutional investors and the 

VCs themselves. 

 Pension funds

 Endowments

 Foundations

 The goal of a venture investment is to build a company to the point 

that it can stand on its own as a public entity or be acquired as part of 

a larger organization.

Venture Capital Characteristics

 Venture capital is long term investment.

 Venture investments typically last 5-10 years, often longer, rarely less.

 Venture capital is focused on innovation.

 VCs invest in companies that look to transform the status quo in high 

h l

4

technology spaces.

 Venture capital is high risk and high reward.

 Forty percent of venture backed companies fail; forty percent break 

even/make minimal gains; only 20 percent make significant gains.

 Venture capital builds value in companies and the economy.

 Venture capital investment stays in the company and is used for growth.

 Venture capitalists bring operational and scientific knowledge to bear to 

catalyze growth, involving themselves in day-to-day operations.

Venture Capital = Economic 

Growth

 Venture investments accounted for just .02% of invested capital. 

 Despite the small venture industry size, companies that got their start 

with venture capital accounted for 10.4 million jobs and $2.3 trillion of 

revenues in the US in 2006 or 18 % of GDP.

f

5

 Companies that were originally unded by venture capital include 

Genentech, Microsoft, Apple, Google, FedEx and Starbucks.

 Venture-backed companies outperform non-venture counterparts.

 Current venture backed companies account for over 400,000 US jobs 

across the country.

 Innovations funded by venture capital include the pacemaker, Herceptin 

(cancer), Integrilin (heart disease). VCs are also increasingly focused on 

clean technology – solar, wind, carbon capture, energy efficiency.

Venture Capital Investment 

is Productive ...

 For VC every dollar invested in 1970-2001, there was 

$7.90 in US revenue during 2006

6

 For every $28,463 of venture capital invested in 1970-

2001, there was one job in the year 2006

 Note these ratios are based on investment through 2001 ($296B) 

because investment after that time has likely had little effect on 2006 

jobs and revenues. If investment through 2006 ($421B) is used, the 

ratios would be $5.55 and $40,364 respectively

Source: Venture Impact 2006 by Global Insight

Appendix C: Summit Presentations

1. Venture Capital Overview
40 Report of the EPA–Venture Capital Community Summit: Exploring Programs to Commercialize Environmental Technology

Appendix C: Summit Presentations (continued)

Top 10 States for Venture 

Capital Investment 2007

 California $14.19

 Massachusetts 3.59

Texas 1 42

State Billions Invested

7

 Texas 1.42

 Washington 1.34

 New York 1.17

 Pennsylvania .85

 Maryland .63

 New Jersey .60

 North Carolina .59

 Florida .58

Top States for VC-Backed US Revenues 2006

Rank State

National 

Employment 

at VC-Backed 

Companies

2003-

2006

Growth

1 California 566,600 12.6%

2 T 293 700 10 2%

8

exas 293,700 10.2%

3 Washington 144,200 12.8%

4 Massachusetts 131,300 12.8%

5 Pennsylvania 121,600 9.6%

6 Georgia 120,000 11.0%

7 Virginia 104,900 14.7%

8 New York 98,000 10.6%

9 Tennessee 92,100 15.7%

10 Minnesota 82,600 16.2%

Top States for VC-Backed US Jobs 2006

Rank State

National 

Employment at 

VC-Backed

Companies

2003-2006 

Growth

1 California 2,362,400 2.8%

2 Texas 1 118 600 5 6%

9

1,118,600 5.6%

3 Pennsylvania 697,400 2.2%

4 Massachusetts 674,300 3.0%

5 Georgia 604,500 4.8%

6 Tennessee 564,500 2.6%

7 Washington 463,800 7.1%

8 New York 427,700 2.4%

9 Virginia 385,300 3.7%

10 Minnesota 352,700 9.5%

Venture-Backed Revenues

$1 5

$1.7

$2.3

2

2.5

VC-Backed US Revenues (trillions) As a % of total US GDP in 2006

VC-Backed 

Revenue = 18% 

10

$1.5

0

0.5

1

1.5

2000 2003 2006

11.8%

6.5%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

VC-Backed Growth Total Growth

Outpaces 2003 - 2006 

Total US Sales Growth

Source: Venture Impact 2006 by Global Insight

Venture-Backed Employment

9.4

10.4

9 5

10

10.5

VC-Backed US Jobs (millions) As a % of total US Pvt Jobs in 2006

VC-Backed 

Jobs = 9% 

11

8.7

7.5

8

8.5

9

9.5

2000 2003 2005

3.6%

1.7%

0.0%

1.0%

2.0%

3.0%

4.0%

VC-Backed Growth Pvt Sector Growth

Outpaces 2003 - 2006 

Total US Job Growth

Source: Venture Impact 2006 by Global Insight

Internet-Specific & Clean Tech Investments

2005 – Q1 2008

$980

$1,177 $1,063

$1,293

$980

$1,177

$1,405 $1,310

$997 $855 $733 $851 $751

0

50

100

150

200

250

Internet-Specific Investments ($M)

12

$472 $514

$237

$413 $471

$851

$666 $625

$139 $152 $121 $103

$281

Q1'05 Q2'05 Q3'05 Q4'05 Q1'06 Q2 '06 Q3 '06 Q4 '06 Q1'07 Q2'07 Q3'07 Q4'07 Q1'08

0

10

20

30

40

50

60

70

$ Invested # of deals

PricewaterhouseCoopers/National Venture Capital Association MoneyTreeTM Report

Based on data from Thomson Reuters

Clean Tech Investments ($M)

Q1'05 Q2'05 Q3'05 Q4'05 Q1'06 Q2 '06 Q3 '06 Q4 '06 Q1'07 Q2'07 Q3'07 Q4'07 Q1'08

0

$ Invested # of deals

1. Venture Capital Overview (continued)
Report of the EPA–Venture Capital Community Summit: Exploring Programs to Commercialize Environmental Technology 41

Appendix C: Summit Presentations (continued)

1. Venture Capital Overview (continued)

$1,194

$1,270

$1,533

$1,275

$1,395

$1,267 $1,264

Q1 2007

Q4 2007

Q1 2008

Investment Activity – Top Industries

Q1 2007, Q4 2007, Q1 2008

Total Amount Invested ($M)

13

$458

$381

$577

$854

$1,008

$566

$639

$1,019

Biotechnology Softw are Medical Devices and Equipment Industrial/Energy Semiconductors

PricewaterhouseCoopers/National Venture Capital Association MoneyTreeTM Report

Based on data from Thomson Reuters

Federal Policy Initiatives 

Needed to Drive Clean Tech

 Renewable Portfolio Standard

 Renewable Fuel Standard

14

 Investment Tax Credits

 Strengthened CAFE standards

 More robust federal R&D for energy

 Federal government as early adopter and user of clean energy 

technologies

New Partnerships

NVCA is looking forward to working more 

closely with EPA

15

Emily Baker, ebaker@nvca.org

Sumita Singh, ssingh@nvca.org
42 Report of the EPA–Venture Capital Community Summit: Exploring Programs to Commercialize Environmental Technology

Appendix C: Summit Presentations (continued)

U.S. EPA: The Context for Promoting 

New Environmental Technology

Presented at the 

EPA-Venture Capital Community Summit: Venture Capital Community Summit: 

Exploring Programs to Commercialize

Walter W. Kovalick, Jr. Ph.D.

Assistant Regional Administrator

U.S. EPAU.S. EPA—Region 5Region 5

Kovalick.walter@epa.gov

Exploring Programs to Commercialize

Environmental Technology 

November 12, 2008

Outline

 Mission and budget

 Operations and implementation

 Technology nexus

Mission and Mandates  One of 20+ independent regulatory agencies

• Not a Cabinet department, but Cabinet status Not a Cabinet department, but Cabinet status

 Protect public health and the environment

 Multiple statutes provide mandates

• Clean Air Act Clean Air Act

• Clean Water Act Clean Water Act

• Safe Drinking Water Act Safe Drinking Water Act

• Resource Conservation and Recovery Act (as amended) Resource Conservation and Recovery Act (as amended)

• Comprehensive Environmental Response Compensation Comprehensive Environmental Response Compensation 

and Liability Act (Superfund)

• Federal Insecticide Fungicide and Rodenticide Act (FIFRA)

• Toxic Substances Control Act (TSCA)

• Others

FY 2008 Budget by Goal

Total Agency: $7,472 Million Goal 1

13.1%

2,609 FTE

Goal 5

10.5%

Goal 4 3,487 FTE

16.7%

3,736 FTE

Goal 1: Clean Air and Global Climate Change

Goal 2: Clean and Safe Water

Goal 3: Land Preservation and Restoration

Goal 4: Healthy Communities and Ecosystems

Goal 5: Compliance and Environmental Stewardship

Goal 3

23.6%

4,574 FTE

Goal 2

36.1%

2,901 FTE

Strategic plan—www.epa.gov/ocfo/plan/2006/entire_report.pdf

EPA 2008 Budget Allocation 

(Millions)(Millions)

$1,222 $1,715

$1,360

$3,175

State and Tribal Assistance Grants

Subtotal, Operations (non Trust fund)

Subtotal, Operations from Trust Funds

Infrastructure / STAG Project Financing

2. U.S. EPA: The Context for Promoting New Environmental Technology
Report of the EPA–Venture Capital Community Summit: Exploring Programs to Commercialize Environmental Technology 43

Appendix C: Summit Presentations (continued)

What is the Regulated 

Community?  Any business/organization that is required to 

comply with EPA statutory or regulatory 

requirements.

 Includes:Includes:

 More than 800 000 permitted facilities under More than 800,000 permitted permitted facilities facilities under

CAA, CWA and RCRA

 Over 20 million small businesses

 80,000 units of local government

 Millions of regulated facilitates under more 

than 12 major environmental statutes

Operations and Implementation

 Agency exercises discretiondiscretion in balancing 

mandate given in each statute mandate given in each statute—mainly

in HQ

 Traditional role Traditional role—different types of different types of 

regulation

• Technology based Technology based—most stringent or cost effective; most stringent or cost effective; 

can “freeze” technology, once set

• Health based Health based—set for environ. conditions; room for set for environ. conditions; room for 

source control technologies to meet limits

• Market based Market based—sets limit for nation/area; facilities sets limit for nation/area; facilities 

get tradable allowances

• Use restrictions (for chemicals/pests) Use restrictions (for chemicals/pests)—exposure exposure

restricted by label directions or product restriction 

Ops and Implementation (cont.)

 New Strategies (beyond “command and control”)

• Begun in 1990’s Begun in 1990’s—HQ together with Regions HQ together with Regions

 Compliance assistance

 Voluntary partnerships

 Performance track Performance track—beyond compliance beyond compliance

 Partnering for economic gain/development

e.g. Brownfields, CRADAs

Plus 

• International developments/imperatives (ISO 14000/EMS International developments/imperatives (ISO 14000/EMS 

plus EU/China requirements)

N.B. As always, enforcement keeps a level playing field

Ops and Implementation (cont.)

 Almost half of 17,000 FTE in Regional Offices

• Most EPA regulatory programs delegated to Most EPA regulatory programs delegated to 

states and tribes

• Vast majority of inspection, permitting, Vast majority of inspection, permitting, 

enforcement at state/tribal level enforcement enforcement at state/tribal state/tribal level

 ~2400 FTE for science and technology work ~2400 FTE for science and technology work—

mostly ORD

• Of $760M budget, ~$440M extramural Of $760M budget, ~$440M extramural 

N.B. Large % of entire EPA workforce are scientists/

engineersengineers

EPA Roles in Environmental 

Technology Marketplace

 Funding agent

 Technology developer

 Reg / ulator/enforcer

 Information broker

• Neutral Neutral

• Verification agent Verification agent

 Partner in deployment

 User of “first resort”

v

2. U.S. EPA: The Context for Promoting New Environmental Technology (continued)
44 Report of the EPA–Venture Capital Community Summit: Exploring Programs to Commercialize Environmental Technology

Appendix C: Summit Presentations (continued)

Intersections: EPA’s Work and 

Environmental Technologies

 For niche areas, in depth understanding by 

researchers/programs, 

• E.g. drinking water treatment, air pollution control, E.g. drinking water treatment, air pollution control, 

remediation, diesel retrofit

• Monitoring and measurement technologies Monitoring and measurement technologies 

 Secondary level of understanding of industrial 

processes to set BACT, etc. levels

 Appreciation of technology aspects of many 

sectors through partnering programs, i.e. Design 

for Environment, energy conservation, etc.

Observations: How Technology 

Intersects with EPA Work

 With few exceptions, EPA mission is not to be a 

“technology development” organization

 New environmental problems are viewed first 

through statutory/regulatory lens (e.g. GHG 

sequestration = UIC program) leading to sequestration sequestration = UIC program) program) leading leading to

technology inquiry

 While expert in some niches, EPA’s mandates 

don’t call for comprehensive monitoring of 

technology developments

 The Environmental Technology Council is a forum 

for joint action across programs/regions for joint action across programs/regions—see 

www.epa.gov/etop

Observations (cont.)

 EPA’s regulatory agenda charts the subjects and 

issues to be addressed over a several year period

 By its nature, technology driven regulations “fix” 

best technology; resources normally limit EPA’s 

ability ability to continuously update ability to continuously continuously update “best”

 EPA is well vested in technology diffusion 

activities, esp. verification

 EPA is experienced in operating SBIR and grant 

programs; no mandates for many other financial 

vehiclesvehicles

2. U.S. EPA: The Context for Promoting New Environmental Technology (continued)
Report of the EPA–Venture Capital Community Summit: Exploring Programs to Commercialize Environmental Technology 45

Appendix C: Summit Presentations (continued)

Technology Commercialization 

Energy Efficiency and Renewable Energy 

U.S. Department of Energy

November 2008

Drew Bond

Director of Commercialization and Deployment

National security, environmental and economic goals form the basis for a robust National 

Energy Policy but historical data demonstrates the magnitude and urgency of the challenge.

Energy Security Environmental Stewardship Economic Competitiveness

1800

2000

2200 US Petroleum Imports

Balance of US Trade Deficit after

Petroleum Imports

Historical Projected

EISA

Impact (2)

264

• Diversify our energy mix and 

reduce dependence on petroleum

• Reduce greenhouse gas emissions 

and other negative environmental 

impacts

• Create a more flexible, more reliable 

and higher capacity U.S. energy 

infrastructure

• Improve the energy productivity of 

the U.S. economy

(MMTC) ($BN)

OPEC Non-OPEC

67% 33%

(Billions of Barrels)

2

0

200

400

600

800

1000

1200

1400

1600

1800

195019601970198019902000201020202030

$335 $326 $381 $418

$490 $535 $536 $488

$395

$120 $104

$104

$133

$180

$252 $302 $331 $449

20002001200220032004200520062007

1Q08A

Proven Oil Reserves (1) US Greenhouse Gas Emissions by Source(3) US Historical Trade Deficit(4)

Other

Electricity

Transportation

Petroleum

(1) Source: BP Statistical Review of World Energy, June 2008. Note: Includes 152 BN barrels of Canadian Tar Sands. Higher USA figure includes 86 BN barrels and 4 BN barrels in the Outer Continental Shelf and Arctic National Wildlife Refuge, respectively according to EIA. Only top producing nations shown. 

(2) Difference between 2007 and 2008 American Energy Outlooks largely attributable to the passage of the Energy Independence and Security Act of 2007 signed by President Bush in December 2007.

(3) Source: American Energy Outlook 2008, Energy Information Agency.

(4) Source: US Department of Labor, Bureau of Economic Analysis, International Transactions Accounts. Note: 2008 annualized from Q1 data.

120

138

115

102 98

87

42 36

180

79

29

16 13 12

Saudi Arabia

IranIraq

Kuwait

UAE

Venezuela

Libya

Nigeria

Canada

Russia

USA

China

Brazil

Mexico

28

The DOE is divided up into three units concentrating on energy 

R&D, basic science research and nuclear security

Secretary Samuel Bodman

Deputy Secretary Jeff Kupfer

Defense Defense Nuclear Advanced High Energy Energy Efficiency Civilian 

Office of Energy Office of Science

3

The U.S. Department of Energy focuses on energy R&D, basic science research and nuclear security

Defense

Programs

Defense Nuclear 

Proliferation

Naval Reactors

Counter-terrorism

Defense 

Programs

Defense Nuclear

Security

Emergency 

Operations

Infrastructure & 

Environment

Management & 

Administration

Scientific 

Computing

Basic Energy 

Sciences

Biological & 

Environmental 

Research

Fusion Energy 

Science

High Energy

Physics

Nuclear Physics

Workforce Dev. 

For Teachers & 

Scientists

& Renewable 

Energy

Environmental 

Management

Fossil Energy

Radioactive 

Waste Mng’t

Electricity 

Delivery & Energy 

Reliability

Legacy 

Management

Nuclear Energy

EERE develops a broad range of clean energy technologies as 

shown in the FY08 budget

$168

$198

$211

$213

Solar

Biomass

Hydrogen

Vehicles

Power Fuels & Vehicles

($ in millions) FY07 National Lab Funding

4

$282

$64

$109

$59

$20

FEMP $20

WIP

Industrial

Buildings

Geothermal

Wind & Water

Efficiency Deployment Renewable P

EERE spreads the federal R&D funding across multiple 

laboratories but works predominately with NREL

$150

$200

$250

Geo

FEMP

OWIP

Industrial

Wind

$80

$100

$120

SRNL

BNL

LLNL

LANL

INL

LBNL

EERE FY07 National Laboratory Funding by Laboratory EERE FY07 National Laboratory Funding by Program

5

$0

$50

$100

NREL

ORNL

ANL

SNL

PNNLLBNL

INL

LANLLLNL

BNL

SRNL

$ in millions

Buildings

Biomass

Hydrogen

Solar

Vehicles

$0

$20

$40

$60

Vehicles

Solar

Hydrogen

Biomass

Buildings

Wind

Industrial

OWIPFEMP

Geo

$ in millions

PNNL

SNL

ANL

ORNL

NREL

Key: ANL, Argonne National Laboratory (IL); BNL, Brookhaven National Laboratory (NY); INL, Idaho National Laboratory (ID); LANL, Los Alamos National Laboratory, (NM); LBNL, Lawrence Berkeley National 

Laboratory (CA); LLNL, Lawrence Livermore National Laboratory (CA); NREL, National Energy Laboratory (CO); ORNL, Oak Ridge National Laboratory (TN); PNNL, Pacific Northwest National Laboratory (WA); SNL, 

Sandia National Laboratories (NM & CA); SRS, Savannah River National Laboratory (SC)

Fall 2006 Question to DOE Program Managers: 

“How has your program impacted the life of the American taxpayer?”

Answer: 

“[Good Answer]...but the ‘Commercialization Valley of Death’ has 

prevented us from being as effective as we’d like.”

6

The historical “Commercialization Valley of Death” refers to 

the quantitative challenge of transitioning between early adopters and mass market penetration

3. DOE Commercialization: Energy Effi ciency and Renewable Energy
46 Report of the EPA–Venture Capital Community Summit: Exploring Programs to Commercialize Environmental Technology

Appendix C: Summit Presentations (continued)

A technological innovation must overcome four challenging transitions before 

reaching the market.

Public benefit is 

only fully realized 

upon product 

delivery to market

7

Commercialization Scaling

1 2 3 4

Delivery

The EERE Commercialization Team focuses on building bridges between 

Applied Scientists and Technology Investors

Deployment Demand

Pull

EERE Commercialization Bridges 

are designed to overcome four primary gaps Information

3⁄4 Communication is a fundamental prerequisite of commercialization 

3⁄4 Technical language fails to resonate with the business community

Talent

3⁄4 DOE traditionally hires scientists – not businessmen

3⁄4 Commercializing technologies requires both technical & business skill sets

8

Strategy

3⁄4 The Commercialization Valley of Death is not unique to national laboratories

3⁄4 Best practices have been developed to foster a culture of innovation

Capital

3⁄4 Competition is stiff for venture capital funding

3⁄4 VCs more likely to fund business plans and prototypes than research papers

1 2 3 4

Built off a proven venture capital model, 

the Entrepreneur in Residence (EIR) program 

forms the primary plank of the TALENT BRIDGE

Technology

A technology that works

 Readily available at national labs

 Under-deployed due to focus on 

scientific research

A market ripe to sell into

 Market ready for clean energy

 $100+ oil, $12 natural gas, $4 gasoline

 Global climate change

 Sufficient degree of policy predictability

9

Fundable

Business

Entrepreneur Market

Venture Capitalists favor experienced entrepreneurs 

with a track record of identifying promising technologies and building markets

An entrepreneur who can execute 

 Build business plan

 Assemble management team

 Raise capital 1 2 3 4

DOE’s Entrepreneur in Residence program 

connects leading scientific and business talent

Structure

 DOE partnership with Venture Capital Firm

 EERE provides $100k matching-funds 

and full access to laboratory

Partners with

to sponso

National Laboratory

Entreprene r

10

Discover Evaluate Plan Spinout Build

 Venture Capital Firm identifies, hires and 

mentors EIRs

 Pre-Negotiated standard equity share license 

agreement

h VC firm 

or EIR

Venture Capital 

Firm

Entrepreneur

in Residence

1 2 3 4

3⁄4 Percent equity share

3⁄4 Equity share of company, 

royalties or combination

Tailored for entrepreneurs and small businesses, 

the Equity Share License agreement

forms a primary plank of the STRATEGY BRIDGE

Traditional License Equity Share License

3⁄4 Up-front license fee

3⁄4 Royalties

Laboratory

Benefit

Points of 3⁄4 All terms

Negotiation

11

3⁄4 Small businesses on tight budgets

3⁄4 Entrepreneurial ventures

3⁄4 17 pages

3⁄4 Large companies with cash on 

hand

Private Sector 

Preference

Built off the Stanford license, the Equity Share License has been pre-negotiated with 

venture capital general counsels, national laboratory general counsels and DOE general counsel

Length of 3⁄4 30 pages 

Contract

1 2 3 4

Designed to introduce investors to technology opportunities, 

the Technology Commercialization Showcase

forms the primary plank of the INFORMATION BRIDGE

Need

 Many EERE funded technologies stall in the “commercialization valley of death” simply because the innovation has 

not been clearly communicated to the business community

Structure

 Challenged EERE Program Managers to identify 8-10 most promising technologies in their portfolio

 Created simple, layman’s descriptions of the innovation opportunity

I it d i t i t t t d f h i t h l i

12

 Invited prominent investors to a two day conference showcasing technologies

Investors Represented

1 2 3 4

3. DOE Commercialization: Energy Effi ciency and Renewable Energy (continued)
Report of the EPA–Venture Capital Community Summit: Exploring Programs to Commercialize Environmental Technology 47

Appendix C: Summit Presentations (continued)

3⁄4 Problem: Carbon fiber, a lightweight replacement for structural steel, is currently too expensive for broad application ($12–$30/lb vs. $5–$8/lb)

3⁄4 Description: ORNL has developed technologies to reduce the cost of carbon fiber production by utilizing:

 Low costs feedstocks (low-cost textiles and renewable lignin) and 

 Advanced processing methods (thermo-chemical stabilization, rapid oxidation, and microwave-assisted 

plasma carbonization)

3⁄4 Impact:

 Automobiles: Reduces vehicle mass by up to 40% which increase fuel economy up to 25%

 Wind: Increases blade efficiency through superior properties

DOE Technology Commercialization Showcase Case Study:

Low-cost carbon fiber: increases fuel economy 25%

Stabilization/Oxidation Carbonization

Simple, 

layman’s 

description of 

technology

13

3⁄4 IP Position: 3 patents issued, 5 patents filed, 

7 invention disclosures 

3⁄4 Technology Status:

 4 processes reduced to practice: 

– Microwave-assisted plasma carbonization

– Textile-based precursors

– Thermo-chemical stabilization

– Plasma oxidation

 Time to availability: 3-5 years

 Capital Needs: A 2-4MM lb/year carbon fiber plant 

is expected to cost $18M–$22M

Dave Warren | ORNL | Phone: 865-574-9693 | WarrenCD@ORNL.GOV

Microwave-assisted plasma processing, shown in photograph, 

could replace conventional stabilization, oxidation, and 

carbonization processes represented in boxes at top of illustration

Stabilization/Oxidation Carbonization

Precursor

Sizing Surface Treatment

Finished Fiber

Direct contact 

to inventor

1 2 3 4

Filling the gap between R&D and venture capital funding, 

the Technology Commercialization Fund 

forms the primary plank of the CAPITAL BRIDGE 

Need

 Innovations struggle to find financing post-research 

and pre-venture capital funding as described by the 

“Commercialization Valley of Death”

Structure

 50-50 industry matched funds required

 Funds restricted to prototype development, 

demonstration and deployment not further

Laboratory

Funds

($MM)

National Renewable Energy Laboratory (CO) $4.0

Oak Ridge National Laboratory (TN) $4.0

Lawrence Berkeley National Laboratory (CA) $1.5

14

demonstration and deployment – not further

scientific research Designed to complement angel 

investment or early stage corporate product 

development

Decision criteria

 Potential market opportunity

 Likelihood of commercial success

 Management team

 DOE priorities

 Private sector partners

The Technology Commercialization Fund is a carrot to attract private sector partners 

to examine the national laboratories’ intellectual property portfolio

1 2 3 4

y y ( ) $

Pacific Northwest National Laboratory (WA) $1.5

Sandia National Laboratories (NM) $1.4

Los Alamos National Laboratory (NM) $0.7

Argonne National Laboratory (IL) $0.7

Lawrence Livermore National Laboratory (CA) $0.5

3. DOE Commercialization: Energy Effi ciency and Renewable Energy (continued)

The Commercialization Team pursues an aggressive schedule to 

accelerate the deployment of advanced energy technologies

2007 2008 2009

Senior Executive 

Service Interviews Solicitation Open

Draft Job 

Description SES Senior Advisors onboard

Summer Associates

Summer 

Associates at 

DOE

Recruiting

Summer 

Associates at 

DOE

Recruiting

Commercialization

Solicitation 

Open Draft Solicitation Entrepreneur-inResidence EIRs working in Lab

Announce

Selectees

TALENT

15

Commercialization

Fellows Recruit Commercialization Fellows at NREL

Website Create Website 

Architecture Website Live Create Website Architecture/Draft Initial Material

Innovation Study Solicitation 

Open Market Research Innovation Study

Lab Relationships Lab Visits Lab Visits

Solicitation 

Open

Technology 

Commercialization 

Fund

Evaluate 

Proposals Fund Projects

Prepare Materials

Technology 

Commercialization

Showcase

Distribute Materials Prepare Materials Distribute Materials

Event Event

INFORMATION CAPITAL STRATEGY

1 2 3 4

The EERE Commercialization Team advises many of the 

Department’s public-private initiatives Deployment Programs

3⁄4 Commercial-scale integration and demonstration

3⁄4 Hawaii Clean Energy Partnership

3⁄4 Greensburg, KS

3⁄4 New Orleans, LA

3⁄4 Federal Energy Management Showcases

3⁄4 National Parks Service

3⁄4 National Marine Sanctuaries

16

Advisory Roles

3⁄4 Loan Guarantee Program (EPAct 05 Title XVII)

3⁄4 DOE Technology Transfer Policy Board (EPAct 05 § 1001)

3⁄4 Commercial-Scale Cellulosic Biorefineries (EPAct 05 § 932)

3⁄4 Freedom Prize (EPAct 05 § 1008)

Policy Proposals

3⁄4 Quasi-Governmental Agency for Clean Energy Financing

3⁄4 Advanced Research Projects Agency – Energy (America Competes 07 § 5012) 

3⁄4 Tax Policy

For further information please contact the 

Commercialization Team

• Carol Battershell, carol.battershell@ee.doe.gov

• Drew Bond, drew.bond@ee.doe.gov

@

17

• Wendolyn Holland, wendolyn.holland ee.doe.gov
48 Report of the EPA–Venture Capital Community Summit: Exploring Programs to Commercialize Environmental Technology

Appendix D: Stages of Investment

1

Analysis of Investment Styles

Sustainable 

Development 

Investments

Venture Capital: New Clean/Environmental Technologies

Angel / A

Buyout / 

Expansion / 

PIPES

Clean Energy Infrastructure

Existing and New Technologies

Technology 

Identification & 

Business 

Formation

B / C D / IPO

Pilot

Plant

Demo 

Plant

First

Commercial 

Scale Plant

Project 

Development

Project 

Finance 

(Infrastructure)

Portfolio of 

Assets

Style Stage  The sustainable development investment opportunity is broad and, as such, comprises a 

wide range of investment styles across various stages of a company’s development:

• Clean technology venture capital will require a significant amount of additional private equity to 

take new (and existing) technologies that are proven in pilot and demonstration plants to 

commercial scale 

• While project development permitting risk is typically considered arbitrary and difficult to judge, 

macro trends supporting the clean energy infrastructure build out (i.e. renewable portfolio 

standards and cap & trade regimes) can help to mitigate this permitting risk

• The later stage private equity clean energy opportunity is more limited, but will grow over time 

as more clean energy infrastructure is built. Consolidation and buyouts are already beginning 

to occur, particularly in more mature markets in Europe

2

Analysis of Investment Styles – Risk and Return Profiles, Financing 

Risks

Venture Capital: New Clean/Environmental Technologies

Angel / A

Buyout / 

Expansion / 

PIPES

Clean Energy Infrastructure

Existing and New Technologies B / C D / IPO

High

 Technology selection 

 Business formation 

 Initial management 

selection

 Execution strategy 

 Technology scale up risk 

from “bench scale” to 

integrated demonstration 

scale

 Engineering, design

 Management 

Medium

 Financing risks

 Performance 

guarantees

 Site and permits 

 Engineering & design

 Additional scale up:

 Construction cost

 O&M

 Performance

 Site selection 

 Permitting

 Securing equipment

 Contractors’ cost 

estimates

 Organizational 

structure and 

management

 Financing 

Low to Medium

 Valuations

 Growth potential / 

incremental 

development

 Capital structure

 Off-take agreements 

(i.e. Power Purchase 

Agreements or 

“PPA”s)

 Engineering, 

Procurement and 

Construction (“EPC”) 

contracts

 Supply agreements & 

logistics

 Project debt & equity 

financing

 Hedging

Style Returns

 40%+ IRRs

 New “disruptive” technologies, such as: 

 Solar thin film, other non crystalline technologies

 2nd generation biofuels, including cellulosic ethanol

 Coal gasification; carbon capture and sequestration

 Battery technology (auto)

 25%-30%+ IRRs

 Development promote:

 Repayment of costs at financial close

 Equity promote to developer

 Growth: wind, solar thermal, geothermal, 

biofuels, waste-to-energy, hydro

 12% - 20% IRRs, 

depending on 

cash flow volatility 

– i.e. low (landfill 

gas); high 

(biofuels)

 25%+ IRR

 Growth

 Equipment/services

 Generation/develop.

 $100bn total market 

cap all clean energy

Technology 

Identification & 

Business 

Formation

Pilot

Plant

Demo 

Plant

First

Commercial 

Scale Plant

Project 

Development

Project 

Finance 

(Infrastructure)

Portfolio of 

Assets

Stage Fin.

100% Equity 70%-100% Equity 70% - 80% Debt Varies

Sustainable 

Development 

Investments
Report of the EPA–Venture Capital Community Summit: Exploring Programs to Commercialize Environmental Technology 49

Appendix E: Federal Register Notice for the EPA-Venture Capital Community Summit

Federal Register / Vol. 73, No. 214 / Tuesday, November 4, 2008 / Notices 65603 

Subsegment Waterbody name Pollutant 

090106 ................................. Holmes Bayou—From the Pearl River to the West Pearl River (scenic) .................... Mercury and Turbidity. 

090107 ................................. Pearl River—From Pearl River Navigation Canal to Holmes Bayou .......................... Mercury. 

090201 ................................. West Pearl River—From Headwaters to confluence with Holmes Bayou (scenic) ..... Mercury and Turbidity. 

090202 ................................. West Pearl River .......................................................................................................... Turbidity. 

090202–5126 ....................... Morgan River—From Porters River to its confluence with Pearl River (scenic) ......... Mercury. 

090203 ................................. Lower Bogue Chitto—From River Navigation Canal to Wilsons Slough ..................... Mercury. 

090204 ................................. Pearl River Navigation Canal—Below Lock No. 3 ...................................................... Mercury and Dissolved oxygen. 

090205 ................................. Wilson Slough—Bogue Chitto to West Pearl River ..................................................... Mercury. 

090206 ................................. Bradley Slough—Bogue Chitto to West Pearl River ................................................... Mercury. 

090207 ................................. Middle Pearl River and West Middle Pearl River—From West Pearl River to Little 

Lake.

Mercury and Dissolved oxygen. 

090207–5112 ....................... Morgan Bayou—Headwaters near I–10 to confluence with Middle River ................... Mercury. 

090301 ................................. Pushepatapa Creek ..................................................................................................... Fecal coliform. 

090401 ................................. Bogue Lusa Creek ....................................................................................................... Fecal coliform. 

090501 ................................. Bogue Chitto River—From MS State Line to Pearl River Navigation Canal (scenic) Mercury and Turbidity. 

090502 ................................. Big Silver Creek ........................................................................................................... Fecal coliform. 

090505 ................................. Bonner Creek ............................................................................................................... Fecal coliform. 

090506 ................................. Thigpen Creek .............................................................................................................. Fecal coliform. 

EPA requested the public to provide 

EPA with any significant data or 

information that might impact the 29 

TMDLs in the Federal Register Notices: 

Volume 72, number 137, page 39420 

(July 18, 2007) and volume 73, number 

22, pages 6178 and 6179 (February 1, 

2008). The comments which were 

received, the EPA’s response to 

comments, and the TMDLs may be 

found at http://www.epa.gov/region6/ 

water/npdes/tmdl/index.htm. 

Dated: October 28, 2008. 

Larry D. Wright, 

Acting Director, Water Quality Protection 

Division, EPA Region 6. 

[FR Doc. E8–26262 Filed 11–3–08; 8:45 am] 

BILLING CODE 6560–50–P 

ENVIRONMENTAL PROTECTION 

AGENCY 

[FRL–8737–6] 

EPA-Venture Capital Community 

Summit: Exploring Programs to 

Commercialize Environmental 

Technology 

AGENCY: Environmental Protection 

Agency. 

ACTION: Notice of meeting. 

SUMMARY: The Environmental Protection 

Agency (EPA) will hold an EPA-Venture 

Capital Community Summit: Exploring 

Programs to Commercialize 

Environmental Technology to follow up 

the National Advisory Council for 

Environmental Policy and Technology 

(NACEPT) report on ‘‘EPA and the 

Venture Capital Community: Building 

Bridges to Commercialize Technology’’ 

(April 2008). The report recommends 

that EPA create programs, similar to 

those of the U.S. Department of Energy, 

to provide financial support (e.g., loan 

guarantees, grants, revolving loan funds) 

to encourage venture capital investment 

in environmental technology 

commercialization. The Summit will 

bring together senior career EPA 

managers (Deputy Assistant 

Administrators and Deputy Regional 

Administrators) with senior venture 

capitalists who were part of the 

NACEPT Venture Capital Study. A 

report will be produced from the 

Summit that will be a companion to the 

NACEPT Venture Capital Report; both 

will be given to the next 

Administration, the venture capital 

community, technology developers, 

state and local governments, 

Congressional members and staff, 

academia, and members of the public. 

The Summit will be open to the public. 

DATES: The Summit will be held on 

November 12, 2008, beginning at 10 

a.m. and adjourning at 4:30 p.m. 

Registration is at 9:30 a.m. Times noted 

are Eastern Time. 

ADDRESSES: The meeting will be held at 

the Ronald Reagan Building and 

International Trade Center, 1300 

Pennsylvania Avenue, NW., 

Washington, DC, in the International 

Gateway Room on the Mezzanine. 

SUPPLEMENTARY INFORMATION: The 

Venture Capital Report is available 

electronically through http:// 

www.epa.gov/etop. A hard copy of the 

report can be ordered from the National 

Service Center for Environmental 

Publications by requesting document 

number EPA/600/R–08/043 through the 

Web site ordering system at http:// 

www.epa.gov/nscep or by calling 1– 

800–490–9198. The agenda for the 

Summit can be found electronically 

through the EPA Web site at http:// 

www.epa.gov/ncer/venturecapital. 

The Summit is open to the public. 

Registration before the Summit is 

requested. Any member of the public 

wishing to make a presentation at the 

Summit should request to do so 

beforehand. Presentations should be 

limited to 3 minutes or less. Time 

allotted will be shortened if several 

people request to speak. 

The results of the Summit will be 

discussed the following day (November 

13) in a NACEPT forum on future 

directions for EPA to be chaired by the 

EPA Administrator. This forum will be 

part of the NACEPT Council 20-Year 

Meeting on November 13 and 14, for 

which there will be a separate Federal 

Register notice. 

Special Accommodations: EPA 

welcomes the attendance of the public 

at this Summit and will make every 

effort to accommodate persons with 

disabilities. If you require special 

accommodations due to a disability, 

please contact Linda Parham at 

parham.linda@epa.gov at least seven 

days before the meeting. 

FOR FURTHER INFORMATION CONTACT: To 

register for the Summit, request time to 

make an oral public comment at the 

Summit, and for details on how to 

provide written public comments, 

please see the National Center for 

Environmental Research’s Web site at 

http://www.epa.gov/ncer/ 

venturecapital. Questions about the 

Summit and written comments should 

be submitted to Paul Shapiro at 

shapiro.paul@epa.gov. 

Dated: October 28, 2008. 

William H. Sanders III, 

Director, National Center for Environmental 

Research. 

[FR Doc. E8–26263 Filed 11–3–08; 8:45 am] 

BILLING CODE 6560–50–P 
50 Report of the EPA–Venture Capital Community Summit: Exploring Programs to Commercialize Environmental Technology
Report of the EPA–Venture Capital Community Summit: Exploring Programs to Commercialize Environmental Technology 51
52 Report of the EPA–Venture Capital Community Summit: Exploring Programs to Commercialize Environmental Technology