In November 2011, the Digest ran a story on a remarkable proposition — advanced by Richard Hamilton, then CEO of Ceres — that biofuels companies – on the “level playing field” theory advanced by opponents of government mandates and subsidies, should have a mechanism to book their reserves of crude renewable fuel production, in a parallel to the reserve accounting system associated with oil & gas projects.
About proved reserves and balance sheets
Most investors understand proved reserves. Under specific (and generally conservative) SEC rules, proved reserves (that is, which have a 90% or higher probability of being feasibly extracted) can be added to the balance sheet. In Houston in 2013, as the biofuels world considered the short-term implications of cuts in the Renewable Fuel Standard targets, a small group gathered at a workshop at Total Energy USA to consider the long-term implications of developing a classification system for renewable energy reserves — a system for valuing renewable energy reserve that parallels the way we value oil reserve, which helps make them inherently more fungible, more comparable, more investable.
And work in earnest that began there has reached a new threshold, as this presentation given at ABLC 2018 by Mike McCurdy os ICF demonstrates.