By Leah McGrath Goodman
FORTUNE -- Jeremy Grantham, 74-year-old chief investment strategist of the $106 billion Boston-based investment-management firm GMO LLC, says he will participate in a surprise show of civil disobedience planned by the Sierra Club in Washington Wednesday morning protesting the completion of TransCanada Corp.'s (TRP) controversial Keystone XL Pipeline.
It is an unusual move for a fund manager, but Grantham's reputation as an outspoken climate-change activist precedes him. While he does not expect to be arrested, Sierra Club National Press Secretary Maggie Kao says the environmental group's board voted to allow acts of "civil disobedience" for the first time in its 120-year history as part of Wednesday's action. That effectively means the group expects its protest to "result in arrests," she said, declining to elaborate on the particulars of the action. The protest will begin at 11 a.m. ET at Lafayette Square near the White House.
In an exclusive interview with Fortune, Grantham says he opposed the pipeline for both economic and environmental reasons, calling it "poisonous" and "disastrous for the environment." One of the Sierra Club's biggest sponsors, Grantham runs the Grantham Foundation for the Protection of the Environment, which he founded in 1997. He founded GMO in 1977. Both are based in Boston.
"Last year, we had the hottest summer in history and Manhattan floods," he tells Fortune. "It is becoming clear this is a man-made problem and it is serious. We can't afford to burn tar sands, or our goose will be cooked. What we are trying to do is buy time, buy time for the world to wake up. If that means months or years of delaying new pipelines, then all the better."
For Grantham, this will be his first protest of any kind ever. "I have told scientists to be persuasive, be brave and be arrested, if necessary, so it only seems proper to do this," he says. Grantham traveled to Washington by train Tuesday night to march alongside roughly 50 climate-change activists and environmental advocates, in addition to civil-rights leader Julian Bond, environmentalist Bill McKibben, and Sierra Club Executive Director Michael Brune. "The oil industry wants this pipeline in the worst way," Brune says. "But it's become a symbolic line in the sand for people who care about climate change."
The first stage of the Keystone pipeline, approved in 2008 and started up in 2010, allowed TransCanada to export oil from its tar sands in Alberta, Canada, to the U.S. Midwest. The final leg of the north-south pipeline, which may be approved by the Obama Administration as soon as this spring and completed by late 2014, would transport tar sands oil about 2,000 miles from Canada to the Gulf Coast's refining facilities, known for cranking out petroleum products -- and exporting them for top dollar.
While academic research points to crude oil derived from tar sands up to 37% more carbon-intensive than conventional crude, Shawn Howard, a spokesman for TransCanada, points out that the U.S. is not about to reduce its reliance on oil anytime soon. "As we have said before, TransCanada agrees with President Obama regarding the need to move to a less carbon-intensive society," he says. "But the truth is we are decades away from that becoming a reality."
Grantham, whose investment-management firm GMO invests approximately $2 billion in natural resources, says he's been advising his clients to stay away from high-cost, low-quality energy investments, such as coal and tar sands. "By a happy coincidence, my investment view sits perfectly with my environmental views," he says. "I believe anyone investing in tar sands is very likely to end up with stranded assets in the next decade or two. Solar is getting cheaper by the minute, whereas petroleum is getting more expensive. It is only a matter of time before their expenses cross."
Wednesday's Sierra Club demonstration is a warm-up for a larger national protest it is planning in Washington on Feb. 17 to heighten climate-change awareness, says Kao. That protest is expected to draw an estimated 30,000 to 50,000 people.
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