Just as private equity houses are found to be ramping up their interest in the oil and gas sector, they are at the same time backing out of green energy and cleantech, worried about the possibility of a green bubble forming.
A survey by Rothstein Kass showed 24 per cent of more than 200 PE fund managers highlighting the green sector as the most likely to produce the next investment bubble.
Controversy about importing fuel from Canada’s vast oil sands has been swirling for some time. It is an issue environmentalists seized on with great hope when President Barack Obama came into office, given his pledges to work to reduce the country’s carbon footprint and the fact that oil from tar sands, as environmentalists refer to it, has a higher carbon intensity than that from traditional crude.
But the weakness in the US economy, high unemployment and rising petrol prices have combined to give the oil industry the edge. Indeed, even back in 2009, the Obama administration approved a pipeline to carry oil-sands fuel from Canada into the US, saying its action was designed to send “a positive economic signal in a difficult economic period”. The Keystone pipeline also was approved.