Investing in Tomorrow: How Innovative Investments Will Begin Fueling the Energy Transition

All of a sudden there’s a new landscape for energy transition. The new administration is reducing the workforce of several federal agencies, including the EPA, where administrator Lee Zeldin is committed to eliminating 65 percent of what he calls the agency’s wasteful spending, and President Trump just signed four executive orders that direct different agencies of the federal government to revive American coal. State governments, businesses, and financial stakeholders will need to navigate all of this agency change to meet their existing energy mandates. Will there be a new way forward for battery, wind, and solar energy technologies? And are there long-term investment strategies and out-of-the-box energy opportunities for investors to support the ongoing energy transition?

 In the sixth episode of Accelerating Energy, host and Sidley partner, Ken Irvin, speaks with John Skrinar, a partner at Cresta Fund Management, a company dedicated to assisting stakeholders and funding businesses to achieve a strong return on their investments, while creating a more sustainable future. Together, they discuss how investors can drive the energy transition forward through finding innovative investment opportunities which utilize proven technologies but also balance out the bottom line for stakeholders. 

 Executive Producer: John Metaxas, WallStreetNorth Communications, Inc.

Transcript

Investing in Tomorrow: How Innovative Investments Will Begin Fueling the Energy Transition 

Ken Irvin and John Skrinar
 April 2025

Ken Irvin:

All of a sudden there’s a new landscape for energy transition. The new administration is reducing the workforce of several federal agencies, including the EPA, where administrator Lee Zeldin is committed to eliminating 65 percent of what he calls the agency’s wasteful spending, and President Trump just signed four executive orders that direct different agencies of the federal government to revive American coal. State governments, businesses, and financials stakeholders will need to navigate all of this, restructuring this change, to meet their existing energy mandates. 

John Skrinar:

Our niche is really around development and developing new or redeveloping brownfield assets for lower carbon opportunities, right, and I think, for us, it’s mostly about the molecule.

Ken Irvin:

That’s John Skrinar, a partner at Cresta Fund Management, a company dedicated to assisting stakeholders and funding businesses to achieve a strong return on their investments, while creating a more sustainable future. Are there technologies behind battery, wind, and solar energy available? And are there long-term investment strategies and out-of-the-box energy opportunities for investors to support the ongoing energy transition? We’ll delve into these issues and more in today’s podcast. 

From the international law firm, Sidley Austin, this is Accelerating Energy. We drill down on critical and late-breaking topics in energy transition and policy. We help businesses look over the horizon for what lies ahead. I’m your host, Ken Irvin. 

Hello, and welcome to Sidley’s Accelerating Energy podcast, episode number six. John, it’s great to have you here today. John provides valuable insight into the intersection of investment and sustainability in our discussion today, drawing from his background as a private equity advisor, specializing in the energy transition, as well as his prior roles, including serving as North American Head of Renewable Energies for Gunvor and serving as Managing Director at Noble Group for global renewable fuels.

John Skrinar:
 Thanks, Ken. Good to be here.

Ken Irvin:

Before we start, John, would you please say a bit more about your role and about your company, Cresta Management? As I understand it, Cresta takes a unique perspective on the energy transition by focusing more on niche investment opportunities, out-of-the-box investment opportunities.

John Skrinar:

Yeah, sure thing. I’m a partner at Cresta. I lead our Sustainable Fund series, which is two funds at this stage. We primarily are looking at solutions around logistics and transportation, agriculture (ag), and waste, and heavy industry. Those are the industries that we look towards and try to solve problems for. Our niche is really around development and developing new or redeveloping brownfield assets for lower carbon opportunities, right, and I think, for us, it’s mostly about the molecule. I think we’re starting to see some...a little bit of the graying of the lines, where batteries start to creep in and create opportunities to displace fuels inside manufacturing processes, but we’re not investors in solar or wind or power generation. It’s really more on the molecule side.

Ken Irvin:

How does Cresta help stakeholders find these innovative opportunities? What are the keys that you look for in ag, waste, logistics that give you that investment opportunity, that hope for a return?

John Skrinar:
 With the infrastructure slant, we’re looking for ways to help decarbonize supply chains, and so, it’s easy to decarbonize a supply chain, but it’s not easy to do it in a cost-effective way that is accepted by society and stakeholders. I think part of the error of our energy transition ways for the last five-ish years was the idea that cost didn’t really matter, and really, the only important thing was lower carbon, and that just has gotten turned on its head.

And I think, certainly, this administration, and other administrations throughout the globe, are realizing that you can’t just throw the price or the cost of a solution out the window as you’re evaluating it. You know, hydrogen’s a great example, and I think there were a lot of plans to go and build hydrogen buses and fleets, but the practical reality of a hydrogen-powered fleet has started to dawn on folks, and a lot of those are getting canceled because it doesn’t have the energy density that we’re used to, and so, if you've got a bus fleet that’s not relying on hydrogen fueled cells, that cost of fuel may be three, four, or five times more than diesel or natural gas, which is the incumbent solution.

Ken Irvin:

I totally understand and relate to what you were saying about people didn’t appreciate the cost to the individual consumers of this energy transition, and certainly, there’s a lot of innovation and a lot of cool tech. You know, the idea of making hydrogen out of electrolysis is a great idea. Unfortunately, it costs a lot of money, right? Hydrogen and ammonia both offer opportunities for our low-carbon energy and help reaching net zero targets by 2050. We haven’t really talked much with other guests on the podcast about those types of energy sources and what it takes to be successful there. I understand Cresta has had some success with those investments in that area?

John Skrinar:

I think we’ve spent a lot of time around ways to economically and effectively reduce the carbon intensity of a manufacturing process, of a fuel, of a gas input. You know, hydrogen is really challenging, and I think even in places where you’ve got phenomenal renewable energy attributes, and you’ve got local demand for hydrogen, we found it really hard, even with the incentives that are in place, or proposed incentives that are in place, in certain cases and jurisdictions we found it really hard to make sense of hydrogen. 

And part of that is the cost of carbon, and what is the downstream user of a widget or a fuel willing to pay for that decarbonization, and I think that goes back to sort of my earlier points, that, you know, in today’s industrial world, hydrogen from natural gas sources is a dollar to a dollar fifty a kilogram, and what we found is, even in these really compelling renewable energy locations, with localized demand, that number may still be four to five dollars a kilogram. That runs through your supply chain in a way that is just not adjustable today, I think.

Ken Irvin:

I don’t want to interrupt you too much, but I did want to ask about the tax credits and see how that helps on the economics, because we’ve got 45V for hydrogen, clean hydrogen. We’ve got 45Q for carbon sequestration, 45Z. Do these tax credits help the economics? Are you a little worried they might go away?

John Skrinar:

Certainly, that’s a risk. I do think that you’ve got pretty broad support for some of the IRA components. It’s clear that President Trump and his administration are going after the electric vehicle stuff, but the 45V, the 45Z, the 48Y, 45Y, 48E...I can’t remember all of the numbers and letters, but...

Ken Irvin:

Yeah, it’s like the tax writers just wanted to trip us up with all that. Yeah, I get you.

John Skrinar:

I think there’s broad support. We’re seeing it in the House. We’re seeing it in the Senate. There’s continually both sides of the aisle popping up, supporting a lot of those components of IRA. So, I actually think they are more durable than probably most would assume, with the Trump administration, but again, it’s about the...there are certainly places where you could use some of those incentives to bring the cost down to closer to the conventional...just picking on hydrogen, hydrogen.

But there’s just not a lot of places where you’ve got a ton of low-cost green power and hydrogen demand, and so, you start to think about where does this actually work? And that’s a much smaller pool than other places, and if you’ve got to store hydrogen, right, and a lot of places...you know, like a refinery. Refinery needs hydrogen 24/7. They can’t have hydrogen being intermittent, and so, then you’ve got to layer in either a hydrogen storage solution or a battery to store the power so you can modulate it and have it be sort of a baseload supply into your hydrogen production.

And that just costs more money, right? I think that’s where we’ve gotten to, is that the technology is pretty sound. It’s the input cost and the demand profile and finding ways for that energy supply, the demand profile, and the input cost to come together in a Venn diagram that makes sense, and as we map it, there’s just very few of those instances.

Ken Irvin:

Yeah, I get that the delivered cost of, you know, the technology is great, the solution looks awesome, but when you layer in the cost and the ultimate delivered price for all of that, it’s very expensive, and it doesn't yet compete and perhaps so, even with tax credits. Are there other incentives, other things you’d like to see the market evolve or the regulators, the policymakers, do to help that marketplace?

John Skrinar:

It would be great if you had a more coordinated and seamless global market for this stuff, but I feel like where we’re going right now is the other way, right? I think we’re on the cusp of some deglobalization, and I don't know that that’s actually going to happen, but it can get slowed down, it can get paused, right? You know, it’s two steps forward, one step back. But the idea that we’re going to have some global coordination around carbon pricings or carbon policies, I don’t think is going to happen under this administration, and certainly, the U.S. is going to carry a lot of that weight in those conversations, but you know, we’re not here for this week and next week and next year. This is a long-term perspective that we have, that the world is moving to lower carbon, and I think the stickiness of a lot of the corporate buyers and users of fuels and power is indicating that this isn’t going to go away anytime soon, but as with any sort of transition, there are lumps and bumps along the way.

Ken Irvin:

Oh, if it was easy, it’d be boring, right? You know, what’s the fun in that? It needs to be challenging, you know? Another kind of buzzword that I’ve heard from clients and others is energy parks. You know, the notion of keeping energy localized, the production of energy localized to the consumption of energy, and if we’re combining these new technologies, the production of hydrogen, ammonia, or others, together with whatever end use, wherever storage of the carbon would occur, does that help the economics? Is the possibility of more industry, industrial production returning to the United States? Does that help build a use case for these alternative fuels?

John Skrinar:

It certainly can, right, and I think one place where we’re evaluating now and have spent years evaluating, but we’re constantly evaluating, is around that carbon sequestration, and you know, conventional natural gas, coupled with sequestration, produces a lower carbon molecule that can really go into anything. A lower carbon and methane supply chain can go into a power plant. It can go into fuels. It can go into hydrogen production, right? There are varying shades of colors in this transition, and everybody talks about, you know, green and pink and turquois and gold and you know, depending on what molecule they are discussing, or electron, but I do think that there are...the idea of an energy park, as you started out with the concept, it’s compelling, and I think if you look at our… in North America at least, if you look at our grid and our transmission lines, I think the problem that everybody’s talking about is we need more T&D, and we need more pipelines. Building new pipelines and building new transmission is really difficult, and so, finding ways to create those behind-the-meter solutions I think is going to be a big part of the next five to 10 years, ways where you can, you know, take conventional gas, put it into a combined cycle engine, pull off that CO2, sequester the CO2, and power a data center. We have the right mix to do that now and in a pretty cost-effective way if you look at some of the costs of power.

So, yeah, that’s something that we look at, are continuing evaluating opportunities. Again, we’re not going to build a combined cycle. We’re not going to pair it up with our wind farms, but there’s a lot of work that needs to get done in that supply chain, and certainly, our expertise around sequestration through Lapis, through renewable natural gas, through LF Bioenergy, through fuels at our refinery in Newfoundland at Braya, we understand where we fit and how we can complement that.

Ken Irvin:

It’s clear that your role for those types of projects, that type of innovation is necessary to capital formation. I commend you all on your success for that, and you’re right to put your finger on demand for infrastructure, because the future of electricity demand looks to be going up. People debate about how much, but it’s going up. One of the things that I keep harping on is cooling. The demand for air conditioning is going up. That’s electricity. Obviously, we talk about data centers and AI all the time, and so, thermal-fired power generation is going to be with us.

And it may, in fact, involve coal-fired generation. That’s what Mr. Trump said with his executive order, so we’ll see about that. All of this has got a big backdrop of regulation and public policy and you know, it’s a truism that regulatory uncertainty is bad for investing, but you know, what regulatory concerns do you see out there that you’re worried about, you’re thinking about when you’re taking a project, a proposed investment to committee for approval?

John Skrinar:

We think about it day and night, and it’s part of how we underwrite any investment that we make. You know, we’ve had good experiences and bad experiences, but my concern around that is the gridlock and the lack of decisions and the lack of a clear path, whether that’s EPA Class VI permitting process, which has taken longer than anybody would hope, whether that’s for sequestration.

Ken Irvin:

From the sequestration you mean, that’s the Class VI permitting, sequestration?

John Skrinar:

Transmission, Cresta, after four years, got a record of decision on one of our portfolio companies who was building an offshore crude export facility in the gulf. That project was started in 2020, and we got our ROD, you know, a month ago or two months ago, but that permitting process just takes a long time, and so, I think where we approach opportunities on the development side or redevelopment side is really understanding what's in front of us on permitting. You know, in 2021, we started seriously thinking about carbon sequestration. That’s a 2010 rule that took a lot of time to get fully vetted, and then I think the first Trump administration, we finally got the clarity in 2019 that we needed to start making investments around sequestration.

But for us, we started looking in 2020 and 2021 seriously around sequestration, and our perspective then was, wow, these big pipelines that are getting proposed, Navigator, Wolf, Summit, that’s really big-scale projects that drive down the cost in a way that is really meaningful, but man, there’s a lot of execution risk around these things. You’ve got state-level permits. You’ve got federal permits. You’ve got county-level, right, and you’re building thousands of miles of pipeline across the US, and we’ve seen that fail a few times, and so, that, for us, was too much risk. Clearly, they’ve hit a rough patch. Two of them have been canceled, and one is really delayed. So, we were glad we didn't get involved. 

Now the success we’ve had at Lapis is really around localized solutions, and so, where can we make a solution for a few facilities? One, maybe three, maybe four that are within a 20-mile radius. You don’t have to build across state lines. You don’t have to deal with lots of rights of way and easements. So, the lower the complexity, the more compelling it is for us. I think that’s probably the best takeaway.

Ken Irvin:

Interstate carbon dioxide pipelines is a complicated area, right? We have no federal regulation, beyond just pipeline safety. It’s not regulated under the Natural Gas Act, for example, so it’s complicated, and yeah, it’s very subject to state landowner interests that can at least protract, if not outright kill, a project. So, it makes sense to localize around where the carbon is going to be sequestered, and then try to find adjacent business opportunities that will manufacture the carbon for you so you can inject it. There’s also a market for carbon dioxide, though, isn’t there? If we’re going to capture carbon dioxide, can it be processed, purified, and then resold into other uses? I know it’s used in the food industry a lot, for example.

John Skrinar:

The largest users of CO2 in North America are the meat packing companies. It’s a critical part of their manufacturing process, and without it...you know, it’s not a big part of their cost, of their operating cost, but without it, they can’t run, and so, you think about CO2 as, you know, goes into beverages, right? Goes into meat processing. It goes into all kinds of industrial use cases, and so, yeah, I mean, Lapis is really a carbon solution company. It’s not just a sequestration company.

They’re looking at projects to capture CO2 and bring it to the markets that need it, and I think one of the fears of the big pipelines...and there have been successes. Tallgrass is operating and has a number of plants and growths in front of it. That was a repurposed pipeline. That didn’t have to build a new pipeline, right? It was an old gas pipeline that’s been repurposed, but there’s a lot of consternation around where am I going to get my CO2 from if all these ethynyl plants put their CO2 in a pipeline and it gets sequestered?

How do I get more CO2, and is it okay to be taking CO2 out of the Jackson Dome and then putting CO2 underground and collecting an incentive from the government? So, are those activities going to continue on? And I think there’s a lot of fear that we may be short CO2 for these industries that’ve become used to the supply chain that they’ve put in place. So, that’s part of the solution that Lapis is trying to provide folks, is we can help you with whatever your CO2 problem is, whether it’s getting rid of it down a hole or getting rid of it into industry.

Ken Irvin:

It would be terrific to find a way to capture it and then monetize it, right? Like, right now, so much of CO2 coming out of electric generation is viewed as a waste product, an unwanted consequence, and to find some way to make it into a useful product, something with utility, boy, that sounds like a terrific investment if you could really make that successful.

John Skrinar:
 We’re looking at that, too. Problem there is a lot of the gas that gets into these powerplants doesn’t have a ton of CO2. There’s only specific fields that are sort of high concentration of CO2, and then it becomes, you know, a scale issue where you’re like, gosh, I’m going to put in all this capital to capture the CO2, you know, on the back of a flue gas, effectively, and I’m only getting two percent or five percent gas concentration. That’s tough math.

Ken Irvin:

You’re making a use case for coal-fired generation. It all comes back to it, you know? So, without the jocularity, John, this has been terrific talking with you. Let me ask you this. Looking ahead, what are you thinking about? What are you looking toward? What do you see as the future a year, two years, five, ten years down the road?

John Skrinar:

I think for us, thematically, places where we’re excited. We’ve got a big investment in a refinery that was an old oil refinery that makes renewable diesel, and soon, we’ll be making sustainable aviation fuel (SAF). Ultimately, I see all of that production globally probably getting pointed at sustainable aviation fuel, not because any other reason other than that’s highest and best use. We’ve got solutions for trucks that are lower carbon.

Ken Irvin:

Well, the volume of jet fuel consumed every day is, like, a very big number, right? So, if you can supply it with SAF...

John Skrinar:

Yeah, it’s a big number, and anybody who’s making renewable diesel...and certainly, ethynyl can get transformed into jet fuel. So, there’s plenty of...if you think about the world and you look at all the supply of these biogenic sources of fuels, you could see how, if we stopped using it in trucks and cars and only used it in airplanes, you could probably go to mostly SAF by 2050 or something, and I think maybe Delta or IAG has said that recently. They see a pathway to that.

It’s not going to happen overnight. It’s going to take 25 years, but you could see how that would work. So, I think we’re excited about that as an opportunity. I think we’re really excited about helping decarbonize industry through carbon capture, both use and sequestration. We are cautiously optimistic that renewable natural gas can play a role for both transportation and industry. I mean, it’s had a bit of a tough run here with some of the regulatory uncertainty, but ultimately, the uncertainty will fade away. It doesn’t need to be all tailwinds. Just the lack of clarity is probably the biggest issue.

So, those are areas where we’re actively invested and are still really positive about. Batteries, I think new, different types of battery technology is compelling, depending on the use case, and that can now...think about thermal batteries. Those are interesting ways where you can get the heat and steam out of electricity that you can’t directly get. Then, all of a sudden, you’ve got some ways to decarbonize heavy industry that hadn’t been available until recently. Those are just a flavor of some of the things that excite us. Green ammonia is interesting in certain cases.

You know, if, all of a sudden, we’ve got a company like Koloma or HyTerra has figured out that there is a reliable supply of geologic hydrogen, well, now we can take that and turn it into ammonia in the Midwest. I mean, they’re focusing their efforts now in places like Kansas. I think HyTerra just made an announcement in the last day or two that they’re starting their drilling program in Kansas, and they’re confident they’re going to find enough geologic hydrogen to use it in industry, and if I can then add that with some nitrogen, I’ve got really low carbon ammonia.

Ken Irvin:

There you go, ammonia.

John Skrinar:

There’s a lot of companies that we’re looking at ammonia for wind power through an electrolyzer, and the math just isn’t working there, but there’s other places where, all of a sudden...again, it’s not a solution today, but over the next five years, I think there’s compelling ways that you can be making low carbon hydrogen that’s competitive with gray hydrogen, and that is, I think, where we’re focused on anything is how do we compete with the legacy fuels and gases. It’s not can we depend on all kinds of subsidies and tax credits and those kinds of things, unless it’s a commercial counterparty who’s willing to take on those costs, and we’re seeing that in SAF. You’re seeing corporate buyers saying we want to reduce the emissions profile of our travel, so we’ll buy the SAF inset certificates and use that against air travel.

Ken Irvin:

That’s terrific. That gives me a sense of optimism that is awesome and refreshing to hear. So, thank you for that. We’ve been speaking with John Skrinar, a partner at Cresta Fund Management, about the path forward for investors and new alternatives to clean energy. John, it’s been a pleasure speaking with you.

John Skrinar:
 Likewise, Ken. Great to be here, and good to talk.

Ken Irvin:

You’re listening to Accelerating Energy. I’m Ken Irvin. Our executive producer is John Metaxas. Our managing editor is Karen Tucker, and our associate editor is Ann Margolis. Subscribe on Apple Podcasts or wherever you get your podcasts.

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