When University President Mary Sue Coleman announced an array of University sustainability initiatives , the cost of the programs amounted to a $14 million investment.

However, the University also committed $60 million to the energy sector of its long-term portfolio last June, composed entirely of companies associated with oil.

About half of the long term portfolio is composed of marketable securities, including cash and equities, while the other half is made up of alternative assets, which is divided into four different sectors — venture capital, private equity, real estate and energy.

Returns to the University’s endowment help contribute to sustainability efforts among other things, and were worth $7.8 billion last June. Of that $7.8 billion, $814.8 million was invested in the energy sector.

In an investments report distributed to the University’s Board of Regents, all 15 of the companies — including Merit Energy Company, Natural Gas Partners, Encap Energy and Yorktown Energy Partners — are in the energy sector and related to the oil industry. While the investment report does not specifically say that all of the companies invested in by the University are associated with oil, the individual companies listed in the report all support, finance or invest in oil companies by, among other things, acquiring property with producing reserves, investing in drilling and technology or investing equity in oil companies.

At 10 percent, most of the endowment invested in energy and subsequently, oil companies, is lower than the other investment sectors but it had a large return for the endowment last year at 30 percent, or about $244.4 million — far more than the $14 million sustainability investment.

“Oil prices ended the year approximately 30 percent higher than at the beginning and natural gas prices remained relatively flat,” the University’s investment report reads. “The increase in oil prices positively impacted the valuations of the reserves held by our reserve acquisition managers and the energy private equity managers in our portfolio continued to take advantage of a strong market to sell portfolio companies.”

Despite increasing oil prices that contribute to the positive endowment return, the University invested nearly $3 million, accompanied by a $720,000 grant from the Department of Energy, to purchase seven hybrid buses. The University also spent $700,000, in addition to a $60,000 from another DOE grant to purchase hybrid sedans for the University’s fleet.

Fitzgerald said the University prefers to not comment about detailed investing choices like the number of oil companies invested in.

“We specifically as a University take an approach of not talking in detail about our investments because investments are something that people are constantly looking at to try to get hints,” Fitzgerald said.

Universities investing portions of their endowment in energy is not uncommon. The University of Texas, a school long regarded for its connection to oil, has 6 percent of its endowment invested in energy related assets, according to Bruce Zimmerman, University of Texas Investment Management Company president. Ohio State University has 8 percent of its endowment invested in energy assets as well, according to OSU spokesman Jim Lynch.

LSA junior Maggie Oliver, chair of the environmental issues commission in Central Student Government, has been involved with sustainability initiatives on campus, most prominently in the push to eliminate the sale of plastic water bottles on campus.

Oliver said that while she wishes the University would move more quickly in developing sustainable efforts, she understands paying for them with funds that receive contributions from energy investments. Oliver herself received a scholarship from Shell to attend Camp Davis, a University operated teaching and research center located near Jackson, Wyoming, where she studied geology.

“I do understand it for now,” Oliver said. “Yes, we need the world, we need the environment but the society we live (in), it does run on money, so there is that aspect of it too … I do know that we have to meet in the middle at some point and that’s the only way that real changes and sustainable changes will take place.”

Oliver added that she hopes the University aims to become more involved with alternative energy.

“The environment is always kind of pushed aside but it should be a priority,” Oliver said. “Everything does revolve around the environment and we need to start caring about it and (making) it more important because it is becoming more and more important to people.”

While the amount invested in sustainability efforts is less than the return from the energy sector, the University is making efforts to add variety to the energy sector. At last month’s regents meeting, the board approved a $25 million investment in RK Mine Finance, a company associated with financing ore companies.

“The natural resources focus of this fund provides further diversification to our energy portfolio which is concentrated in the oil and gas industry,” Timothy Slottow, executive vice president and chief financial officer, wrote in a communication to the regents.

Coleman said she thinks the money spent on sustainability initiatives is well spent.

“It was one of those investments that there’ll be a big return,” she said.

According to University spokesman Rick Fitzgerald, depending on the specifics of the project, money for sustainability projects comes from University funds, including the general fund, as well as from federal grants and partnerships with corporations like DTE Energy.

“One time projects, where it’s going to take an investment now, not an ongoing operational cost, will look for other resources,” Fitzgerald said. “Often that comes from investment proceeds, some of those that aren’t restricted for specific purposes.”

Of the $14 million committed to the sustainability initiatives, the University contributed the largest amount to the Planet Blue program with a $10 million investment.

The University’s increase in sustainability initiatives was spurred from student feedback and the benefits it will provide for both the University and the planet, Coleman said in an interview with The Michigan Daily.

“In some sense we were responding to interests and requests from students which I always love to do if we can, number one, and I think it’s really important,” Coleman said. “In the long run, many of the things that the students suggested and that we agreed to invest in will save money for the University.”

While the University funds many sustainable efforts, the proposed solar panel field that Coleman announced to be built on North Campus would be paid for entirely by DTE. The contract between the University and DTE has not been finalized, so no cost estimate for the project or proposed construction start date was available, DTE spokesman Scott Simons said.

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