Alternative Fuel Expert Witnesses Comment on Misrepresentations by Novel Bio Fuel Producer

Case Overview

This case involves a renewable products company that alleged it would be able to provide sustainable alternatives to a broad range of petroleum-sourced products, from new sources of natural energy and solar panel designs to inventive replacements for traditional fuel-cell models. The company in question then had an IPO, resulting in a large rush of investment. However, it was quickly determined that the company was unable to deliver several of its core products in a time frame and scale that the company had promised investors. As a result, the company’s stock rapidly lost value, causing several investors to sue for material misrepresentations allegedly made by the company before its IPO.

Questions to the Chemistry expert and their responses

Are you able to discuss standard business practices for renewable energy companies?

I am able to discuss standard business practices for renewable energy companies. I have seen it from the inside as a Vice President at several large energy companies, as well as from the outside in my capacity as a consultant, often up close and personal.

Are you familiar with the barriers to entry for renewable energy companies?

I am familiar with the barriers to entry for renewable energy companies. If a company is looking for a fuel precursor, that company must deliver a product that fits the existing infrastructure. Alternatively, if the company is not in the fuels business, then it is in the infrastructure business. Regarding scale, no refiner will take you seriously unless you can deliver at least 10,000 barrels per day. Thirdly, if you are looking at this particular product area, there are companies that think they can make a new fuel from a totally different approach, but that simply will very rarely work. Specialized fuels are a highly complex mix comprising almost countless different hydrocarbons that together meet the spec. Generally speaking, it is not difficult to inflate investor expectations beyond what is technically or economically feasible.

About the expert

This expert has been working in the energy industry for nearly 40 years. He has a doctoral degree in organometallic chemistry and completed a postdoctoral fellowship with NATO, and since 1995 he has raised close to $125 million in Federal funding. As Chief Scientist and Program Manager for Rohm and Haas Company, this expert built a world-class research and development team and initiated research programs into biofuels. With Imperium Renewables, Inc., he was responsible for all aspects of research and development for the growing biofuels company, which was at the time ready to position itself as the largest biodiesel producer in North America. As Vice President of Downstream Technology with Sapphire Energy, he was responsible for all activities starting from algae recovery from water all the way to finished diesel, gasoline, and jet fuels. Currently, this expert is the Vice President of Business Development at a renewable energy company with $80+ million in sales.

E-007186

Specialties:

Chemistry