OZ MAGAZINE 2022 Top 25 Influencers issue 2.2 - Page 4
4 OPPORTUNITY ZONE MAGAZINE | ISSUE 2 • VOLUME 2
ENERGY INVESTMENTS IN RURAL OPPORTUNITY ZONES
By Christopher Cook
Learn how rural opportunity zones will play a key role in energy transition by using wind , solar and traditional sources in a Qualified Opportunity Zone Business . Underinvestment in traditional energy is creating unintended environmental damage while at the same time providing investors with best-in-class tax advantaged returns .
LOCATION IS NOT A FACTOR IN PROFITABILITY
While some may view investments in low-income areas such as Opportunity Zones as unattractive , the profitability of oil and gas development in opportunity zones is completely uncorrelated and unaffected by the low incomes prevalent in opportunity zones . The profitability of energy-based OZ investments does not depend on the economic health of the OZ as demand for energy is inelastic and exists without regard to its source . Many rural opportunity zones overlay some of the most prolific and growing oil and gas plays in the United States . Many of these OZs are larger than entire states .
INFLATION AND TAX HEDGE
Forty percent of the U . S . dollars ever created have been printed in the last 12 months . This massive one year increase in the U . S . dollar supply has implications for asset prices and inflation . Commodities , especially oil and gas , typically increase or maintain their value with respect to other assets classes in inflationary environments .