John Machacek, Chief Innovation Officer for the Greater Fargo Moorhead Economic Development Corporation, has worked with countless startups throughout our community over the years. He knows their ups, and their downs, but most of all, he knows the questions to ask them. Here are John Machacek’s 10 questions for Troy and Emmy Vareberg, co-founders of Blue Comply.
1. First of all, congratulations on the recent win in the regional Pegasus Tech Ventures Startup World Cup pitch competition. I hope the Grand Finale pitch event in San Francisco goes well and is fruitful. To start with this interview, will you please tell me your Blue Comply elevator pitch?
Blue Comply is committed to offering advanced technology solutions that help industries detect and mitigate methane emissions. Our patented device integrates multiple sensors with intelligent data reporting to provide real-time insights on equipment health, particularly thief hatches—one of the key sources of methane leaks. By enabling faster detection, we help reduce environmental impact and minimize operational risks.
2. To what extent are methane leaks an issue at oil wells?
Fugitive methane emissions are a critical issue in the oil and gas industry, leading to both financial losses and environmental challenges. Oil producers lose 1.5% of the methane they produce on average from fugitive emissions, costing them billions of dollars each year in lost products. The high potency of methane as a greenhouse gas and its significant effect on the environment have led to new government regulatory fines, placing greater pressure on producers to mitigate emissions. Thief hatches, located on top of storage tanks, are one of the primary sources of methane leaks on oil sites.
We provide precise, real-time detection of fugitive methane from thief hatches, enabling oil and gas producers to respond quickly with corrective measures and achieve their emission-reduction goals. By reducing emissions, our technology helps them minimize loss of sellable products, remain compliant with industry regulations, avoid costly fines, and reduce the US’s environmental impact.
3. For someone who doesn’t know much about the oil and gas industry, what do you mean by a thief hatch?
A thief hatch is an access door on the top of an oil storage tank which allows for typical oil site procedures, such as inspection and sampling. Through normal operations, these hatches can be inadvertently left open, or unlatched, which results in unintentional emissions. Internal components of thief hatches also experience wear and tear, leading to additional sources of leaks. Our third-party-tested, patented device attaches to the top of the thief hatch and monitors methane levels and hatch position to identify potential leaks. We send this data wirelessly, either to a cloud-based dashboard via cellular communications, or directly to a producer’s system via LoRa, to intelligently provide insights and alerts, enabling producers to quickly and confidently address emissions from thief hatches.
4. How did you go about finding this problem and working on a solution?
Through our work in the oil and gas industry over the past 15 years via our consulting engineering firm, Vareberg Engineering, we learned about the manual process that producers were currently using to find, document, and repair methane leaks on all their well sites. It was evident there was a need for a more efficient, less costly solution. Our experience in engineering services at Vareberg Engineering meant that we were well-versed in addressing problems using existing technology, but this was different. We couldn’t find anything on the market that sufficiently addressed the issue, so we decided to develop our own, novel solution.
5. After being a service company for so many years, I imagine both the learning curve and the resources needed are quite a leap from that. How has this new direction gone so far?
It’s been such an amazing experience to learn the ins and outs of a completely different business model. We have been fully immersed in R&D for the past couple of years and just completed a three-month blind study to determine the effectiveness of our initial design. These are things we definitely didn’t experience with our consulting business, but we’ve embraced each challenge as a new opportunity for Blue Comply.
6. These differences would also require the need for different types of talent needs. How have you gone about finding people who may have the particular product and tech skills?
To this point, we have been fortunate enough to add individuals to our team that we’ve worked with in the past. It’s been great building a group of excited, talented individuals who have filled Blue Comply’s needs perfectly and who care about our mission.
7. So similar to finding the right talent, how about any needs to find partners to source and manufacture components for the product?
We both grew up in North Dakota, graduated from NDSU and returned to the area over 27 years ago. Because of the time spent here, we have a large network of connections and relationships to draw upon. Whether it is the initial design, supply chain, manufacturing, or customer acquisition, we have been able to approach our peers for invaluable assistance and partnerships. We also have to admit there have been a few instances of “in the right place at the right time.” Overall, the support from our network is a testament to the close-knit community that Fargo and the State of North Dakota provide.
8. Definitely a theme here about the importance of your networks and relationships in helping push your business forward. With North Dakota’s robust oil industry, as well as its economic development and innovation resources, how has that aided the development and growth of the company?
We have been extremely fortunate to be able to work with the State of North Dakota through both the Department of Commerce and the Industrial Commission. Specifically, our work with the Industrial Commission led us to the Oil & Gas Research Program, whose matching grant program helped us get our initial device developed and patented. With that initial success, we were also able to secure a second grant, as well as a loan from the LIFT fund to further develop our product and company. There are other State programs out there such as the Seed Capital Investment Tax Credit that we may be able to leverage as we continue moving forward.
9. If you could go back in time to Emmy and Troy from several years ago, what hindsight advice would you give yourself?
Emmy: With Vareberg Engineering, we got to build a business together and maintain a work-life balance. This allowed us to be active in our kids’ lives while they were in school. Once we were empty nesters, it took a while to shift from the routine that we knew to really diving into this idea of solving a huge, important problem. If we could sit down with ourselves five years ago, we’d probably say something that sounds like a Nike ad: “Just do it and trust in yourselves.”
Troy: This has definitely been a unique experience for us, and it has come with hurdles we haven’t seen before, but we stay motivated by the idea that we can make a significant difference. Like Emmy said, telling our past selves to just jump in together and meet the challenges as they come would have eased some of the early hesitation.
10. Lastly, what can we do as a community to help you and Blue Comply succeed?
Methane emissions, whether you view them from an environmental or a financial perspective, are a time-sensitive issue. We’ve been fortunate to receive funding from grant programs within the state to help build and prove our devices, but getting them on oil sites is critical. We are looking to expand our team, develop partnerships, and raise additional seed capital to bring the best product we can to producers. We welcome any level of conversation and support, but these are particular needs we would love help from the community in addressing.
About John
John Machacek has been helping local startups with the Greater Fargo Moorhead Economic Development Corporation since prior to his position with the GFMEDC. Before joining the team, Machacek was the VP of Finance & Operations at United Way of Cass-Clay and a business banker at U.S. Bank.
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