Advertisement

U.S. billionaire joins fight against Keystone XL pipeline

Anyone who's followed the heated debate over TransCanada Corp.'s Keystone XL project in the United States knows it's about more than just a ribbon of oil pipeline between Canada and the refineries strung along the Gulf Coast.

Opponents of the $5-billion project to ship northern Alberta bitumen crude from the Canadian border 1,900 kilometres to Steele City, Neb., and eventually to a terminus in Texas, see defeating it as a pivotal battle in their war on climate change.

Environmentalists and the Nebraska government forced TransCanada to alter the line's route to bypass a sensitive watershed but opposition was never about just that. By quashing the project, they hope to curtail oil sands development in Alberta, demonized as a carbon-spewing climate killer.

That's how Keystone became a hot political issue in the upcoming special election to fill new Secretary of State John Kerry's Senate seat in Massachusetts, hundreds of kilometres away from the proposed pipeline route.

[ Related: Canada-U.S. ties would suffer from Keystone rejection: Redford ]

And that's why a California hedge-fund billionaire is throwing his considerable financial resources into strong-arming a Democrat candidate into renouncing his support for Keystone.

It's a window into the sometimes byzantine world of U.S. politics.

San Franciscan Tom Steyer, who until last fall ran Farallon Capital Management, is an ardent proponent of combating climate change. His spokesman, Chris Lehane, told the Globe and Mail that Steyer believes Keystone "has become the defining issue in the climate-change fight of our times."

Steyer has issued an ultimatum to Congressman Steve Lynch, vying to be the Democrat candidate for Kerry's seat, that unless Lynch recants his backing for Keystone by this Friday, he'll throw his support and chequebook behind rival candidate Edward Markey, who is also a Massachusetts congressman but opposes Keystone.

"He has plenty of resources and plays to win," Lehane said of his boss, who's worth an estimated $1.3 billion.

“It’s like something out of a James Bond film: a billionaire giving an ultimatum,” said Lynch spokesman Conor Yunits.

State law limits how much outside money can be used in political races and both candidates signed a pledge promising not to use advertising funded by third-party political action committees.

The Globe also noted Markey is already the frontrunner for the April 30 Democratic primary. The special election to replace Kerry, himself an staunch environmentalist, is slated for June 25.

But the move is part of a larger effort to pressure President Barak Obama to reject the pipeline application later this year despite a State Department report that concluded there were no major impediments to its approval.

Obama's second inauguration address included a promise to fight climate change and elements in his party now expect him to deliver.

Keystone's proponents, including Lynch, tout the project as a major job creator and a component of ensuring energy security for the United States. But the opposition claims Keystone's economic benefits have been overblown and that the oil headed for the Gulf Coast is destined for export.

The San Francisco Chronicle noted Steyer has a track record for successfully backing environmental initiatives. He spent $35 million last year to support the passing of California's Proposition 39. It closed a tax loophole for multi-state businesses, which Steyer said would free up money for green energy projects.

[ Related: Prentice says Keystone XL pipeline in U.S. national interest, urgest approval ]

Steyer's involvement highlights the rift within the Democratic Party over Keystone. As the Globe pointed out, House Minority Leader Nancy Pelosi, has doubted Canadian claims that oil sands crude is destined for domestic consumption.

And Reuters reported last week that powerful Democrat Senator Max Baucus of Montana is co-sponsoring a bipartisan bill that would give Congress the power to determine Keystone's fate, allowing legislators to override any Obama veto of the project.