Calif. billionaire might be the next big name in U.S. energy politics
Steyer, 55, is a self-made mogul who made a bundle as a hedge fund manager. He’s also a philanthropist, environmentalist and father of four who says the country needs a clean energy revolution. He’s spent part of his wealth working toward that aim.
Last year, Steyer bankrolled a successful California ballot measure that will spend as much as $2.75 billion on energy efficiency. Two years earlier, he led the fight to defeat a proposition that would have squashed the Golden State’s groundbreaking climate law. He and his wife, Kat Taylor, have given a combined $65 million to fund schools focused on sustainable energy at Stanford and Yale universities.
He just stepped down from the investment firm he founded in order to devote more time to his pet policies. The effects are likely to be sizable, several predicted.
“Tom is very well situated to have a huge impact in any venue he chooses because he understands the various elements of these issues,” said Daniel Weiss, senior fellow and director of climate strategy at Center for American Progress, a liberal think tank. “He understands the technical element. He understands the finance element. He understands the political element.
“That will make him a force in whatever area he chooses to apply himself,” Weiss added.
In California and Washington, D.C., there’s plenty of chatter about what Steyer might do next.
He has been rumored as a possible replacement for Energy Secretary Steven Chu, if Chu steps away from that job as is widely expected.
“I’ve heard [Steyer's] name mentioned in the mix from very serious people,” Weiss said.
Neither the White House nor Steyer would comment on whether he is in the running for Department of Energy post. Clean energy supporters, however, are pleased with the idea.
A major DOE focus is evaluating emerging companies and deciding which trends to support with grants and loan guarantees, said Ethan Elkind, climate research fellow at the University of California.
“Having someone who has a business background, who understands how these finance deals get put together, could be really helpful,” Elkind said. As well, he said, the latest developments in advanced solar, battery storage and electric vehicles are “all right in his wheelhouse.”
Steyer “would bring a lot to the job” of Energy secretary, said Joe Romm, senior fellow at the Center for American Progress.
While Chu is a Nobel laureate familiar with research and development, “we could use the benefit of somebody who understands the stages after research and development” and how to move to commercialization, Romm said. “That would be quite valuable.”
U.S. Senate or state office?
Steyer is also mentioned frequently as a possible U.S. Senate candidate, should Sen. Dianne Feinstein (D-Calif.), 79, choose to retire after her current term ends in 2019. She was re-elected in November.
Others see an expanded role for Steyer in the Golden State.
“Tom is the kind of guy who you really want in politics, because even with his wealth and his willingness to use it, he’s not a my-way-or-the-highway guy; he’s a relationship guy,” California Senate President Pro Tem Darrell Steinberg (D) said after November’s election, when Steyer help pass a ballot measure. “He’s developed a very good reputation around here.”
Steyer said he hasn’t yet decided how he’ll focus his energies. It will be a learning experience, he said, after 30 years in the financial world.
“I’ve only gotten involved in political or public things when it seemed to me obvious that something was wrong and my being involved in it could be helpful,” Steyer said during an interview at Farallon Capital Management, the San Francisco firm he started. “If I thought there was something obviously wrong and no one in place to do what I think is the right thing, I could conceive of doing it. But I wouldn’t do it just to do it.”
At the same time, Steyer said, there is much work to be done on energy. A revolution is needed to avoid catastrophic climate change, he said.
“This is not incremental change,” Steyer said. “If we think incremental change is going to work for us, we’re kidding ourselves.”
If he does pursue politics, Steyer said, he will bring to it an important skill set.
“I’m a businessperson,” he said. “I’ve spent my entire life in the private sector. I’m fully cognizant of and familiar with the impact of government on business, both good and bad.
“It’s extremely relevant understanding how business thinks about government, what government can do to make business effective and produce the outcomes it wants, and when it’s just being a pain,” he added.
‘Ability to push ideas’
Steyer is worth $1.3 billion, according to Forbes. He ranks No. 347 on the magazine’s list of wealthiest Americans.
But his affluence, Steyer said, doesn’t guarantee him the policies he wants.
“Having money does give me more ability to push the ideas that I like,” Steyer said, “but it’s quite clear from the 2012 campaign and the 2010 campaign that money does not always buy anything.
“I get more access, more ability to make arguments,” he added, “but you certainly can’t buy people’s votes.”
Last year, Steyer spent $32 million as the largest donor behind California’s Proposition 39, which voters approved. It changed how multi-state businesses are taxed and will bring an expected $1.1 billion annually to California. For the first five years, half of that will go toward projects that create jobs, improve energy efficiency and expand clean power (ClimateWire, Nov. 7, 2012).
“Most wealthy individuals who sponsor ballot initiatives end up learning how difficult it is” to succeed, said Dan Schnur, director of the Jesse M. Unruh Institute of Politics at the University of Southern California. “But Steyer did his homework, and the result was a very effective campaign.”
Proposition 39 had little opposition, but that was not by accident, Schnur said.
Early in the effort, the Yes on 39 group ran advertisements identifying the companies most likely to oppose the measure. Businesses then decided that it wasn’t worth taking a potential hit from customers, Schnur said.
“It’s unlikely [Steyer] would have passed the initiative over a fully funded opposition campaign,” Schnur said, “but the early moves he did on the front end helped him avoid a fight altogether.
Steyer said he backed Proposition 39 because out-of-state corporations were paying lower tax rates than those based only in California. And allocating revenues to energy efficiency made sense, he said, because it’s “the proven low-hanging fruit.”
During the campaign, Steyer attracted support from labor groups and some businesses, but one trade association called the measure harmful.
The change is “basically a billion-dollar tax increase on manufacturers” in the state, said Gino DiCaro, spokesman for the California Manufacturers & Technology Association. “He’s made it harder for us to operate here in California, that’s for sure.”
When Steyer in 2010 fought to defeat Proposition 23 — which would have tabled the state’s climate law — that also hurt business, DiCaro said. Companies needed more time to prepare for the state’s carbon cap-and-trade program and other changes, he said.
“The two biggest initiatives [Steyer's] taken on have hurt manufacturing in California,” DiCaro said.
“He’s also clearly fairly effective at taking positions and making them successful.”
Removing ‘climate’ from energy debate
Steyer is a major financial backer of Democrats. Over the past two decades, he has contributed more than $500,000 to the party and individual candidates, according to the Center for Responsive Politics’ data. This cycle, he gave President Obama’s re-election campaign $9,600, and in 2008, he donated $50,000 to fund Obama’s inauguration celebrations.
Steyer first became actively involved in politics around 2002, when he began working to elect Democratic presidential nominee John Kerry of Massachusetts. He was a delegate to the 2004 Democratic National Convention.
“Fighting two wars over energy seemed like a bad deal,” Steyer said. “It did seem to me that we were making incredibly bad decisions as a country. But it wasn’t about the environment explicitly.”
The environment became the motivating factor for deeper political involvement in 2010. Oil companies Valero Services Inc., Tesoro Co. and refiner Flint Hill Resources funded Proposition 23, which would have blocked implementation of the state’s climate law until unemployment fell to 5.5 percent for one full year.
Steyer said he didn’t see himself as the best person to take on the fight but “thought it was an important thing to do that nobody else seemed to be particularly anxious to do.”
He called climate change “the overwhelming issue of our time.”
Steyer spent $5 million of his own money in the effort. But his work went beyond financial support, said Ann Notthoff, California advocacy director for the Natural Resources Defense Council.
“He really played a pivotal role in the fight against 23,” Notthoff said. “He recognized early on that this was a really serious threat.”
Steyer co-chaired the No on 23 effort with former Secretary of State George Shultz, a Republican. Steyer reached out to other business leaders, Notthoff said, including Microsoft founder Bill Gates and leaders at Google.
“He’s the one that really made the No on 23 campaign viable. He made it viable by investing himself, reaching out to his friends and colleagues to get them interested,” Notthoff said, and “also bringing on board knowledgeable campaign consultants.”
Steyer said he believes the No on Prop 23 team shaped how the country talked about clean energy for the past two years. The group crafted a message about advanced energy, green jobs and pushing back against out-of-state oil companies. The word “climate” rarely was spoken.
It became the predominant approach for the next two years, Steyer said.
“We changed the language that people used,” Steyer said. “From a political standpoint, we changed the way people think about energy and the environment, and particularly how they phrase things.”
The No on Prop 23 campaign after the election briefed the White House on its successful strategies.
“How the Obama administration talks about energy, I think, is a direct extension of how we talked about it,” Steyer said. He added, “Every single campaign, every single environmental organization changed the way they framed their public debate.”
That’s been both good and bad, Steyer said.
“People who were messaging on climate stopped messaging on climate,” he said.
“It lessened the direct climate conversation,” he added, “and let that sort of recede from the front of people’s brains, which I think was a bad impact.”