The Magazine

Steyer’s War on Carbon

Buying a Detroit Senate candidate.

May 19, 2014, Vol. 19, No. 34 • By HENRY PAYNE
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Detroit
Countering the free-market political activism of the Koch brothers, green billionaire Thomas Steyer has pledged to spend $100 million in 2014 to elect an anti-carbon posse to Congress. Steyer’s litmus test is opposition to the import of Canadian crude oil through the Keystone pipeline—an issue on which the former San Francisco hedge-fund manager won a victory this spring when the Obama administration further delayed the pipeline’s construction after six years of study. 

 ... endanger the beauty of this?

... endanger the beauty of this?

henry payne

But the impact of Steyer’s campaign extends well beyond a single pipeline. His War on Carbon is a war on blue-collar jobs in cities like Detroit, where Steyer is bankrolling Senate candidate Gary Peters. The Motown battleground is a microcosm of the Californian’s larger threat to the U.S. energy sector and the communities it supports. All the players are present here: Canadian oil, Steyer money, green allies, an activist media, a politically financed Democratic candidate .  .  . even Koch Industries.

And in Detroit as with Keystone, the greens have been winning.

Peters is a Democratic congressman who is something of a political chameleon. A former Merrill Lynch financial adviser who once leaned right as a pro-Bush-tax-cut representative of wealthy, politically purple Oakland County north of Detroit, Peters was redistricted into solidly blue, liberal Detroit in 2012 and has transformed himself into an anti-tax-cut, leftist representative of Big Labor and Big Green. The three-term congressman was the only prominent Michigan politician to march with the Occupy Detroit movement in 2012.

Peters is on Steyer’s radar as a fierce opponent of Canadian oil sands who is running to maintain the Democratic party’s hold on retiring senator Carl Levin’s seat. Last year, Peters successfully led the charge against the storage of pet coke—short for petroleum coke, a coal-like carbon byproduct of oil sands refining—in Detroit.

“One of my main concerns with the Keystone pipeline is that we will be seeing piles of pet-coke in a lot of other places in the United States, because it is a main byproduct of refining Canadian oil,” Peters told London’s Guardian last June. “What we are seeing in Detroit now will be dwarfed by more oil coming through here with Keystone. This is just a glimpse of that future reality.”

Peters’s opposition made him a darling of green activists and their media allies, from the Detroit Free Press to the New York Times. The resulting wave of bad press ultimately forced Koch Industries, which owns the pet coke, to send its business to neighboring Toledo, Ohio. 

As night follows day, Peters’s campaign won him an audience with Tom Steyer.

In February, aspiring-senator Peters accompanied Al Gore, Senate majority leader Harry Reid, and six other Democratic senators to Steyer’s palatial residence overlooking the Pacific Ocean. The senators had all opposed Keystone despite its broad bipartisan support among their colleagues; Peters had opposed similar legislation passed by the House but blocked by Reid in the Senate.

The quid pro quo for Steyer’s money? “If we’re collectively going to put $100 million into this cycle, how much will go into key races depends on Keystone,” said top Steyer political hand Chris Lehane later. 

As an appetizer, Peters and the Steyer Seven were rewarded with a $400,000 contribution to the Senate Majority PAC. Since then, Senate Majority has spent nearly $1 million in Michigan attacking Peters’s Senate opponent, Republican Terri Lynn Land. Another Steyer-funded group, American Sustainable Business Council Action Fund, has begun running pro-Peters ads in western Michigan. 

In April, President Obama, who made his own pilgrimage to Steyer’s home a year ago, punted a decision on Keystone’s permitting until after the 2014 elections. “This is rotten eggs for TransCanada and good news on Good Friday for those who oppose Keystone,” Steyer cheered.

In truth, the war on Canadian oil sands is rotten eggs for America’s working men and women. 

“Congressman Peters has sold out the workers of Michigan to a liberal California billionaire,” says a spokesperson for Land. “Keystone means more jobs, lower gas prices, and greater American energy independ-ence, but to Gary Peters, opposing it means a political meal ticket.”

The $2.2 billion expansion of Marathon Oil’s Detroit refinery in 2012 to refine Canadian crude for the U.S. market was a boon not just to investment-starved Detroit—but also to businessmen like Noel and John Frye, who run Detroit Bulk Storage, a small, family-owned commodities storage business in Metro Detroit.

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