Bil­lion­aire fights to keep tar-sands oil out of state

San Francisco Chronicle - - BUSINESS REPORT - By David R. Baker

Bil­lion­aire en­vi­ron­men­tal­ist Tom Steyer has a new mission — keep­ing oil from Canada’s tar sands out of Cal­i­for­nia.

Steyer’s NextGen Cli­mate or­ga­ni­za­tion re­leased a re­port Tues­day warn­ing that an “in­va­sion” of tankers and rail­cars car­ry­ing crude from the oil sands could soon hit West Coast re­finer­ies, which cur­rently process very lit­tle Canadian oil.

Steyer, a ma­jor Demo­cratic donor who quit his hedge fund to fo­cus on fight­ing cli­mate change, has risen to promi­nence as a vo­cal op­po­nent of the Keystone XL pipe­line ex­ten­sion, which would link the oil sands to Amer­i­can re­finer­ies on the Gulf Coast.

But Tues­day’s re­port, pre­pared with the Nat­u­ral Re­sources De­fense Coun­cil and a coali­tion of other en­vi­ron­men-

tal groups, notes that the oil in­dus­try is pur­su­ing other pipe­line routes that would carry tar-sands petroleum to Canada’s Pa­cific Coast. From there, it could be shipped to re­finer­ies in Cal­i­for­nia and Wash­ing­ton. In Cal­i­for­nia, com­pa­nies have pro­posed five new ter­mi­nals for re­ceiv­ing oil shipped by rail — an­other po­ten­tial means of en­try. Cal­i­for­nia’s poli­cies to fight cli­mate change dis­cour­age but don’t pre­vent the use of oil-sands crude.

“Keystone is not the only way the tar sands threaten our coun­try,” Steyer said Tues­day at an event in Oak­land, re­leas­ing the re­port. “The own­ers of the tar sands are al­ways look­ing for other routes to the world’s oceans and the world’s mar­kets.”

Steyer and other en­vi­ron­men­tal­ists have made block­ing Keystone a ral­ly­ing cry in the fight against global warm­ing, since ex­tract­ing hy­dro­car­bons from the oil sands re­leases far more car­bon diox­ide into the at­mos­phere than other forms of oil pro­duc­tion. And un­like com­mon oil, the di­luted bi­tu­men (a tar-like sub­stance ex­tracted from the sands) sinks in wa­ter, mak­ing spills from pipe­lines and tankers dif­fi­cult to clean.

“It is shock­ingly toxic, it is ex­tremely nasty and it takes for­ever to clean up,” Steyer said. “To end the risk from tar-sands oil once and for all, we need to move be­yond oil to a clean en­ergy fu­ture. Luck­ily, this is the kind of lead­er­ship Cal­i­for­nia ex­cels at.”

The oil in­dus­try, and the Canadian gov­ern­ment, call the oil sands a re­li­able source of oil from a friendly ally. And in­dus­try rep­re­sen­ta­tives of­ten note that Cal­i­for­nia’s de­pen­dence on im­ported oil has grown in re­cent years, in large part be­cause pro­duc­tion in Alaska — once one of Cal­i­for­nia’s big­gest sup­pli­ers of crude — has dropped.

Steyer has de­voted a siz­able chunk of his per­sonal for­tune, es­ti­mated at $1.6 bil­lion, to back­ing po­lit­i­cal can­di­dates who sup­port ac­tion on cli­mate change and tar­get­ing those who don’t, spend­ing $73 mil­lion in the last elec­tion cy­cle. He said Tues­day that he has not yet de­cided whether to pay for an ad­ver­tis­ing cam­paign against bring­ing oil-sands crude to the West Coast.

“I’m not 100 per­cent sure,” he said. “Ex­actly how we fight it, I don’t think we’ve determined.”

Crude from the tar sands makes up a tiny frac­tion of the oil pro­cessed in Cal­i­for­nia re­finer­ies — less than 3 per­cent, ac­cord­ing to the re­port. And while the amount of oil shipped into the the Golden State by rail has soared in re­cent years, most of that petroleum comes from North Dakota and other states where hy­draulic frac­tur­ing, or frack­ing, has pro­duced a glut of crude.

But oil com­pa­nies have pro­posed two pipe­line projects that would link the oil sands to the Pa­cific Ocean, both of them trav­el­ing through Bri­tish Columbia. If built, they could lead to an ad­di­tional 2,000 oil tankers and barges mov­ing up and down the West Coast each year, ac­cord­ing to the re­port. The rail ter­mi­nal projects pro­posed in Cal­i­for­nia could raise the amount of oil-sands crude pro­cessed in the state each day from the cur­rent 50,000 bar­rels to 650,000 bar­rels by 2040.

How­ever, that out­come is hardly cer­tain.

A Cal­i­for­nia pol­icy known as the low car­bon fuel stan­dard re­quires oil com­pa­nies to cut by 10 per­cent the amount of car­bon diox­ide as­so­ci­ated with each gal­lon of fuel they sell in the state, reach­ing that mile­stone by 2020. In ad­di­tion, the state’s cap-and-trade sys­tem forces re­finer­ies to cut their over­all green­house gas emis­sions. Nei­ther pol­icy specif­i­cally pre­vents re­finer­ies from us­ing oil-sands crude, but both give oil com­pa­nies a pow­er­ful in­cen­tive to use other sources of petroleum.

An­thony Swift, one of the re­port’s au­thors, said Cal­i­for­nia needs to adopt more strin­gent emis­sions tar­gets to keep out crude from the oil sands.

“Th­ese poli­cies are a very good start,” said Swift, of the Nat­u­ral Re­sources De­fense Coun­cil. “We need to get more ro­bust tar­gets — for both the low car­bon fuel stan­dard and the cap — to sig­nal to the in­dus­try that Cal­i­for­nia is not go­ing to be an op­tion for tar-sands re­fin­ing.”

“Keystone is not the only way the tar sands threaten our coun­try. The own­ers of the tar sands are al­ways look­ing for other routes to the world’s oceans and the world’s mar­kets.” Tom Steyer, founder NextGen Cli­mate

Curtis Tate / McClatchy-Tri­bune News Ser­vice 2014

A train car­ries crude oil through Kansas City, Mo., in 2014. En­vi­ron­men­tal­ist Tom Steyer’s NextGen Cli­mate or­ga­ni­za­tion warns that rail­cars car­ry­ing oil from Canada could soon hit West Coast re­finer­ies.

Tom Steyer hopes to block Canada oil from the state.

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