Koch Bros. Accused of Stonewalling Congress on Their Keystone XL Pipeline Interest

"This pipeline will enable oil companies to charge American consumers more for their gasoline"

05-25-2011 // Elizabeth McGowan, SolveClimate News/Reuters

The following is an excerpt from a SolveClimate article on Reuters.

Waxman and fellow Democrat Rep. Bobby Rush of Illinois, ranking member of the subpanel, sent a three-page letter to Upton and Whitfield Friday afternoon asking them to delve into Koch's potential involvement with Keystone XL.

"There appears to be a significant discrepancy between the published reports that Koch Industries would be 'big winners' if the pipeline is approved and the statement of the Koch representatives that the pipeline has 'nothing to do' with Koch's businesses," Waxman and Rush wrote in their May 20 letter. "We do not presume that Koch's representatives are inaccurate. But we are dismayed by the company's lack of candor in responding to staff's questions and believe additional inquiry is warranted."

Specifically, the two Democrats wanted the committee to find out if Koch or any of its subsidiaries is developing tar sands projects, has plans to export tar sands oil through Keystone XL, owns a terminal that is involved in the tar sands business, or has plans to refine tar sands oil transported through Keystone XL.

Pipeline Opponents Outnumbered

Of the seven witnesses invited to testify at Monday's hearing, only two questioned the value of Keystone XL to American interests.

Jeremy Symons, senior vice president for conservation and education at the National Wildlife Federation, and Randy Thompson, a Nebraska farmer featured in an October SolveClimate News article, were up against five pro-pipeline witnesses. Thompson was unable to attend the hearing because his mother died recently, so his written testimony was entered into the record.

Every time Symons or a Democratic subcommittee member tried to challenge TransCanada's claims about the safety of tar sands mining or the effect construction of Keystone XL would have on gasoline prices, he was challenged by a Republican member or one of the five pro-pipeline witnesses.

That list of witnesses included: Dan McFadyen, chairman of the Alberta Energy Resources Conservation Board; Murray Smith, president of Murray Smith & Associates; Alex Pourbaix, president of energy and oil pipelines at TransCanada; Stephen Kelly, assistant general president of the United Association of Plumbers and Pipefitters; and James Burkhard, managing director of global oil at IHS Cambridge Energy Research Associates.

Carbon Emissions and Gas Prices

Rush and others repeatedly asked about the effect of Keystone XL on gas prices in Illinois and 14 other states in the greater Midwest region.

Pipeline proponents such as Burkhard claimed that simple supply and demand economics likely meant motorists would pay less at the pump. But even Pourbaix of TransCanada couldn't verify that assumption. Also, for some reason, he warned questioners not to confuse the price of crude oil with the price of gasoline — as if somehow the two weren't related.

Symons seized the moment to emphasize that the "Keystone XL pipeline scheme is an oil company wolf hiding in Canadian sheepskin." He explained that instead of reducing this country's reliance on oil from hostile nations, it would open the Canada-to-China route that oil companies have long sought. Diverting supply from Midwestern refineries to those on the Gulf Coast would raise gasoline prices an estimated 10 to 20 cents per gallon, with the highest spike in the Midwest.

"My parents taught me that when something sounds too good to be true, you better take a second look," Symons said. "The idea that big oil companies want to spend $13 billion on a pipeline ... to help Americans at the pump sounds too good to be true because it simply isn't true."

He referred subpanel members to a column that appeared March 13 in the Minneapolis newspaper, the Star Tribune. In it, oil market economist Philip Verleger explains why American drivers will lose out if Keystone XL avoids Midwestern refineries.

Recently uncovered documents reveal that TransCanada and the oil companies supporting construction of Keystone XL are intent on price manipulation, Symons said. TransCanada has estimated that bumping up the price of heavy crude would boost annual revenue to the Canadian producing industry between $2 billion and $3.9 billion in 2013. As reported by SolveClimate News, Sen. Ron Wyden, (D-Ore.) has asked the Federal Trade Commission to investigate this situation.