NYT has a story today about some prominent “green-tech” venture capitalists who are investing in fossil-fuel development, making them more “brown-tech.”

Defense of this muddying of the green-tech profile rests on our collective worship of the profit motive (“I’m here to make the kind of green my limited partners can spend”). But what made me laugh out loud (even as my stomach was turning) was this quote by Joseph Lacob, a managing partner at Kleiner Perkins, which is investing heavily in Terralliance, an oil and gas exploration company: “If we can improve the efficiencies of the oil and gas exploration, in some ways that’s a green message as well.”

Please, please please tell me how expansion of oil and gas development is a “green message”?

So here’s the rub: it appears that green-tech is good for marketing your venture capital business, but the investment interest is really two-fold:

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  1. Capitalize on the volatility of the current energy markets — oil and gas are going up, profits are going up so ride that while you can.
  2. Invest in the successor energy systems so you reap the really big profits when we finally switch away from fossil fuels.

In 2006, venture capitalists put $727 million into 39 alternative energy start-ups, compared with $195 million in 18 such firms for 2005, according to the National Venture Capital Association.

For investors in alternatives to oil and gas, the driving force has been the belief that whoever develops the next great energy sources will enjoy spoils that will make the gains from creating the next Amazon.com or Google seem puny in comparison.

And there is, of course, the additional benefit of helping to save the world with cleaner, renewable energy sources. Do well by doing good is the mantra.

Yet money has also flowed into start-ups built to serve the oil and gas industries. In 2006, venture capitalists put $163 million into 18 such companies, up from $56 million in 14 oil and gas ventures in 2005. This is an investment category that has ebbed and flowed and that was as high as $586 million in 1999, the height of the dot-com bubble.

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Anyone see a problem with this strategy? Anyone remember the Dr. Seuss story about the star bellied sneetches? Anyone know why the gun industry loves a good war?

By playing both sides, venture capitalists are likely to benefit from the turmoil, but they also delay change. By funding oil and gas development and green-tech, these venture capitalists are prolonging the state of flux we find ourselves in. This dual investment helps keep oil and gas profitable and diverts investment from green-tech, both of which keep us teetering between fossil and alternative energy systems at a time when we need to be resolutely moving in one direction.

It’s not as if there won’t be investment opportunities galore in green-tech. But as long as you can extract obscene profits from fossil fuel, and you are positioning yourself to profit from the transition, it is in your best interest to maintain the status quo — the environment be damned.