How a company found a business in measuring leaking methane

Last of a three-part series. Click here for the first part and here for the second.

A few weeks ago, a strange-looking vehicle could be seen meandering through the natural gas wells and compressor stations in Bakersfield, Calif.

The car, a Toyota SUV outfitted with instruments by the Santa Clara, Calif., company Picarro Inc., looked a bit odd. It had a 12-foot rod attached to its front that stuck straight into the air and another smaller rod mounted on its top. As the car drove past the oil and gas fields, the front rod swept through the air. It was "sniffing" for methane, a potent greenhouse gas with a warming potential about 25 times greater than carbon dioxide.

This car, which carries Picarro's trademarked vehicle-mounted gas tracking technology, known as Picarro Surveyor, is just one example of the many instruments the company offers for use by researchers and others interested in finding and monitoring methane and other greenhouse gases.

Picarro already has a strong reputation in the research world, but its long-term goal is to make money by expanding its clientele well outside that sphere by becoming known to regulators and industry. Its big bet is that measuring greenhouse gases with a high level of accuracy will soon be necessary on a wide scale.

"We expect to be selling to the super-major energy producers and those that regulate them," Picarro CEO Michael Woelk said.

The Bakersfield outing was a demonstration held for the California Division of Oil, Gas and Geothermal Resources and the California Air Resources Board (CARB), which is evaluating the technology as a way of finding and measuring sources of methane.

"This new technology that they have developed allows you not only to identify where the leaks are but gives you an emission rate from that leak, which is very exciting," said Jorn Herner, chief of the research planning and emission mitigation branch at CARB.


While Picarro is now well-known for its high-quality instruments for use in research, it took it a while to find its focus.

Putting precision measurement in a backpack

It got its start in the mid-1990s, in the lab of Richard Zare, an analytical chemist at Stanford University. At the time, Zare was focused on improving a technology called cavity ring-down spectroscopy.

This technology sends a laser beam into a gas sample contained between highly reflecting mirrors. The light passes through the gas and bounces hundreds of thousands of times between the mirrors. Depending on what molecules are in the gas, the intensity of the light will decrease at certain wavelengths, as those wavelengths force a particular molecule to change its energy.

This means the technology can distinguish between different molecules and different isotopes of the same molecule. It is also very lightweight.

"Prior to this, the way that people attempted to measure isotope ratios was to use an instrument called a mass spectrometer. It weighs over 1,000 pounds and looks like a refrigerator," Zare said.

"Now, with this device, it's much lighter, it's portable, so you can drive it in the car, put it in a backpack," he said.

Barbara Paldus, a student in Zare's lab, got excited about commercializing the technology. But her early ideas for business uses fell flat.

First the company, which started off as Informed Diagnostics, got some federal grants to perfect the technology for detecting volatile organic compounds for use in bomb and drug sniffing as well as measuring pollutants. It was also investigating medical applications, such as monitoring the gases given off by human breath to learn more about diseases like diabetes.

But in the dot-com boom, the company switched focus, changed its name to Blue Leaf and tried to get in on the telecom industry. That business never took off.

An answer seeking the right question

So in the late 2000s, the chief technical officer, Eric Crosson, who had also collaborated with Zare at Stanford, pushed to recapitalize the company and move it into the greenhouse gas arena. As CEO Woelk recalls, the company's employees brainstormed their options.

"We said, OK, what can this technology do? It can measure breath. It can measure greenhouse gases. It can measure semiconductor capacities," Woelk said. He recalls saying, "I think there might be a real business in measuring greenhouse gases from the atmosphere."

Picarro first turned to making equipment for scientists. It did this well, said Steve Wofsy, a Harvard professor of atmospheric and environmental chemistry who serves on the company's scientific advisory board.

"They are very, very good instruments," Wofsy said. "They are very stable, and if we are speaking of CO2 or methane, they have very high signal-to-noise ratio so you can measure concentration changes that are quite small."

While Wofsy noted the instruments still require calibration, he said the usability of Picarro's instruments has brought about a "sea change" in the field of measuring important greenhouse gases.

"If they hadn't done what they did and they weren't selling these [instruments] as they are now, I don't think we would be able to put out these [greenhouse gas monitoring] networks," said Wofsy, who uses Picarro sensors to monitor CO2 and methane in Boston.

Finding gold in greenhouse gases?

Yet changing how scientists are able to measure climate-forcing gases is just the early phase of Picarro's business plan.

Woelk hopes his company can profit from what he calls "the shift from science to compliance." The company is working to penetrate the utility market, which it sees as a growth area.

In 2012, it began selling its vehicle-mounted methane sniffing technology to the California utility Pacific Gas and Electric, which will use it to detect leaks, reduce explosion risks and, ultimately, cut losses in distributing a valuable fuel.

To Woelk, that's the first step down a path he sees as revolutionizing how greenhouse gases are measured. "If we're going to place value on these molecules that contain carbon, then we need to have a mechanism of counting [them]," he said.

In the short term, betting that greenhouse gases will have value outside the scientific realm may appear to be a risky strategy. But if the company can wait long enough for carbon dioxide and other greenhouse gases to have real value, that greenhouse-gas-centric business strategy may well pay off.

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