Green Energy Enthusiasts Are Also Betting on Fossil Fuels

Silicon Valley’s technology investors have taken to the ramparts, threatening to tear down the oil and gas industries’ dominance with innovations that use ethanol, solar and wind.

A chief champion of the cause has been Kleiner Perkins Caufield & Byers, one of the marquee venture capital firms. Its principals, John Doerr in particular, have passionately advocated development of alternative energies as a way to create energy independence and clean up the carbon-saturated atmosphere.

But Kleiner has also poured millions of dollars into Terralliance, a company that makes technology to enable more efficient drilling of oil and gas.
The investment underscores a fact that is much less bragged about in the valley: For all the boasting in the region about investing in clean technologies, there have also been a smaller number of bets in companies set up to promote the development of fossil fuels — the source of many of the problems their other investments are meant to fix.

Joseph Lacob, a managing partner at Kleiner Perkins involved in the Terralliance deal, said the investment did not mar the firm’s overall commitment to eco-friendly so-called “cleantech” start-ups.

“We’ve made 14 investments in cleantech and greentech,” he said. “We’re extremely committed to that investment thesis.”

But others aren’t so sure.

Daniel Kammen, professor in the energy and resources group at the University of California at Berkeley, said such investments by Kleiner and other firms that portray themselves as green-friendly are inconsistent with their marketing message.

“They’re being hypocritical,” he said of the firms. The former vice president Al Gore, the billionaire Richard Branson and other figures with ties to Silicon Valley’s green movement “should hold these companies to a higher standard.”

Still, Mr. Kammen acknowledged that venture capital firms like Kleiner deserve much credit for pushing an alternative-energy agenda. And their simultaneous interest in technologies oriented toward fossil fuels is understandable and defensible, given the huge market opportunity, he noted.

New York Times, registration required.