Plan B Forum

The real reason Republicans are pushing the Keystone XL tar sands pipeline?

Study: Koch Brothers Could Make $100 Billion if Keystone XL Pipeline Approved

A new study released today concludes that Koch Industries and its subsidiaries stand to make as much as $100 billion in profits if the controversial Keystone XL pipeline is granted a presidential permit from U.S. President Barack Obama.

The report, titled Billionaires' Carbon Bomb, produced by the think tank International Forum on Globalization (IFG), finds that David and Charles Koch and their privately owned company, Koch Industries, own more than 2 million acres of land in Northern Alberta, the source of the tar sands bitumen that would be pumped to the United States via the Keystone XL pipeline.

(Click to expand)

IFG also finds that more than 1,000 reports and statements in support of the Keystone XL pipeline project have been made by policy groups and think tanks that receive funding from the Koch brothers and their philanthropic foundations.

"The Kochs have repeatedly claimed that they have no interest in the Keystone XL Pipeline; this report shows that is false," said Nathalie Lowenthal-Savy, a researcher with IFG. "We noticed Koch Funded Tea Party members and think tanks pushing for the pipeline. We dug deeper and found $100 billion in potential profit, $50 million sent to organizations supporting the pipeline, and perhaps 2 million acres of land. That sounds like an interest to me."

Nathalie continued, “We all know they will use that money to fund and expand their influence network, subvert democracy, crush unions like in Wisconsin, and get more extremists elected to congress."

Someone needs to turn a profit if it ever gets the go ahead.
Now it seems they did lie about their intentions, but that pipeline should be built. The oil will either go to us or to Cananda's west coast (aka China)

Just for fun I would like to see a quote from a representative of Koch Industries in which it is claimed that the company has "no interest" in the Keystone X LPipeline.

If such a quote does exist - and it might - it probably has something to do with the fact that the oil will be sold REGARDLESS OF WHETHER THE KEYSTONE XL PIPELINE IS BUILT OR NOT. That pipeline will only determine whether it is transported to Texas or to the West coast of Canada. It makes no difference whatsoever to the person or company that owns the land and the rights to the oil.

And if there is a hundred billion dollars in profit (is that C$ or US$?), that profit will be earned regardless of whether the pipeline goes south or west, eh?

So why is this news? To say that they have "no interest" is more or less the same as saying, "it makes no difference to us," which is TRUE.

Econoline, do you disagree? Why?

Actually, the correct question -- given that the pipeline is a no-brainer -- is whether this is the real reason Obama won't allow it.

The fossil fuels industry has changed so radically in recent years that the pipeline is certainly not a "no brainer" unless you mean it is stupid to even consider it. Or perhaps you mean it is a "no brainer" for those who are slavish whores to the Koch brothers and don't care that it is probably an economic net loser for the rest of the US?


yrs,
rubato

Dave nailed this one...(and rube once again demonstrates his reading skills)...

This a completely dishonest piece of propaganda; and the amusing part is that the proof that it is nothing but dishonest propaganda is in the article itself:

David and Charles Koch and their privately owned company, Koch Industries, own more than 2 million acres of land in Northern Alberta, the source of the tar sands bitumen

Which as Dave correctly points out is going to be used to produce the oil, whether the Keystone pipeline is built or not.

So the Koch brothers make the money either way, and therefore in fact don't have any interest in the pipeline project itself; their claim was 100% accurate. and not even the slightest bit misleading...

The same can certainly not be said for the waste of bandwidth in the OP...

Whoever wrote that piece of garbage is either shamelessly and cynically dishonest, and deliberately omitted the fact that the Kochs are going to make that money pipeline or no pipeline, in order to deliberately give the false impression that their money was somehow tied to the pipeline construction...

Or the author is himself ignorant of the fact that if the pipeline isn't constructed an alternative route is already in the works and the Kochs will still make their cash....

After checking out the website linked as the "source" for this bit of agit-prop, my money is strongly on explanation number one...

It appears this fellow makes his livelihood feeding the left's paranoia about their favorite current bogeymen, The Brothers Koch....

I don't suspect he (or probably most of his readers) has any interest in letting a little thing like the facts get in the way of a good mouth-foaming wild-eyed round of Koch bashing....

Actually it's pretty moronic to claim that the exact same amount of oil will be produced whether the pipeline is built or not. There is a lot of oil in them tar sands, and I doubt very much that oil producers are going to forego one large and expanding market just because they have secured another.

Tar sands oil is expensive to produce both in energy and in money. The Koch brothers make more money if the costs are lower. If the costs of building a pipe to Vancouver and shipping it to Asia were lower that would already be their first plan. It is not.

I've seen no evidence that it is a net economic benefit for the US and there is considerable evidence that it is not.

yrs,
rubato

This oil is destined for China regardless. The transport and extraordinary refining requirements make it to costly to be viable stateside.

As I have posted here before, I think the Keystone XL pipeline is a dumb idea with minimal benefits to the U.S. after a relatively few construction jobs. It would be nice if the Administration would just say it's stupid, explain why, and be done with it. But for Barry the truth is the option of last resort.

dgs49 wrote:This oil is destined for China regardless. The transport and extraordinary refining requirements make it to costly to be viable stateside.

You do realize that you have just completely contradicted your previous post.

And you really don't know shit about any subject you spout off about, do you? Tar sands crude is priced significantly lower than light crude precisely because it costs more to refine. Or are you claiming that Americans are collectively too stupid to know how to do it?

What a buffoon.

It is also more expensive to push it through a pipe since you have to keep it heated so that it will flow. It is called "tar sands" because of the very high viscosity at ambient temperatures.


yrs,
rubato

Lord Jim wrote:....a good mouth-foaming wild-eyed round of Koch bashing....

Frankly, even if that's all it is, count me in: the Koch brothers deserve all the bashing they can get and more.

I remember back when the organization their daddy, Fred Koch, co-founded--the John Birch Society--became a laughing-stock for anyone who took politics seriously by claiming (among many other wacko things) that Earl Warren and Dwight Eisenhower were communist sympathizers. Nowadays the family money has all but destroyed the Formerly Grand Old Party by mutating it from a bastion of serious conservative thought and moderate internationalist capitalism into a haven for reactionary, paranoid, prejudiced, isolationist, and just plain greedy wingnuts, conspiracy theorists, and religious wackos. Republicans should be appalled at what the Koch family has done to their party, and Democrats should be appalled at what they've done to our political discourse. We all deserve a better opposition party.

I also have too many fond memories of travels in Canada and too much affection for Canada's vast wilderness to want to see 2 MILLION ACRES of it strip-mined just so that a couple of the wealthiest people in the world can become even richer and even more politically influential. The strip-mining and transport of Canadian tar sands would have minimal benefit to the U.S. and maximal liability to the environment, the climate, and the U.S. political system. What's not to hate?





Okay, okay...I'll wipe the foam from my mouth and close my eyes for a while now....

Canadian bitumen contains asphaltenes, which must be removed at significant cost before the oil can be marketed. In addition, the cost to transport the oil to the Gulf is $8-10/bbl greater than moving it to the West coast of Canada.

The addition of this source to the global market will have a negligible effect on U.S. gasoline prices, regardless of which pipeline option is chosen, and it makes no difference in any event. Essentially none of it will end up at U.S. gas stations.

The Keystone XL Pipeline is economically stupid.

Econoline, since you are so strident in your belief of the evil of the Koch Brothers, perhaps you should document exactly what you are talking about and start a new thread. I am especially interested in their plans to "strip mine two million acres of wilderness."

Propaganda from the Koch Industries website:

Keystone XL Pipeline
Koch Industries has no financial stake in the Keystone pipeline and we are not party to its design or construction. We are not a proposed shipper or customer of oil delivered by this pipeline. We have taken no position on the legislative proposal at issue before Congress and we are not cited in any way in that legislation.

But what do they know?

It depends on how you look at this story, I guess...

[quote] ...many of the claims in the report may be demonstrably false, especially the claim that the Koch Brothers stand to make $100 billion from the Keystone XL Pipeline and "own" 2 million acres of land in Canada. To put that claim in comparison, Exxon Mobil, which is a vastly larger enterprise than Koch Industries, made a $45 billion profit last year, one of the biggest ever recorded by any company.

Powerline also points out that Koch Industries has not even taken a specific position on the pipeline because it may actually be detrimental to its interests. Koch will likely have to pay "higher prices for crude oil for its Pine Bend refinery" if the Keystone XL pipeline is built, because "Canada will have more outlets for its crude oil and the Midwest will have to compete with refineries in Texas for the product."

In fact, the very IFG report that the [PINKO] media relied on made the same claim, finding that the Keystone XL pipeline would cost Koch $120 billion in profits that they would have to make up:

Using our modest estimate that KXL will prevent on average a $20 discount to the price of a barrel of tar sands crude, FHR’s [Flint Hills Resources, a Koch subsidiary] Pine Bend refinery will miss out on $120 billion in profit ($20 x 6 billion barrels = $120 billion).

In addition, the IFG report never even stated that Koch owns two million acres of land in Alberta, Canada. The report merely said that Koch leases the land and, because "data on lease acreages are not publicly available," the report "purports to rely on a former Koch employee who may have made the whole thing up."

Even if, as the IFG report alleges, Koch is leasing 1/18 of the land in Alberta, Canada, they will have access to 1/18 of the 830,000 barrels of oil per day that will be the Keystone XL pipeline's daily capacity. With these calculations, as Powerline notes, Koch would get 16.8 million barrels per year. Since the IFG report said Koch would need to "sell eight billion barrels to break even on the $120 billion" it will lose over 50 years if they do not, it would take 476 years for Koch to break even on the pipeline using the IFG report's numbers.

Furthermore, Koch would have to clear $15 a barrel on those eight billion barrels to break even. Only when Koch ships 14.7 billion barrels of "Alberta oil on the KXL pipeline" will it realize the $100 billion profit figure in all of the headlines. And as Powerline notes, that is assuming the "IFG’s facts are correct," even though Koch may not even produce oil in Alberta, which is to say it would take an extraordinary number of things to happen for Koch to come to close to realizing the $100 billion in profits. [end of quote, underlining added]

Do you have a source for that quotation, dgs49?

dgs49 wrote:I am especially interested in their plans to "strip mine two million acres of wilderness."

You are aware, aren't you, that bituminous sands ("tar sands") are solid, not liquid, and so can't just be pumped up out of the ground like crude oil? And that the most common and most efficient way to extract the bitumen is to simply strip off the overburden and dig up the tar sands using ginormous power shovels and humongous dump trucks? (And then the petroleum is extracted by adding caustic soda and vast amounts of hot water to make a slurry in which the petroleum floats to the top...which of course raises a couple more questions: are our grandchildren prepared to start drinking oil and gas when we've used up most of our fresh water extracting oil and fracking for gas? Are the Future Farmers of America learning how to grow crops without using fresh water?)

You are aware, aren't you, that bituminous sands ("tar sands") are solid, not liquid, and so can't just be pumped up out of the ground like crude oil? And that the most common and most efficient way to extract the bitumen is to simply strip off the overburden and dig up the tar sands using ginormous power shovels and humongous dump trucks?

Well, that's not how at least 85% of the oil in this project is going to be extracted....

I've done a little digging, (no pun intended) and the method that is going to be used to extract the vast bulk of the available oil in the Alberta oil sands project is referred to as In Situ, or Steam-assisted gravity drainage, a method which has far far less surface impact on the environment then traditional strip mining:

Steam Assisted Gravity Drainage (SAGD) is an Enhanced oil recovery technology for producing heavy crude oil and bitumen. It is an advanced form of steam stimulation in which a pair of horizontal wells are drilled into the oil reservoir, one a few metres above the other. High pressure steam is continuously injected into the upper wellbore to heat the oil and reduce its viscosity, causing the heated oil to drain into the lower wellbore, where it is pumped out. as an in-situ SAGD bitumen recovery facility. Dr. Roger Butler, engineer at Imperial Oil from 1955 to 1982, invented the steam assisted gravity drainage (SAGD) in the 1970s. Butler "developed the concept of using horizontal pairs of wells and injected steam to develop certain deposits of bitumen considered too deep for mining

The currently recognized recoverable resource in Alberta’s oil sands is 174 billion
barrels, second largest in the world. Of this, about 150 billion bbls, or 85%, is too
deep to mine and must be recovered by in situ methods, i.e.
from drill holes.

This estimate does not include any contributions from the Grosmont carbonate
platform, or other reservoirs that are now at the early stages of development.
Considering these additions, together with foreseeable technological advances, the
ultimate resource potential is probably some 50% higher, perhaps 315 billion bbls

http://www.worldenergy.org/documents/co ... rs/250.pdf

So this two million acres of strip mining business is essentially nothing but alarmist hysteria (BTW I did the math, and two million acres amounts to about 3000 square miles which is considerably less than one percent of Canada's total square mile area...So even if they were strip mining this area in order to obtain the second largest recoverable oil reserves on earth...which again, let me emphasis they aren't...Bambi wouldn't be in any danger of having to move to the city anytime soon...) churned up, (again no pun intended) to provide red meat for the Anti-Energy Development Luddites and the Koch Head crowd...(There's probably a lot of overlap between the two)

Or put another way, like the SAGD process itself, it's just a lot of hot air...(gee, the puns just kind of write themselves on this topic, don't they? )

BTW Econo the PDF that I linked to for the second article is an excellent source for genuine information on this project...(That's assuming of course that you're interested in genuine information; as pretty much a self-admitted Koch Head, you may not be...I get the feeling that if some whacko posted an article about how the Koch brothers were in league with malevolent extraterrestrials to pave the way for an invasion and the enslavement of the earth's population, the reaction of most Koch Heads would be, "I knew it, I KNEW IT! " )

It bears noting that Lord Jim's source is a propaganda piece authored by a VP of a company whose reason for existence is to extract fossil fuels from Alberta. A less biased source might be in order.

Actually Wikipedia gives a pretty good summary of the in situ extraction methods now in use or under development. Besides SAGD it also mentions cold flow, VAPEX (Vapor Extraction Process), CSS (Cyclic Steam Stimulation), THAI (Toe-to-Heel Air Injection), CAPRI (controlled atmospheric pressure resin infusion), and COGD (Combustion Overhead Gravity Drainage). The things that all these methods seem to have in common are lower bitumen extraction rates (from 5-6% for cold flow up to possibly 60% for SAGD--as opposed to up to 90% for surface mining), higher energy requirements, higher greenhouse gas emissions, and higher groundwater usage. So it seems obvious that the oil industry will extract as much as they can using strip-mining techniques before they begin to rely on in situ extraction. And even though in situ extraction may not be quite as visible (by satellite, from outer space, e.g.) it may well produce just as much or more long-term environmental damage.

And oh, BTW...a former TransCanada Corporation pipeline materials engineer has some serious concerns about the integrity of the KXL pipeline itself.

Lord Jim wrote:BTW I did the math, and two million acres amounts to about 3000 square miles which is considerably less than one percent of Canada's total square mile area

Not too long ago you seemed pretty concerned about the possible destruction of a mere 234 square miles (~ 7½% of this)...of course, this is in Canada and that was in California, and it’s unlikely that anyone in California is going to need water from Canada anytime soon. But now that you’ve got children, you really ought to be thinking more about the world your grandchildren will have to live in; I know I am, and I don’t even have any grandchildren (YET!...however, I do have 2 married daughters....) To (briefly) come back to the Koch brothers’ role in all this...I agree with dgs (now there’s a sentence you won’t find me using very often) that

dgs wrote:The Keystone XL Pipeline is economically stupid.

What worries me is that while I believe the Koch brothers are demonstrably crazy, I know they’re not economically stupid. If they and other big players in the oil industry are pushing a project that is economically stupid I can only think that they’re counting on their money (= political influence) to persuade enough U.S. politicians to change enough laws to bail them out and make the project profitable. I’ve no doubt they’ve done a cost/benefit analysis of just such a plan and think they can pull it off.

I know the Koch brothers are not alone in their financial support of the teapartification (is that a word yet?) of the Republican Party, but there’s no doubt that they have been and continue to be big players in the movement. Anyone who believes (as I do) that this has been and continues to be a very bad thing for our political system ought to be afraid, be very afraid of any political decision which will increase their wealth (and thus their political influence).