2023: A Foundational Year for Frontieras North America
A review of Frontieras North America’s company progress in 2023, relative to major developments in global energy markets and the geopolitical landscape.
January 26th, 2024
Written by Matthew McKean, CEO and co-founder of Frontieras North America (LinkedIn)
Sometimes, when faced with adversity, it is best to turn into the storm, lower your head, and move towards the light. As Frontieras commercializes its technology, we take a pragmatic approach and recognize that timelines can be uncertain and projects can cost more, with obstacles that are often beyond control. These challenges require a management team to have patience, and apply fortitude and grit, while staying true to its vision. For Frontieras North America, that vision is to maximize available resources, using technology to unlock intrinsic value to deliver abundant, affordable, and available energy.
In 2023, we witnessed significant geopolitical events and global shifts that have the potential for long-term consequences for the energy markets. This blog focuses on key events that shaped the energy market’s landscape and, more specifically, Frontieras North America’s path to engineering, financing and constructing the first FASForm plant.
Top Events of the 2023 Energy Market:
1. U.S. Oil Production Surge: In 2023, the United States accomplished a historic milestone by producing more oil annually than any other country in history. This marks a substantial change from 15 years ago when U.S. production hit a 62-year low, and exports were nonexistent. Jim Burkhard, VP and Head of Research for Oil Markets at S&P Global Commodity Insights, highlighted the magnitude, stating, "The U.S. is exporting oil at a level comparable to the total production of Saudi Arabia or Russia."
2. Military conflict in Ukraine: The military conflict in Ukraine has escalated, leading to severe consequences for both regional stability and global energy markets. A significant development involves the destruction of the Nord Stream pipeline, a crucial energy infrastructure connecting Russia to Europe. This act of sabotage not only disrupts the flow of natural gas but also exacerbates tensions in the geopolitical landscape and resulted in sanctions. This escalation has contributed to the disruption of global markets, affecting financial flows and energy supply chains.
3. Middle East Conflict: A war erupted in the Middle East in 2023 as Israel responded to attacks by Hamas. While the crisis is currently contained, there is concern that if the conflict spreads to Iran, it could have a significant impact on the world's oil markets.
4. ESG Movement: The Environmental, Social, Governance (ESG) movement faced headwinds throughout 2023 as the investment community uncovered financial challenges and struggled with higher interest rates and unsustainable business operations. The ESG movement is losing support and continues to be exposed as financially unsustainable and lacking the potential to meet global energy demands.
Frontieras entered 2023 with expectations of raising capital, maximizing the company's valuation with the introduction of additional revenue streams, and executing strategic relationships with industry leaders.
Frontieras charged forward with investment meetings with companies around the world, including some of the largest global financial institutions. As the year progressed, Frontieras recognized that the investment landscape for large-scale projects in the fossil fuel sector was undergoing a favorable shift, reflecting the combination of economic, environmental, and geopolitical factors outlined above. Specifically, in the second half of 2023, Frontieras recognized that the investment community had an awakening - renewable projects were falling short of expectations, were artificially supported by government subsidies and unable to deliver on the promise of replacing fossil fuels and turning a profit.
As a result, the investment community believes that a gradual transition to cleaner energy sources is a more realistic approach, allowing for the continued utilization of fossil fuels while simultaneously investing in research and development for more sustainable alternatives. This pragmatic stance aligns with our introduction of Frontieras FASForm technology to help meet global energy needs through the processing of fossil fuels.
In 2023, Frontieras made the commitment to produce Renewable Diesel to stratify the revenue stream of its first project and to de-risk the commercialization of new technology. This aligns with Frontieras' mission, elevates the plant's output and revenue streams, and has been integrated into the overall engineering roadmap of the FASForm plant.
Frontieras' efforts in 2023 revolved around procuring off-take agreements of its’ products from the Frontieras FASForm plant. Off-take agreements are similar to “purchase orders” by credit-worthy counterparties that are absolutely necessary for project finance.
In addition, Frontieras completed significant engineering progress and due-diligence of its site selection in West Virginia, assessing civil aspects and suitability, construction and permitting pathways and viability.
Looking back at 2023, Frontieras' management team realizes that the work completed represents another strong foundational block in the company's future. The work achieved in 2023 sets up 2024 as a year when Frontieras moves from design and engineering to breaking ground and building upon a solid foundation.
In the coming weeks, I will be sharing my predictions for 2024 and outline Frontieras’ objectives and goals for the coming year.
If you are interested in learning more about Frontieras, its FASForm technology or the Frontieras management team, please visit www.frontieras.com