Speaking at the Alternative Energy Investment Symposium in New York Tuesday morning, Leslie Haines, editor in chief of Oil and Gas Investor, looked at how politics and private capital firms are affecting the cleantech and traditional oil and gas industries.
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Although the amount of money going into alternative energy projects is increasing, Haines thinks there may be a great deal of pent up capital on the sidelines waiting for what happens within the political arena. "Investors are leery about investing in anything that relies on government subsidies because governments change their mind. There’s been a real slowdown in investments as investors wait to see if there will be a bill on alternative energy out of Congress this year, if not next year, is anyone’s guess due to the presidential election."
Haines noted that venture capitalists have invested $3.6 billion in emerging green technologies this year. But the amount of private equity still going into energy is huge, as buyout firms are willing to back experienced teams with $500 million to $1 billion in startup capital for companies in the oil and gas sector. She also noted that institutional investors — university endowments and pension funds — still consider oil and gas an alternative asset class, although it's been around for 100 years and is integral to the economy. "What are they going to think about green tech, which is an alternative within an alternative?" she asked.
Private investors will be seeing more competition from corporations, as she noted that traditional energy companies are starting to go into alternative energy. "All the majors are doing something in alternative energy. Managers and executives are also leaving traditional oil and gas to go into green ventures. It’s a good time to get involved because the two worlds are starting to converge." — George White
