tv Titans at the Table Bloomberg March 1, 2015 11:30am-12:01pm EST
betty: hi. tom: good morning. betty: tonight on "titans at the table" -- this place is gorgeous. i will be chatting with businessman turned environmental activist, tom steyer. he was born and raised in the financial capital of the u.s., new york city, but chose to open his company in san francisco. he founded the company in 1986 with $8 million, and by the time he stepped down in 2012, he turned the initial investment
into $30 billion, making it the fourth-largest hedge fund in the world. his fortune is an estimated $2.6 billion. not satisfied with retiring on the golf course, steyer reinvented himself as an envionmental activist, even funding and starring in a series of public announcements. tom: i'm tom steyer. each week we take a look at the xl keystone pipeline proposal. betty: he believes building the pipeline will escalate canadian canadiandation of the oil sand. tom: the question here was, is this a chance to change our trajectory? in terms of energy. is this a chance to change the way people think about it in the way the policy is shaped around energy? betty: we caught up with him in arkansas, where he was getting a
look at the cleanup site of an estimated 5000-barrel oil spill. genevieve: here is some just off the top of the water. it's sticky. it's extremely sticky. betty: very sticky. genevieve: it smells awful. betty: in march, 2013, a shallow underground pipeline owned by exxon mobil burst, sending oil down a residential street, as you see in this video. >> the smell is unbelievable. i mean, look, there is oil. betty: the oil flowed down the street through a drainage ditch. it emptied into a marshy area. the heavy crude, called bitumen, had come from alberta, canada, thousands of miles away. tom: what are the booms for? genevieve: they are to soak in the oil. they are supposed to.
tom: literally? genevieve: literally. they are supposed to soak in water. betty: steyer had come to mayflower to gather ammunition for what may be the biggest fight of his life, trying to stop the keystone xl pipeline from being built. he worries more leaks like this one in mayflower could happen. the proposed keystone pipeline would stretch from the canadian border across the u.s. to the existing pipeline that carries oil to the refineries in the gulf. he says the oil would be sent directly to the international market. tom: it is not going to the united states. what the true argument is, it is going to be more oil not from the middle east. that is true, but it just means there is more oil not from the middle east in the world market. betty: we walked along the quiet street in mayflower that just a few months before had been covered in oil. exxon mobil is facing a $2.6 million fine for the spill and has spent $70 million to clean it up. the company purchased many of the homes on the block. three houses were so badly damaged exxon knocked them down. most sat empty.
even after an accident, mayflower,e in defeating keystone could be a long shot for steyer. if you look at the polls, two thirds of americans do support the keystone pipeline, and that number hasn't budged. tom: it really hasn't. betty: it seems you are a minority. tom: i think this is a topic in which people don't understand what it is, and it is always presented as either we do this or we do nothing. that's absolutely not true. we are not going to run the society without energy. it is just a question of how we think about it. betty: but keystone is just part of the problem. steyer says the biggest issue is how tar sands oil is recovered from the canadian countryside. 20% of the oil is mixed in sandy soil lying just beneath the surface. it is strip mined and spun in centrifuges to separate the oil from the dirt. the remaining 80% is trapped hundreds of feet below solid rock.
steam is injected to loosen the oil. it is pumped out. the thick tar-like crude must then be mixed with chemicals to make it flow to the pipeline. tar sands requires 70% more energy to extract than traditional oil. tom: this is a gigantic mining operation in the middle of nowhere. they want to take production by 2025 and more than double it. betty: and your job is to make sure that never comes out of the ground? tom: from my point of view, i am not a scientist. the scientists say it would be devastatingly terrible for the seven billion people on the earth if it does. betty: when we return, he looks outside the box for answers. tom: i believe the solution to our energy problem is going to be corporate america. ♪
betty: tom steyer claims money didn't motivate him, but he is incredibly good at making it. the investment firm he founded has a market value of almost $4 billion. that has made him a very wealthy man. you didn't really like using money as a benchmark for your success. you still made a lot of it. how does that work? tom: for better or worse, i am competitive. betty: competitive and diversified. his investment fund invests in energy companies, including kinder morgan, which is in the oil sands, but steyer has promised to diversify and pledged to donate to any victims
of western wildfires. now he says he looks to the oil and gas industry for answers. tell me how to take the incident that happened with the mayflower oil spill. how do you apply that to the work you are doing now against the keystone pipeline? tom: let's go back for one second, which is this. i actually believe the solution for our energy problems is going to be corporate america, is going to be private enterprise, that when we get the policy framework right, the people in that sphere will come up with creative, imaginative, innovative solutions that will blow our minds. i mean, if you really look at what is happening in the fossil fuels arena, people are being really creative and innovative. some people hate fracking, but fracking is a new technology that somebody in the united states came up with as a way of engineering around an old problem. that's exactly what i expect american business to do. betty: you are saying not all corporations are evil. not all of them are bad.
in fact, it's ok to make money as long as it's toward a goal. tom: i don't think corporations are evil. what i don't think we should do is rely on corporations for our morality. you know, the truth of the matter is, we are a nation of people, and i hate to say it, but the law of the land is the people who run corporations' responsibility is to take care of the interests of their stockholders, so that is a limited worldview, in my opinion, and that's not the worldview that is going to get us to the broad answer for society as a whole, so i don't actually feel resentful. i take that as a given, and when someone asks, what is exxon's motivation, my answer is, their motivation is the stockholders and their corporate net worth. betty: did it make you feel you
needed to do something about what was going on in mayflower? did you feel you had a responsibility to do something? tom: the truth is what we have been trying to do is get the human story out because that is what other americans can understand and relate to, that experience was something that would have some reverberation and impact. betty: when we come back, using money to change politics. tom: big things are happening thanks to president obama. america is laying the foundation for the way we power tomorrow. betty: you have been a supporter of the president. tom: i have. and i am. ♪
betty: billionaire tom steyer has donated $65 million to a renewable energy centers at yale and stanford, and he has entered into the political arena, spending $10 million to support various initiatives and candidates. you have been effective in many of the initiatives you have targeted, and you call some of those initiatives you have put money into some of the best investments you have ever made. tom: [laughter] they were. betty: is that something you are going to continue to do? tom: i don't know that is what i am going to do forever, but i definitely will do that in 2014. betty: in fact, tom is not the only outspoken liberal in the steyer family. his brother jim teaches civil rights courses at stanford and founded common sense media, a nonprofit organization. the steyer brothers have been compared to another set of politically minded siblings, the koch brothers. but the koch brothers have spent hundreds of millions backing tea party candidates and conservative causes.
tom: i do not actually know the koch brothers. [laughter] betty, i did not think you would. betty: i did not think you would. tom: i think there definitely has to be differences, in the sense that those guys are doing something consistent with their self interest, and you know -- betty: when you say self interest, what do you mean? tom: they basically are pushing stuff that is very good for private enterprise, in specific, oil refinery. very consistently, very aggressively, and sometimes very intelligently. i see that as we are on very different trajectories in terms of how we think about it, who we think we are representing, and what we are trying to accomplish. betty: but he does have an agenda, one that leans to the left. he spoke at the democratic convention of 2012. tom: big things are happening. thanks to president obama, america is laying the foundation for the way we power tomorrow. betty: he and his wife have given more than $11 million to super pacs he founded.
they hosted a fundraiser with the president at their san francisco home. you have been a supporter of the president. tom: i have. and i am. betty: initially, in his first term, he was quite big on climate change, and he was quite forceful in talking about climate change. were you disappointed? tom: i think the president's record through the epa in a regulatory fashion on climate is really good, and i think he really understands the issue. messing this up, you wouldn't see today, but 20 years from now it would be super obvious, and i think they have that perspective. betty: do you have any ambition to run for office? tom: i have always said i would do virtually anything to make our agenda come true, and that is true, but i have also tried to be clear that this is not an intelligent, strategic, well-thought-out, self-interested effort to promote myself. [laughter]
so i would say, if there came a time when i thought that was really important to do, i wouldn't shy away from it because i felt i was going to get the bejeezus kicked out of me. betty: you looked a little bit like a political candidate there at the mayflower diner. tom: [laughter] betty: though he said he had no plans to run for office he stopped and have lunch with the victims of the mayflower oil spill he was in arkansas. he listened intently like a good politician. what have you learned in the last four years on your quest to get the pipeline? tom: i haven't spent all my time on the pipeline. i spent some time on the pipeline. i think i have gotten a chance to be exposed to more parts of american society than i had been when i was exclusively a professional investor, so i met a bunch of people i would never have met, and i spent time with them. i mean this isn't where you just
, say hello, how are you, and have 15 seconds. and so selfishly, i think it has been really fun, and it has been very good for me. betty: steyer's anti-keystone campaign hit a bump in the road recently. in late january, the state department released an environmental review saying the keystone pipeline is unlikely to impact oil sands production. if the state department report comes out and says look, it will happen anyway -- tom: that is not a good thing. what if they say, it is going to happen anyway. -- that is not a good thing. there's no way that is a good thing. betty: it would allow the president to say, i will go ahead and approve the keystone pipeline, and what happens to you? him tom: personally, i will
him still get up in the morning and eat breakfast. i will feel as if a huge mistake has been made. betty: if it gets approved, is there still a fight here at all? tom: i don't know. i have had people talk to me about that, and they explain different ways you can fight. betty: you don't want to look towards that point? tom: i honestly don't. i feel like we are committed to the idea of making the case right now that this makes no sense, and i think it is a chance for the president to be a global leader in a way that is incredibly relevant and incredibly historically significant. to me, i look at it like somebody is giving you on a platter this incredible opportunity, which entirely lines up with your understanding of the world and your understanding of who you want to be in the context of that world. why is that complicated? betty: when we return, tom steyer's paradise. running this huge ranch, how is it different from running a $20 billion hedge fund? ♪
betty: the northern california coast is one of the most picturesque places in the united states, so it is no wonder this is where the billionaire tom steyer spends his free time. just a few miles inland from the pacific is the 1800 acre ranch steyer and his wife katherine taylor bought in 2002. only an hour away from san francisco, it is a world away. buying this ranch, was that your idea or your wife's idea? tom: i think you can blame my wife for that one. originally we bought it because the land was so misused. you could dump stuff if you paid the fee. there had been a dea raid.
betty: why? tom: i think they were growing dope. betty: running this huge ranch, how is it different from running $20 billion hedge funds? tom: i can tell you how it is the same and how it is incredibly different. [laughter] it's the same in that you think it looks like an asset, but it is actually dramatically changed by the people who run it. that's exactly like every organization i have been in, which is having great people at the top is unbelievably significant and powerful, and that's where the comparison is. betty: how many have you put into this? tom: i try never to ask this question. we have rebuilt every building. catherine felt as if raising grass fed cattle would be a good thing to do and a fun thing to do. betty: tomkat ranch has a staff of 15, including scientists who are studying ecologically
friendly ways to raise cattle. tom: you basically move the animals from place to place. they call them ungulates, cows. that is how you have big herds of animals that have moved across the plains of the earth. at this point what we would think of as real success is if it turned out scientifically we are right with the way we are raising the animals causes the land to soak up twice as much carbon as normal. betty: steyer has always bucked against traditional wisdom. -- conventional wisdom. he and his wife decided to settle on the west coast near their alma mater stanford university, thousands of miles from wall street. tom: i intentionally chose not to live in new york city, which is the center of investment in the united states. i never felt as if i was really part of that community, even though i have a lot of friends in it.
you know they say the person that has the most toys when he dies wins. that's insane. why would that be true? the idea that if you make -- i remember when i first started, i was talking to someone about an investment situation, and there was someone trying to take control of the company. i said, that guy is an idiot. the person i was talking to said, he is worth a lot more money than you. i don't think he could be so stupid. i am thinking, am i dumber than everyone who was richer than me? no, and i am not smarter than everybody i am richer than. betty: is that why you left wall street? tom: i just didn't think -- i didn't think it would be a great place to have little kids, and if you like the great outdoors, we are sitting in california. it is hard to re-create. betty: steyer tries to get out to his ranch a few times a week. in addition to raising grass fed cattle, it plays host to local schoolchildren who come to visit
dorothy, the 300 pound pig. tom: the normal rule is don't name it if you want to eat it, but this really is the equivalent of a petting zoo. we could go inside the -- betty: the kids come here. tom: or they go inside. to feed them. they do all that stuff. here comes dorothy. let me ask you a question. do you have an apple for her? betty: do we have an apple? tom: no. [laughter] if we were smart -- that's what she's interested in, not us. betty: look at her walk. tom: i know. betty: tom steyer seems to have moved comfortably from ceo to his new role as environmental caretaker, but it remains to be seen if his passion and deep pockets are enough to conquer keystone. tom: i think my parents had a strong sense of participating in the community, which is all i
♪ emily: it has been called the harvard of silicon valley. y combinator is perhaps the most prestigious start-up incubator in the world. it has funded more than 700 companies to date, including dropbox, airbnb, and stripe. but behind the start up machine is a couple with their own start up story. how did they build y combinator into what it is today? joining me today on this edition of "studio 1.0," y combinator founders and husband-and-wife paul graham and jessica livingston. thank you so much for joining us. jessica: thank you. emily: so paul, it has been six