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Energy Pipeline: Colorado investors look favorably to both traditional and green energy

While 73 percent of Colorado high-net-worth investors support fracking of shale deposits to develop oil and gas resources, 86 percent of them agree that the U.S. should invest in programs to increase energy efficiency, according to Morgan Stanley’s Investor Pulse Poll.

High-net-worth investors are individuals who have investable assets exceeding $100,000.

Morgan Stanley conducted the survey in late 2014 to check in with investors after the downward shift of energy stock prices, said Bruce Hemmings, senior vice president of wealth management at The Hemmings Group at Morgan Stanley in Loveland.

“It’s a matter of best practices to check in with the investors and see if what we’re doing fits their plans,” he said.

Of the 86 percent of investors polled who support energy efficiency expansion, 75 percent support the expansion of wind farms and 71 percent support the expansion of solar farms, according to the poll.

“Coloradans seems to support energy development in all its forms,” Hemmings said.

However, investors feel split between developing traditional energy and continuing development of alternative energy forms; 43 percent favor expanding wind, solar and biomass production, 37 percent support expanding production of traditional energy and 18 percent suggest pursuing both energy types equally.

“Colorado investors want to see development of alternative energies, but are still open to traditional energies in their portfolio,” according to a news release from Morgan Stanley.

In terms of where Coloradans invest, 79 percent invest in natural gas, 67 percent invest in petroleum-based energies, 53 percent invest in solar, 46 percent invest in wind and 45 percent invest in electric vehicles.

In related news, Fight over Keystone XL project doesn’t stall pipeline boom.

“The evolving economics in green energy are still sometimes challenging,” Hemmings said. “When you’re an investor and you look at those economics it’s difficult to invest there.”

However, Hemmings said that the challenging, economics do not wholly deter investors.

Compared to the nation’s average, Colorado investors show more support of fracking — 73 percent to 53 percent nationwide — and feel less supportive of expanding solar farms and parks — 71 percent to 80 percent nationwide.

“It’s possible that the behavior and outlook are influenced by the high knowledge of energy issues (in Colorado),” Hemmings said. “Colorado investors have a long history of experience in the energy industries.”

When looking at investments, Morgan Stanley reported that 93 percent consider the amount of money returned on the investment, more than 80 percent look for a record of growth in a company, 76 percent aim to diversify their holdings in different sectors, 70 percent consider energy independence and 66 percent consider environmental impact.

While 76 percent look for diversification in their stock holdings, investors allocate 17 percent of their portfolio to the energy sector.

This reflects confidence in the energy, both traditional and alternative, but puts Coloradans at a higher risk than nationwide investors with a smaller allocated amount, Hemmings said.

Based on the Standard and Poor 500 index, a ranking of the 500 companies thought to best represent the U.S. economy, investors should allocate 8.5 percent, he said.

However, Hemmings said it is not surprising the Colorado investors would lean more heavily on the energy sectors in their portfolios due to the state’s long history and experience with the industry.

In terms of personal implementations of green energy, Morgan Stanley reported that 95 percent of investors plan to adopt one of 12 sustainable behaviors in the next three years. Of those investors, 69 percent plan to conserve water, 64 percent hope to install more energy saving light bulbs, 54 percent plan to recycle more, 45 percent replacing appliances with more energy efficient models, 38 percent plan to purchase a more fuel efficient vehicle and 20 percent hope to buy products that use less energy.

Due to high overhead costs, Hemmings said only 3 percent of investors anticipate installing solar panels in the near future.

 

This article was written by Allison Dyer Bluemel from Greeley Tribune, Colo. and was legally licensed through the NewsCred publisher network.


5 comments

  1. While some of residents of Colorado might not be the most supportive of renewable energy sources like solar power, that tide is starting to change. The economics for solar power continue to improve. The price for energy produced by a grid-tied solar panel system over its life is only 8 cents per kilowatt hour now. This is cheaper energy than what most in the country currently pay.

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