To environmentalists across Australia, it is a baffling anachronism in an era of climate change: the construction of a 4,000-acre mine in New South Wales that will churn out carbon-laden coal for the next 30 years.
The mine's groundbreaking, in a state forest over the winter, inspired a 92-year-old veteran to stand in front of a bulldozer and a music teacher to chain himself to a piece of excavation equipment.
But the project had an unlikely financial backer in the United States, providing an infusion of cash that helped set it in motion: Tom Steyer, the most influential environmentalist in U.S. politics, who has vowed to spend $100 million this year to defeat candidates who oppose policies to combat climate change.
Steyer, 56, a billionaire former hedge fund manager, emerged this election season as the green-minded answer to Charles and David Koch after vowing that he would sell off his investments in companies that generate fossil fuels such as coal.
But an in-depth examination of those investments shows that, despite his highly public declaration, Steyer's divestment will do little to impede the coal-related projects his firm bankrolled, which will generate tens of millions of tons of carbon pollution for years, if not decades, to come.
Over the past 15 years, Steyer's fund, Farallon Capital Management, has pumped hundreds of millions of dollars into companies that operate coal mines and coal-fired power plants, records and interviews show.
The expected life span of those facilities, some of which may run through 2030, could cloud Steyer's image as an environmental savior and the credibility of his clean-energy message, which has won him access to the highest levels of U.S. government. A few weeks ago, Steyer joined President Barack Obama for an intimate group dinner at the White House, according to people told of the event.
The New York Times examined the operations of coal-mining companies in which Farallon invested or to which it lent money during Steyer's stewardship, which coincided with growing demand and prices for coal. Together, those mines have increased their annual production by about 70 million tons since they received money from the hedge fund, according to corporate records, government data and interviews with industry experts.
That is more than the amount of coal consumed annually by Britain.
"I am disappointed, I have to say," said Dale Jamieson, a professor of environmental studies at New York University who said he admired Steyer's campaign to curb climate change. When it comes to large-scale investments in coal, Jamieson said, "you can't undo what you've done in the past."
Steyer sold his ownership stake in Farallon in late 2012, but he has not cut ties with it entirely. He remains a passive investor, his aides said, though they declined to describe the size of his investment. Employees at Farallon screen out any fossil fuel-related holdings from his portfolio, and he no longer earns a share of the profits from the fund, the aides said.
Farallon is still invested in carbon-generating industries, and the aides declined to say whether Steyer had asked it to sell those holdings.
The Australian mine, known as Maules Creek, illustrates the complexities of Steyer's efforts to distance himself. Farallon was a major investor in a 2009 deal aimed at developing the mine, lending an Australian entrepreneur hundreds of millions of dollars to buy out the previous owner, according to people involved in the transaction. Eventually, the entrepreneur took the mine public, turning Farallon's investment into a large profit. An executive involved in the original deal estimated that Farallon earned tens of millions of dollars.
Farallon remains an investor in Maules Creek. Mining at the site, which is expected to start in 2015, will last up to 30 years, yield as much as 13 million tons of coal a year and generate about 30 million tons of carbon dioxide a year, according to Ian Lowe, former head of the School of Science at Griffith University in Queensland, Australia. The company that owns the mine, Whitehaven Coal, disputes the carbon dioxide projection.
Given Steyer's reputation as an active environmentalist, Australian opponents of the mine were startled to learn of his firm's role as an early investor.
"It's gobsmacking," said Philip Spark, president of the Northern Inland Council for the Environment, a nonprofit trying to stop construction of the mine. "It's amazing that such a person could have been involved in this project."
Mark Carnegie, an investment banker in Australia who was involved in the Maules Creek deal, said he could sense even then that Steyer was struggling to reconcile his motivations as a profit-seeking investor with his growing anxieties about the environment.
"It was a hard thing to turn down," Carnegie said. "It was a huge winning bet for Farallon."
The Republican candidates Steyer is targeting in this year's midterm elections said such investments deeply undermined his cause.
"It blows a hole in his credibility," said Rep. Cory Gardner, a Senate candidate in Colorado, whose Democratic rival, Sen. Mark Udall, has benefited from $100,000 from Steyer's NextGen Climate super PAC. "You can't claim you are a great environmentalist and invest in the very same technologies you are railing against."
Republican leaders and their allies are drawing up plans to cast Steyer as a hypocrite. In North Carolina, Thom Tillis, a Senate candidate, said he intended to portray his opponent, Sen. Kay Hagan, and Steyer as "people who say one thing and do another."
Steyer's supporters point to the $25 million campaign he organized four years ago to defeat a California ballot initiative that would have gutted the state's landmark climate change law. The law remained in place and is projected to cut about 30 million tons of carbon emissions by 2020. This year, Steyer plans to spend four times as much in support of Obama's plan to reduce emissions from about 600 coal-fired power plants -- a plan expected to eliminate 220 million tons of carbon pollution a year.
Heather Wong, a spokesman for Steyer's political organization, said Steyer had invested heavily both in creating jobs in the emerging clean-energy industry and in training workers for those positions.
Back in Australia, environmentalists wondered whether Steyer would try to stop the giant new coal mine financed by his hedge fund.
Blair Palese, an environmental leader in Australia, urged Steyer to "get Farallon to step back and get out of this investment."
"It could be 30 years of coal production," she said. "How can we keep doing this?"
A Section on 07/06/2014