Here's the best energy play now: Rubenstein

David Rubenstein, The Carlyle Group Co-Founder & Managing Director.
Adam Jeffery | CNBC
David Rubenstein, The Carlyle Group Co-Founder & Managing Director.

Carlyle Group co-founder David Rubenstein believes there are new places in which to invest thanks to low oil prices.

"The single greatest new energy opportunity to invest is probably distressed debt," the co-founder of investment manager Carlyle Group said Wednesday at the World Economic Forum in Davos, Switzerland.

"The debt of companies that expanded a lot assuming that oil would be at $100 a barrel or higher, now when that's not the case, their debt isn't going to be worth 100 cents on the dollar."

The private equity pro said investors could buy such debt on the cheap and even take control of some companies.

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The opportunity comes as low oil prices are putting a "crimp" on the development of renewable energy sources, Rubenstein said.

He said that wind, solar and other clean energy technology work when oil is at $80 or $100 a barrel because they offer a cheaper alternative, especially with government subsidies.

Now, given the 50 percent drop in crude prices, "it just doesn't economically work," he said. "Renewable energy as a form of energy will go down in terms of the industry's strength and that will be an unfortunate consequence of the lower oil prices."

Rubenstein said the price of oil will likely stay low and come back over two to three years. For now, he echoed others in calling the price drop a tax cut, which should spur consumer spending in the U.S. and Europe.

Generally, Rubenstein said, the U.S. remains the best place in the world to invest. He also said he continues to like emerging markets such as China, sub-Saharan Africa and India. He also said Carlyle was investing in Japan.

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