Brillouin Energy – Is Cold Fusion or LENR Possible?

In a recent article we touched on nuclear fusion and the development of the tokamak (pronounced toke-a-mack) fusion reactor that needs to achieve temperatures of 100 million degrees in order to do its thang and give us an abundant supply of cheap, clean energy that we can use to spread some freedom around. The situation with tokamaks is kind of like this.

The Tokamak Situation

There’s a huge tokamak called the ITER that many countries are working on which costs tons of dollars and then there are startups which claim they can be nimble by avoiding all the bureaucracy and everyone’s guesstimating they’ll crack this nut collectively around 2025-2035. There are already more than 200 tokamaks around the world sucking up energy and now they just need to give some back. Here are just a few:

Updating everyone on fusion technology is a pretty easy task it seems. You just go find the latest press releases which talk about “milestones”, you move the target date forward by one year, and then you rinse and repeat every 365 days. That’s certainly what it has seemed like, and this often makes people start to become suspicious. Just maybe someone already nailed fusion but those big bad energy companies are suppressing it. While we don’t shy away from conspiracy theories that make for a good story, as investors we often hear those sorts of spiels from companies like Scuderi that provide some very compelling “evidence” that they’ve created a replacement for the combustion motor when in fact they keep promising and promising and never deliver a thing. The whole thing starts to look and feel like a ponzi scheme and the people who fell for it don’t want to admit they’re wrong so they become the company’s biggest supporters.

Brillouin Energy – Is Cold Fusion or LENR Possible?

What is Cold Fusion or LENR?

In researching our last article on fusion, we came across something quite interesting called LENR or Low Energy Nuclear Reactions. Otherwise known as “cold fusion”, this is the idea that you actually don’t need to achieve those high temperatures to generate “net energy” from nuclear fusion. The idea was first floated back in the 1920s, and then in 1989, scientists at the University of Utah claimed a breakthrough experiment that “proved” that the technology was feasible. Since then, LENR hasn’t been commercialized yet which has led to a great deal of controversy around the topic.

On one side you have the critics who believe it’s all a big hoax and then the other side, you have a whole slew of advocates who believe that it’s all a big conspiracy theory and the powers that be are keeping this technology from being developed. Using common sense, investors would take a position that if someone can prove that net energy actually works, there would be no shortage of people lining up to fund it.

In a nutshell, that’s the story of “cold fusion” or LENR. It seems like we can take the same approach with “hot fusion” which is to update the topic about once a year and be done with it. In this article though, we’re going to take a look at one LENR company that’s trying to raise money – Brillouin Energy.

Who is Brillouin Energy?

While getting ready to research our article, we popped onto Youtube and opened up the first interview we came across with the CEO of Brillouin Energy which was back in May of 2016. At one occasion during the interview, the interviewer makes the following statement:

As you were saying in the last segment, some water about the size of a pencil combined with your device would power your home’s energy needs for about 10-15 years, that’s an amazing and transformative technology, but it’s difficult for you to get this out into the market place because Wall Street has some invested interests in the invested energy infrastructure.

We’re not liking that setup statement very much because it implies that something other than raw technological feasibility is keeping cold fusion from being commercialized. Surprisingly, the CEO takes the bait and says:

Absolutely, when we took it to Wall Street, they looked at the upside potential of this kind of technology and said it’s worth trillions, you’re only trying to raise 15-20 million dollars, it makes no sense, we can’t do that.

Firstly, if you showed that idea to any VC worth their beans, they would ask you to prove the concept. If you could prove the concept, they would invest the “small” sum you’re asking for. What they wouldn’t do is tell you that your idea makes no sense because they’re all part of some big conspiracy. You do your company no favors when you start towing this line. With that said, let’s take a quick look at the history of Brillouin Energy.

Founded in 2009, Berkeley California startup Brillouin Energy had taken in an undisclosed amount of funding before announcing their “Series B” of $7 million about 4 months ago which implies they had a prior Series A or seed funding round (no record of amounts found). The individual who led the Series B goes by the name of Jim Farrell and is Managing Director of a firm called “Beyond Carbon Energy”, an entity we could find little information about in the public domain.

So after raising their Series B, they now have decided that they need a Series C to the tune of $15 million. It seems odd that they couldn’t just ball the whole thing up into a single funding round, but maybe they felt that the need to show they raised money from “Beyond Carbon Energy” to lend some legitimacy to their request for more funding. We’re just not sure about that, but this is a good segue into our next topic.

The Anthropocene Institute

What spurred our initial investigation into Brillouin was an email from the folks over at the Anthropocene Institute who published a very comprehensive 79-page report on global LENR activity. Some of the findings were that at the beginning of 2017, 114 entities were engaged in LENR research and development across the globe with 45 in the U.S. alone. More than $250 million has been raised in the past 5 years to support such research, and “investment in LENR Makers is expected to double to $500 million by 2020“. If you think that’s optimistic, what about this survey they conducted with a number of LENR Makers:

If we go back to looking at the timelines for “hot fusion” and the fact that these companies have been working on this for decades, we find it hard to believe that suddenly we’re on the cusp of energy greatness. Perhaps that optimism is needed though in order to get funding directed towards LENR. We had quite a few email exchanges with one of the two authors of the report, Grant Draper, who offered up lots of interviews for us. That made sense when he told us that he works for a PR firm called CapgeminiX:

Regular readers will know how we feel about PR firms, but in this case Mr. Draper was very helpful and seemed genuine about trying to get more exposure for LENR. Can you run a PR firm and then be purely objective when compiling a research report that discusses a controversial technology being used by one of your clients? Of course you can, but the relationships here need to be pointed out.

The catalyst for Brillouin to raise a Series C is a 19-page report published by SRI International (a very notable research firm) back in December of 2016 which is said to contain some positive findings.

Given that SRI International has been testing Brillouin’s technology for the past 5 years, we would hope that something positive comes out of it. Whether or not these positive findings merit an investment (preferably by an institution with a reputation) remains to be seen.

Conclusions on Cold Fusion

As investors, we’re very skeptical about companies that hint about conspiracy theories preventing them from accomplishing their goals as opposed to some sinister plan. We like to use logic that goes something like this.

If according to Anthropocene, LENR makers have been demonstrating net energy for decades now on three continents, we’re going to assume that Brillouin is able to demonstrate net energy in a controlled experiment conducted by a third party of a venture capital investor’s choosing (pretty much a requirement to raise funding guys). This will also serve to validate the SRI findings as well. If they are not willing to do that, then that either means they cannot or they are not serious enough about pursuing commercialization.

Tech stocks are volatile investments during the best of times. Here at Nanalyze, we complement our tech holdings with a dividend growth strategy that performs extremely well during recessions. Find out which 30 dividend growth stocks we're holding in the Quantigence report freely available to Nanalyze subscribers.

Do you like investing in the planet?

Sign up to Nanalyze Weekly