Henry Waxman and Bobby Rush, the top ranking Democrats on the House Energy and Commerce Committee, had the audacity to question the relationship between Koch Industries and the massive new Keystone XL pipeline under review by the State Department. The Republicans and Koch Industries were not amused.
“We are writing to request that in preparation for the hearing on and markup of this draft legislation, the Committee request documents from Koch Industries relating to the company’s interests in Canadian tar sands and the extent to which it will benefit if the Keystone XL pipeline is constructed,” the Democrats write in a letter sent to committee Republicans Friday.
The Hill, May 20, article by Andrew Restuccia
The House Energy and Commerce Committee is pushing new legislation that would demand that the Obama administration approve the new pipeline project by November 1. Never mind that the legislation can best be described as the legislative branch of government telling the executive branch what to do. This is laughable irony after the Bush administration's attempt to expand executive authority into an imperial presidency.
When Democrats on the Committee requested information about the footprint of Koch Industries in the tar sands oil market and direct benefit from the Keystone XL project, they were stonewalled by Koch Industries.
A Koch representative told Democratic staff that Keystone XL has “nothing to do with any of our businesses.” The company also noted that Koch has “no financial interest” in the project.
But the letter says the company would not answer broad questions about its involvement in the oil sands industry.
The Hill, May 20, article by Andrew Restuccia
Other major oil companies were willing to provide details of their tar sands oil extraction, transport, and refining operations.
Koch Industries is a big fish in the tar pit
Koch Industries is a proverbial big fish when it comes to bringing tars sands oil to American transportation fuel pumps. It is hardly a secret.
A SolveClimate News analysis, based on publicly available records, shows that Koch Industries is already responsible for close to 25 percent of the oil sands crude that is imported into the United States, and is well-positioned to benefit from increasing Canadian oil imports.
Koch Industries own literature also highlights the scope of their operations.
Based in Calgary, Alberta, Flint Hills Resources is among Canada’s largest crude oil purchasers, shippers and exporters. To meet the needs of its more than 90 Canadian crude oil customers, the Supply Group operates a fully integrated marketing and customer service desk in Calgary and operates a crude oil terminal in Hardisty, Alberta. The group also coordinates crude oil supply for the company’s Pine Bend Refinery in Minnesota.
So why would Koch Industries refuse to answer basic questions? Simple. It would focus attention on how much the company has benefited from another pipeline bringing Canadian tar sands oil into the U.S., namely the Alberta Clipper. Flint Hills Resources (a Koch subsidiary) controls much of the oil passing through the Alberta Clipper pipeline, which feeds oil from the company's terminal in Hardisty, Alberta to its Pine Bend refinery in Minnesota. Koch also owns a heavy oil refinery in Texas, so it is not unreasonable to assume it will also have some stake in tar sands crude moving through the Keystone XL pipeline.
The Koch Republic
Since the Koch brothers are among the biggest contributors to the Republican Party, even creating the astroturf Tea Party movement to agitate for an end to government regulation and taxation of corporations, it seems only fair to demand a little transparency. Transparency is particularly important when policies are being pushed that may directly benefit Koch Industries.
Fred Upton, chair of the Energy and Commerce Committee, had a hissy fit over questions about Koch. Methinks he doth protest too much.
Upton attacked the “outrageous accusation from the minority that this pipeline deserves even greater scrutiny because one company might or might not benefit from its construction.”
“This blatant political sideshow is simply a distraction that, in the end, underscores the desperation of those who want to stand in the way of this common sense project,” Upton said.
The Hill, May 23, article by Ben Geman
The pipeline deserves intense scrutiny for many reasons - necessity, environmental impacts, property right infringements, and financial benefits beyond a handful of corporations. There is nothing about this pipeline that qualifies as common sense.
Upton and the Republicans held the hearings with the intent of pressuring the Obama administration to ignore potential negative impacts from the pipeline. Waxman decided to delve into the corporate interests driving the project because there is little evidence that the pipeline is needed to serve the American public. While other companies were willing to discuss their oil sands operations, “Koch has refused to answer basic questions.”
Is Waxman asking the right questions?
As much as I enjoy watching Waxman calling attention to the tar sands oil operations of Koch Industries, I am not sure it is the most important set of questions to ask.
Did you know that the U.S. is a major exporter of oil? In fact, our exports reached a record 2.3 million barrels per day in 2010.
At the same time, U.S. exports of petroleum products more than doubled to a record 2.3 million bpd last year from 1.1 million bpd in 2005.
"Nowhere have U.S. product exports increased more than in the Americas, including Mexico, Canada, Central and South America and the Caribbean, thanks to economic and population growth and inadequate refining capacity in those countries," the EIA said.
Reuters, May 25, article by Tom Doggett
The petroleum we export is not crude oil, but rather refined transportation fuels. When the Center for American Progress published a story about American oil exports last year, energy analysts at Platts were quick to criticize the story for not focusing on refined products aspect of the exports. Actually, the refined products angle should be our focus.
Most of the refined transportation fuels we are exporting is going to countries (e.g., Mexico, Canada) that have significant refinery capacity. What these countries do not have is the ability to refine heavy crude oil like that produced from tar sands. ExxonMobil, ConocoPhilips, or Koch Industries cannot sell tar sands crude to these countries, but can sell them refined products from that crude.
We have heard a great deal over the past 5 years about the refining bottlenecks contributing to the rise in oil prices in the U.S. market. Those bottlenecks are not because we are importing more oil or using more oil. Our imports and consumption have been stable for several years. What has changed dramatically is the capacity of American refineries being diverted to produce petroleum products to sell to our neighbors and other foreign markets. Much of those exports are shipped from the Gulf Coast refineries, particularly those in Texas.
What the Keystone XL pipeline does is bring tar sands oil to refineries in Texas. So, the question someone should be asking is whose interests are being served by the pipeline. Does it serve the energy needs of American consumers as claimed by Republicans like Fred Upton? Or does it serve to move tar sands crude from Canada to Gulf Coast refineries where petroleum products can be produced for export?
If we can export 2.3 million barrels of petroleum products per day, then why do we need the Keystone XL pipeline to bring in 900,000 barrels of tar sands crude per day? The EPA noted that the State Department's Environmental Impact Statement did not make a compelling case why the pipeline was needed for our energy security. One can also ask what impact diverting our refining capacity has on U.S. energy costs. Are we paying more at the pump so the oil companies can export more of their products on the global energy market?
While the energy needs of the U.S. may not be served by the Keystone XL pipeline, we will suffer the environmental impacts from the greenhouse gas and toxic emissions from the refineries processing the tar sands crude. Texas has refused to comply with the air quality standards of the Clean Air Act, leading to a battle with the EPA. Increasing the handling of tar sands oil in Texas refineries will further degrade air quality in the state.
Robert Greenwald's Brave New Foundation has a new video that argues the Keystone XL pipeline should be rejected because of a potential connection to Koch Industries.
There is a risk of focusing too much attention on Koch Industries as a reason to reject the Keystone XL project. Their interests in the other tar sands oil pipelines, including the Alberta Clipper, are likely to be greater than in the Keystone XL project. It never hurts to demand transparency and remind people of the Koch connection to tar sands oil, but it may not be the strongest hand to play in stopping Keystone XL.
There are many reasons to say no to Keystone XL. If we can divert more and more of our refinery capacity for oil exports, we do not need it for our energy security. It will contribute to air pollution and climate change, particularly since Rick Perry and Texas refuse to enforce environmental laws. A pipeline spill, particularly in Ogallala aquifer, would have potentially disastrous consequences for water access in Plains states. Property rights are being trampled. The Koch connection is a fly on a steaming cow pie.