Top anti-Keystone activist could benefit from blocking pipeline

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Michael Bastasch DCNF Managing Editor
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San Francisco billionaire Tom Steyer has spent millions on environmental causes, including efforts to stop construction on the Keystone XL pipeline.

But his hedge fund Farallon Capital Management has extensive holdings in fossil fuel companies — including investments that could benefit from the blocking of the Keystone pipeline.

Steyer emerged as a leading opponent of the pipeline, calling global warming the “defining issue of our generation.”

“I think the biggest thing that we need to understand is that we need a different way of thinking about energy, and honestly, this pipeline is an example of the wrong way to think about energy,” Steyer told the Globe and Mail.

The Globe and Mail reports: “Farallon’s holdings, as of its last Securities and Exchange Commission filing, include Kinder Morgan, which is pushing to expand a pipeline from Alberta to Vancouver; Nexen, one of Calgary’s largest energy companies; and Potash Corp., the Saskatchewan mining giant. Farallon owns stakes in CB&I, a leading pipeline and oil platform manufacturer, and Union Pacific, one of many railroads moving more and more oil with existing pipelines full. Farallon also still holds stock in BP.”

According to SEC filings for the first quarter of 2013, Farallon has invested more than $300 million in companies that develop onshore and offshore U.S. assets and pipelines, including Halcon Resources, Kinder Morgan and Plains Exploration. Farallon also holds about $33.8 million in Dryships, Inc. which owns and operates 10 offshore deepwater drilling units.

Last year, Steyer stepped down after 25 years at the firm Farallon Capital Management, which he co-founded in 1987. However, Steyer reportedly left a large amount of his capital under Farallon’s management.

Furthermore, the Washington Spectator reports that Securities and Exchange Commission filings show that Farallon owned $440 million worth of stock in 10 oil and gas companies while Steyer was senior managing partner at the firm.

“Among Farallon’s largest fossil-fuel holdings as of last year were a $211 million stake in Nexen Inc. and $117 million in shares of Kinder Morgan, Inc.,” the Spectator reported.

Canada Business reported that the U.S.-based pipeline company Kinder Morgan approved a $5 billion expansion of its Trans-Mountain pipeline from Edmonton to the Pacific coast, which is competing with the Keystone pipeline to move tar sands oil out of Canada.

Canada Business also noted that Canadian pipeline companies, like TransCanada, could lose out to American rivals, like Kinder Morgan, with a headstart in expanding pipelines due to delays in approving Keystone.

After Steyer left the firm last year, he wanted Farallon to “green” his investments. Yet in a press conference held on Thursday, Steyer told reporters that he was sympathetic to businesses who must look out for their bottom line.

“They are advocates for their bottom line, and that’s fine, but don’t ever confuse that with the interests of the American people,” Steyer told E&E News. “So, it isn’t personal. I completely accept that. I also take everything that the CEO of a company says about policy related to their company with a gigantic grain of salt and an appropriate grain of salt.”

“The problem isn’t that he ran a hedge fund that made a lot of money in oil and gas and now is spending it to stop the Keystone Pipeline,” said Myron Ebell, director of global warming and international environmental policy at the Competitive Enterprise Institute. “The problem is that he’s another wealthy American who is undermining the basis of our prosperity. The billionaires will survive the consequences of the policies they advocate and many will prosper as crony capitalists who can get special treatment in Washington. But middle class and poor Americans will suffer from Steyer’s anti-fossil fuel agenda.”

Steyer has been a major Democratic donor, giving $1.1 million to Democratic candidates since 1990, according to the Center for Responsive Politics. He even hosted President Obama himself in March at his home in San Francisco.

The former hedge fund manager also played a role in Rep. Ed Markey beating fellow Rep. Stephen Lynch for the Massachusetts Democratic senatorial nomination. Steyer’s super PAC the NextGen Committee hammered Lynch for initially supporting the Keystone pipeline before he voted against it.

“It has been my belief all along that your administration was not going to approve the Keystone Pipeline because it simply made no sense on the policy merits to allow a pipeline that would enable massive greenhouse emissions, do almost nothing for our economy and slow our own move to research- based advanced energy independence that will generate hundreds of thousands of American jobs,” Steyer wrote in an open letter to President Obama, promising that his super PAC is going to take action starting June 20.

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