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Making money a renewable resource

How Peter Liu, a former oil industry engineer, stopped designing petrochemical plants and started the first green bank in U.S. David Bank.

Without a real marketing push, New Resource already has more than 1,000 depositors, including Ode. We believe that we are evolving from what was yesterday a social movement into a market opportunity, Liu told me in the banks only branch, a LEED certified green office in San Franciscos South of Market neighborhood. Thats what we are engaged in a market expansion exercise.

Peter Lius green education began at an oil company. He emigrated to the U.S. with his family from Taiwan when he was 12, settling in South Los Angeles. His father opened an electronics-supply store, where his son worked after school. Liu attended the University of California at Berkeley, majoring in chemical engineering, and went to work for Chevron oil company. I was very practical minded and put personal economics first, he says. I took the biggest offer at the biggest company.

As a process engineer at Chevrons petrochemical plants, Liu helped design sites that met Californias stricter environmental regulations, as well as lower-cost facilities that satisfied looser rules in Louisiana, Texas and other countries. There are a lot of good people, great people, at Chevron, but external forces are really needed for advances to be made, Liu says.

So Liu switched sides, joining Californias Air Resources Board and helped put into practice the states Clean Air Act. One object lesson: Executives at Chevron and other companies, who complained about proposed rules for clean gasoline, changed their tunes once the regulation was implemented. Ads trumpeted their products abilities to keep fuel lines clean and help cars run better. It became a marketing advantage, not a requirement, Liu says.

That experience led to a masters degree in public policy at Princeton University, and eventually into the banking world at Chase Manhattan Bank and Credit Suisse First Boston. The direct impetus for New Resource Bank came in 2004, when Liu, along with software entrepreneur Bob Epstein and several others, was asked by Californias treasurer at the time, Phil Angelides, to help develop a green strategy for the states two huge public pension funds, an initiative dubbed The Green Wave. Eventually, the California Public Employees Retirement System (CalPERS) and the California State Teachers Retirement System (CalSTRS) agreed to invest $1 billion in established companies that met environmental standards, and another $500 million in venture capital and private equity investments in clean technologies.

Liu says many of the entrepreneurs he met told him, Thats all great, but the capital chain isnt just about private equity. The real need for money is on the credit side. In other words, in banking.

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