Coal is no longer the dirty word it once was. And there’s no better indication than the $75.9 million recently pulled in by Luca Technologies, a company that engineers microbes to produce methane gas from coal. This brand of innovation could be good news all around as the incoming presidential administration emphasizes clean-burning energy despite cheap surpluses in the U.S. coal supply.
The round, which will be used to acquire new coal beds in Wyoming’s Powder River Basin (its primary site) and elsewhere around the world, has bumped the company’s valuation to $245.6 million, a 116 percent increase over last year, according to VentureWire. Large chunks of capital came from One Equity Partners ($40 million) and Kleiner Perkins‘ new Green Growth Fund ($20 million), two firms that have exhibited heightened interest in coal.
Luca’s microbes are capable not only of breaking down coal into methane, but also of reviving old coal deposits and natural gas wells. In the Tongue River area of Wyoming, it ran a project that brought 108 natural gas wells back to life — producing more than 1.5 billion cubic feet of gas overall, reports VentureWire. It already counts 630 wells and 20 reclamation projects among its assets, but is actively seeking oil and gas companies looking to hand off their properties, perhaps as a part of a joint-venture deal.
Luca faces several major competitors in the coal gasification field, including Kleiner Perkins-backed GreatPoint Energy, Laurus Energy, and Econo-Power International. But in the larger scheme of things, the jury is still out on the process. After all, it’s not a renewable source of energy — and while relatively cleaner, still produces some harmful emissions. As more money gets poured into cleantech, and alternative means of energy like solar and wind become more practical, coal gasification may increasingly become a stop-gap technology like ethanol — a transient solution worth the bucks right now but perhaps not in the future.
The new money represents Luca’s third round of financing, which also included several undisclosed investors. It last raised funds in October 2007, bringing in $20 million from Kleiner Perkins, Caufield & Byers, Oxford BioScience Partners and BASF Venture Capital. Before that, its first round totaled $3 million in 2006.