Today’s Washington Post features an article by Steven Mufson and Juliet Eilperin headlined, “The biggest lease holder in Canada’s oil sands isn’t Exxon Mobil or Chevron. It’s the Koch brothers.” The article was based on a newly-issued two-page report by the far-left International Forum on Globalization. The Post reported:
You might expect the biggest lease owner in Canada’s oil sands, or tar sands, to be one of the international oil giants, like Exxon Mobil or Royal Dutch Shell. But that isn’t the case. The biggest lease holder in the northern Alberta oil sands is a subsidiary of Koch Industries, the privately-owned cornerstone of the fortune of conservative Koch brothers Charles and David.
Actually, nearly all of the tar sands leaseholders are smaller companies that you haven’t heard of–dozens, if not hundreds of them. Koch is not, in fact, the largest leaseholder, but hold that thought.
The Koch Industries subsidiary holds leases on 1.1 million acres — an area nearly the size of Delaware — in the oil sands region of Alberta, Canada, according to an activist group that studied Alberta provincial records. The Post confirmed the group’s findings with Alberta Energy, the provincial government’s ministry of energy. Separately, industry sources familiar with oil sands leases said Koch’s lease holdings could be closer to two million acres.The company with the next biggest collection of oil sands leases is Conoco Phillips.
This is sheer misinformation, based on a ridiculous chart that IFG included in its report. IFG compared Koch’s ostensible holdings with those of three American oil companies, none of which is a major tar sands player:
The IFG folks apparently were too lazy to check on any other companies’ leaseholds, and the Post reporters obviously don’t understand that the big oil companies (Koch is not a big oil company) are not the biggest players in Alberta. I spent a few minutes on the Province of Alberta site that is IFG’s source. This map shows Koch’s leaseholds, which are tan colored:
This map shows the leaseholds of Canadian Natural Resources, Ltd., which are obviously much more extensive. Probably there are other companies that also have more acres under lease than Koch, if anyone has the time to spend on the Alberta web site:
So the fundamental point of the Post story, which relied uncritically on a goofball far-left report, is dead wrong. Moreover, the Post story itself acknowledges that the tar sands encompass 35 million acres, so Koch’s 1.1 million comprise less than 3% of the total. The whole point of this exercise is to make the Keystone Pipeline all about Koch, and that premise is implausible from the start.
But there is much more. The Post more or less endorses IFG’s theory that the Keystone pipeline somehow would benefit Koch, even though the Post notes that there is zero evidence to that effect:
Koch’s oil production in northern Alberta is “negligible,” according to industry sources and quarterly publications of the provincial government. Moreover, Koch has not reserved any space in the Keystone XL pipeline, a process that usually takes place before a pipeline is built. The pipeline also does not run anywhere near Koch’s refining facilities. And TransCanada, owner of the Keystone routes, says Koch is not expected to be one of the pipeline’s customers.
Given those facts, why is the Post indulging the left-wing fantasy that the Keystone Pipeline is all about Koch? I would add this, from Wikipedia: the Athabasca Oil Sands planned production through 2024. Koch isn’t even on the list. Zero. Nada:
And that still isn’t the worst of it. The new report by IFG, on which the entire Post story is based, merely supplements another report that IFG produced last October. The only change in the current report is that it reduced the estimate of Koch’s Alberta leases from 2 million acres to 1.1 million acres. But last October’s IFG report was a laughingstock. I wrote about it here. The astonishing thing about the IFG report is that it admitted that the Keystone Pipeline will damage Koch’s economic interests. Keystone would create competition for Alberta oil, raising the price of oil that Koch buys in the Midwest for its Pine Bend refinery. The original IFG report admitted that this would cost Koch $120 billion! Now, that is a stupid number based on a 50-year projection. But still, the basic point is correct: the Keystone Pipeline would hurt Koch Enterprises economically, which is why Koch has never come out in favor of the pipeline or lobbied on its behalf.
The IFG report hypothesized that despite this $120 billion hit, Koch would come out ahead in the long run–the very long run!–by selling two million acres worth of Alberta oil. Just one small problem: they forgot to consider the fact that the size of the Keystone Pipeline, 830,000 barrels per day, limits the speed with which Koch can recoup its $120 billion loss. As I calculated in my post, it would take 476 years for Koch to break even, using IFG’s own numbers. Now that IFG has reduced its estimate of Koch’s leasehold acreage by one-half, it will take Koch just about 1,000 years to break even if the Keystone Pipeline is constructed–again, using IFG’s own assumptions.
These facts caused a considerable amount of hilarity at IFG’s expense last October, and the Post reporters could have found out that the IFG report was a joke in about five minutes if they knew how to use Google. But maybe they don’t; or maybe they were too blinded by ideology to bother with the facts. Notwithstanding that they knew they were dealing with a disreputable source:
The material about Koch and its oil sands leases has been provided to The Post by Victor Menotti, who was arrested during the anti-WTO demonstrations in Seattle back in November 1999.
That’s obviously a source that you don’t need to check!
Why would the Washington Post embarrass itself by republishing a thoroughly discredited attempt to link the Koch brothers to the Keystone Pipeline? Because that is a Democratic Party talking point, and the Post is a Democratic Party newspaper. But the truth is a little worse than that.
Who is Post reporter Juliet Eilperin? Among other things, she is married to Andrew Light, who writes on climate policy for the Center for American Progress. The Center for American Progress is an Obama administration front group headed by John Podesta, who is a “special advisor” to the Obama administration. CAP’s web site, Think Progress, has carried out a years-long vendetta against the Koch brothers that has focused largely on the environment. Ms. Eilperin’s conflict in writing about environmental issues has already been a subject of controversy at the Post. The paper’s ombudsman should examine this latest example of Ms. Eilperin throwing facts to the winds in her eagerness to promote her (and her husband’s) far-left agenda.
UPDATE: The authors of the Post article have tried, ineffectively, to respond; I reply to them here.
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