What was Tom Steyer doing in Alberta this week? The San Francisco hedge-fund billionaire is mainly known to Canadians as Mr. No – America’s largest single political donor, he has spent a good part of his fortune opposing the Canadian petroleum industry on ecological grounds and leading the effort to stop the Keystone XL pipeline from being built. By making his first trip north of the border with a circle of Canadian environmentalists and publicists in tow, was he quietly announcing that he intends to extend his activism north of the border?
At first, when I spoke to the 56-year-old in Vancouver on Tuesday before he departed for Alberta, he was careful to say, over and over, that he has no interest in influencing Canadian political affairs the way he has in the United States, where he is spending $100-million this year, half of it from his personal fortune, to help pro-green candidates in November’s congressional and state elections.
“Canadian politics are suitably left to Canadian citizens,” he said.
But, it turns out, he very much does have a message for Canadians, and it is clearly political, if not in the partisan sense. Mr. Steyer does not want to be seen as one of the “foreign radicals” Prime Minister Stephen Harper’s ministers once claimed were meddling in Canada’s environmental movement. But given that his NextGen Climate Action political committee, one of the largest so-called SuperPACs in the United States, is devoted to portraying Alberta’s oil-sands petroleum as the greatest climate threat his country faces, he can’t avoid trying to influence Canadians in the political sphere.
“This is a global problem that calls for a global solution,” he says. “So one of the things I do hope I can learn about, and I hope happens, is that there is co-operation between Canada and the United States the way there has been in the past, where together we have managed to solve the hole-in-the-ozone problem and acid rain.”
He believes, strongly, that even the oil industry now recognizes that the climate debate is settled, that Canada has no need for an oil industry, that alternative-energy sources can be even bigger employers than petroleum, and that the market economy can make that transition happen – and he would like Canadians to recognize this, and act accordingly.
A big part of this, it turns out, is to convince Canadians that there is life beyond petroleum – that, beyond the big “no” of stopping Keystone and reducing oil-sands production levels, there is also a big “yes” of profitable post-oil enterprise.
The notion that the economy depends on petroleum revenues and jobs, he says, is a myth he’s hoping to shatter by backing clean-energy industries – including, he says, a Canadian project to extend the Ontario hydroelectric grid more efficiently into the northern United States.
“It isn’t Keystone or nothing,” he says. “It’s Keystone or a different, cleaner energy future. That message is one that hasn’t got through nearly enough, and it’s played into this false dichotomy that either we’re going to have a strong economy or we’re going to have a healthy environment. And that is a false choice that people try to use to scare citizens and voters.”
Here he has a point: Canada’s economy is far less dependent on petroleum than is often portrayed by the Prime Minister and oil-patch investors. Oil and gas make up only 8 per cent of the economy (and 40 per cent of it is not from Alberta’s oil sands); our future does not depend on oil extraction. The drama of Keystone, however bold the headlines, is not really playing on centre stage. Mr. Steyer would like to persuade Canadians that they could get by just fine without Athabasca crude.
“I don’t know how it works in Canada,” he says, “but what we’ve seen in the United States is that there are a hell of a lot more clean-energy jobs than there are fossil-fuel jobs.”
There is, to be sure, more than a little political naiveté in all this: As welcome as Mr. Steyer’s voice may be in Canadian environmental circles, it might not help their cause to have a wealthy Californian liberal suggesting that the people of Alberta ought to be happy to do away with their main source of sustenance. By conforming to their foreign-radical stereotype, Mr. Steyer could prove to be a gift to Mr. Harper’s Conservatives.
As well, he has no idea if Keystone will be approved or not – despite the hundreds of millions he has devoted to Barack Obama’s Democratic Party.
He is hopeful, based on statements the President has made on climate and energy policy, including a major speech he devoted to the subject in Georgetown last year, that the decision will go against the pipeline.
“I don’t have any information,” Mr. Steyer says. “I will say that, according to the criteria that he laid out in his Georgetown speech, he said that if ‘it leads to significantly increased carbon-dioxide emissions, I will not permit it.’ And we believe strongly that it does. So if that’s the case, we’re taking him at his word.”
Not everyone in the environmental movement is so confident. In January, the State Department released its final environmental-impact assessment, which concluded that while oil-sands petroleum is significantly more carbon-emitting than other fuel sources and poses a major climate threat, the quantity of emissions would not increase if the pipeline were built (because the oil would get to market through other means).
That report was hailed by Keystone supporters as a victory, because it seemed to invalidate Mr. Obama’s pledge that he wouldn’t approve the pipeline if it increased carbon emissions.
Mr. Steyer believes the report is simply wrong.
“I don’t accept the State Department report. I thought that report was deeply flawed in a number of respects, and I don’t accept their conclusion. So it is hard for me to use that as a baseline for analysis, honestly.”
In his view, the Keystone pipeline will put a lot more oil-sands petroleum exhaust into the atmosphere. Alberta oil, he believes, would cost significantly more to bring to market by rail or via less direct pipeline routes, enough so that, at $75 a barrel (the projected oil price over the next few years), it wouldn’t be competitive.
In other words, contrary to the reassurances offered by other factors, he believes that scuppering Keystone is worth the effort because it would effectively sink the entire Alberta oil economy.
So cutting off access to markets by stopping pipeline construction remains his key strategy – as well as trying to persuade people that alternative energy can be just as big an employer and revenue source as oil.
Keystone or not, Mr. Steyer believes that he is winning. He points to recent announcements to shareholders by Exxon and Shell that they expect their businesses to be affected by climate change.
“Both those huge, worldwide energy companies within the last two weeks came out and said the science is basically settled on this, that we need responsible policies to reduce the risk. I don’t know what planet you live on where you start saying Shell and Exxon are left-wing communists.”
Add to that a series of large-scale studies released this month that confirm the scientific consensus on the link between carbon emissions and climate change – by the United Nations, the American Association for the Advancement of Science, and the Intergovernmental Panel on Climate Change – and Mr. Steyer says the “climate debate” has ceased to be a debate at all.
“I think it’s a charade that this is a two-sided argument. You know, the dog is not barking. There is no other side. We are not hearing factual, learned responses to these studies – we are hearing deafening silence. I’m not remotely despairing. That is not the adjective or verb that I would use.”
He rages at the accusation, made recently by conservatives in the United States, that he is backing clean energy simply because he stands, as an investor in the industry, to profit from it.
“Who in their right mind leaves a job at a hedge fund in order to make money? That’s why you go to a hedge fund, for goodness sake. Why would I leave a full-time job where I’m getting lavishly compensated, in order to go work for free – in fact to spend a bunch of money – and how does that make me money? If you knew the numbers, the idea that I’m doing that is absurd and shockingly inaccurate. We want to make sure there’s no appearance of conflict of interest.”
His investments in clean technology, he says, are made by his foundation, so their profits will go to non-profit and charitable causes and conflicts of interest can be avoided.
Mr. Steyer does believe, however, that the quest for profits is the only path out of fossil-fuel dependence.
“We want to make darn sure that clean tech is profitable – but that doesn’t mean I’m doing this to try to make profits myself. Because if it isn’t profitable, we’re not going to get the kind of investments we need over the coming decades to make sure that it actually happens.”
It is his enthusiasm for hard-nosed capitalism that makes Tom Steyer such a difficult opponent for conservatives. He helped to create the Sustainable Accounting Standards Board, which provides market information on the ecological costs of business to ensure that these costs are incorporated into share prices and corporate decisions – one of several ways he hopes to use market forces to replace fossil-fuel energy with alternatives.
“I’m not an anti-capitalist,” he says. “I happen to believe the private sector is going to be the engine of this transformation. I went to Stanford business school; I was a business person and an investor for over 30 years.”
That said, he still believes the best way to cut emissions is through an act of government – the blocking of Keystone. Which is likely the other big purpose of his Alberta tour: to find the evidence he and his allies need in their bid to talk the President out of backing Keystone.
“I came up to Canada to learn a bunch of things,” he says. “But I have a big mouth. I expect to communicate what I’ve learned to people. I think it’s relevant.”