In the next 30 years, the world will need 30 percent more energy due to population growth. While energy production will increase to keep up with demand, there is an increasing concern with the impact on the environment.
"How do you produce more energy without emission increases or more air quality pollution?" asks Erdin Guma, CFO of Penrose Technologies.
According to Guma, Penrose is uniquely well-suited to solve these serious challenges with its advanced process control technology increases the productivity of a chemical plant or refinery by 10 to 15 percent. The increase in productivity means the plants use less fuel to produce the energy. The plant then releases fewer emissions while producing the same amount of energy.
The technology itself is an automation software — similar to autonomous software on a plane. The autonomous operation increases downstream productivity, which brings about the energy efficiency.
"Our autopilot software (like a human operator) can manage and foresee any unexpected disturbances in the plant," Guma explains. "The achievements that the Penrose technology has brought about seemed impossible to chemical and process engineers in the refinery space a few years ago."
Penrose recently signed its first project with one of the biggest downstream firms in the world. With a network of refineries and petrochemical plants around the world, this contract could lead to a global roll out of the Penrose technology.
A ground-breaking technology for O&G
The word "Penrose" is taken from a penrose triangle, an impossible geometrical object. Guma explained that the energy efficiency brought about from their software seemed impossible at first. Penrose has been able to reduce emissions inside plants and refineries by 15 to 20 percent while keeping production at the same level.
In 2007, a chief engineer working at a major oil and gas processing plant in Houston procured the technology for one of his plants. When the engineer saw how well the technology worked, he founded Penrose Technologies in 2017 with Tom Senyard, CTO at Penrose, who originally developed the technology.
After starting the company at the end of 2007, Penrose joined Station Houston. Guma said that by becoming a member, Penrose was able to plug into a large refining and petrochemical network.
"Penrose Technologies is completely self-financed. We worked with [Station Houston] as we finalized the software to find out what potential customers thought of the product. For us, Station Houston has been a great sounding board to potential investors in the company," Guma says.
Guma also explained that while there has been an uptick in innovation in the last few years, the refining and petrochemical business is traditional a slow mover in the uptake of innovation.
"I think more major oil and gas firms are becoming attune to startups and the innovation solutions they offer," Guma says.
He went on to explain that the biggest challenge Penrose faces is perception. Since the software allows plant operators and engineers at the plant to be hands off in the processes, there is a concern with reliability. For industry insiders, any viable product must be reliable even when process conditions at the plant change, which can happen often.
"The Penrose software is maximum hand off control from operators, and the reliability of our software gives us a huge edge in other competing products that can be unreliable," Guma says.
Future growth on a global market
Given the pressing need for more environmentally sustainable energy production, new technology will be adopted in the oil and gas energy. As Guma explains it, there will be no way to continue producing energy as it's been produced for decades because the negative effects of air pollution and emissions will be too severe — particularly in the areas where refineries operate.
"We see the global market for this type of technology as severely underserved," Guma says. "It's a big and sizable market, and I think we can reach a $2 to $3 billion valuation in the next five years."
With a core team of six employees in Houston, Penrose's software is now commercially available, and the company is in full growth mode at this point. The software can be distributed directly to customers, but they are working to develop distribution with major engineering companies as well.
Guma is grateful to be in an environment conducive to energy start-ups. He sees Houston as a major advantage given its proximity to the energy sector.
"No technology rises up in a vacuum. Any new technology needs a good ecosystem to come from," says Guma. "Houston was that ecosystem for Penrose."
Paul Orland is CEO of Tachyus. Photo via tachyus.com
Collin McLelland (right) and Jacob Corley are the hosts of Oil and Gas Startups Podcast.