Category Archives: Koch Industries

Coronavirus, Covid 19, ExxonMobil, Fossil fuel industry lobby, Keeping Watch on Earth News, Koch Industries, Oil and gas industry, Stay-at-home

US critics of stay-at-home orders tied to fossil fuel funding

ExxonMobil, Koch and Mercer family are past funders of critics of stay-at-home orders as fossil fuel industry struggles amid lockdowns

ExxonMobil refinery in Baytown, Texas. Photograph: Jessica Rinaldi/Reuters
The Guardian, by Emily Holden, 21 May 2020

Dozens of individuals and groups urging states to reopen amid the Covid-19 pandemic have historical financial ties to coal and oil and gas companies and conservative billionaires who have invested in climate disinformation.

Past funders of the current critics of stay-at-home orders include the bankrupt coal company Murray Energy and oil giant ExxonMobil, as well as Koch and Mercer family foundations, according to DeSmog, a group that tracks the money behind anti-climate-action campaigns.

Some of the contributions tallied are recent and others are at least five years old or older. ExxonMobil, for example, had broken ties with two of the groups in this story by 2006. There is no evidence that these companies and foundations are funding ongoing campaigns to reopen businesses.

But Brendan DeMelle, executive director of DeSmog, said the “information echo chamber” of interests downplaying both the climate crisis and the pandemic would not be what it is today without fossil fuel funding.

“While we don’t have direct evidence of specific grant money going for Covid denial, none of these operations would exist without their support over the years,” DeMelle said.

Donations to not-for-profit thinktanks are nearly impossible to track in real time because of a lag in reporting. It could take years to reveal which interests are currently funneling money to the groups helping to organize and expand shutdown protests. Even then, much of the funds could be hidden, donated anonymously through third-party not-for-profits, DeMelle said.

But DeSmog’s research shows many of the calls to end stay-at-home orders are coming from people associated with a wide-ranging network of organizations that together seek to limit the power of government and thwart intervention in business. That web of thinktanks was built years ago on contributions from the fossil fuel industry and conservative philanthropists.

Now, the fossil fuel industry is struggling amid government lockdowns aimed at preventing the spread of the coronavirus, and allowing people to move freely and return to work would help the sector by boosting energy demand.

As Donald Trump has advocated for a quicker reopening, often against the recommendations of his expert advisers, Republican voters’ views on how to handle the coronavirus have shifted substantially.

Just 43% say it is more important for the government to address the spread of the virus than the economy, down from 65% about a month ago. 

Trump’s calls for a quicker return to regular life have grown in popularity as they have been echoed throughout conservative media, often backed by thinktanks connected to the oil and coal industries.

In Wisconsin, where people have protested against a stay-at-home order, the Koch-backed group Americans for Prosperity (AFP) filed an amicus brief with the state supreme court challenging the authority of the governor and the health department to continue to require people to stay home without sign-off from the Republican-controlled legislature. The court last week struck down the state’s order, calling it a “vast seizure of power”.

Charles Koch, the 20th-richest billionaire in the world, runs Koch Industries, which is involved in oil operations and energy-intensive industries. He and his late brother, David, have funded a network of conservative thinktanks.

Phil Kerpen, a Koch political operative, has argued that lockdowns are “unscientific”, and “medieval” and don’t save lives. Kerpen is president of American Commitment, a group that through 2016 has received at least $6.9m from Freedom Partners, which is partially funded by the Kochs, according to DeSmog. He was previously vice-president of AFP until 2012.

An AFP spokesman said the group has been “unambiguous” in its position that “the choice between full shutdown and immediately opening everything is a false choice”, and that it is working with officials and businesses to develop standards to “safely reopen the economy without jeopardizing public health”.

“Past grants do not define our position on reopening the economy – to suggest otherwise is disingenuous,” the AFP spokesman said. “None of the grants referenced have anything to do with stay-at-home orders and some of them were made many years ago.”

The Washington Post has reported that the Convention of States, a project launched in 2015 with money from the family foundation of the billionaire Republican donor Robert Mercer, has helped to coordinate activism against the stay-at-home orders around the country.

The conservative thinktank the Manhattan Institute – which over the years has taken at least $1m from ExxonMobil through 2018, according to the environment group Greenpeace USA, as well as $3.2m from Koch foundations and $2.2m from the Mercer Family Foundation – has published commentary questioning the value of shutdowns.

Brian Riedl, writing in the Manhattan Institute publication City Journal, called the shutdowns unsustainable, saying just a few months “will cost the government and the economy trillions of dollars”.

An ExxonMobil spokesman, Casey Norton, noted the company had not contributed to most of the groups in this story for years and said it was not pushing to lift stay-at-home orders.

“We continually evaluate our memberships and participation in organizations, and we do not contribute to organizations if we are not actively involved,” Norton said.

“As for return to work, our focus right now is on ensuring the safety and health of our entire workforce and to do our part to limit the spread of the novel coronavirus in the community.”

The Daily Caller, a news organization that has received $3.5m through 2017 from Koch foundations through its non-profit, has run articles suggesting Democrats want to kill the economy to keep Trump from getting re-elected.

“The mainstream media, which works for the Democrat party, wanted us shut down more, and for longer,” said opinion contributor Ron Hart.

Often, funding by the fossil fuel industry is less obvious and more difficult to follow. Bits and pieces of financial connections are revealed in regulatory and court filings, but many are hidden behind dark money groups.

One shutdown critic, author Alex Epstein, runs the for-profit thinktank the Center for Industrial Progress. Epstein has said his clients include the president of the Kentucky Coal Association and thecoaltruth.com, a project DeSmog links to employees of Alliance Coal.

Epstein in a podcast compared the coronavirus to the seasonal flu and said “the purpose of the government is not to extend people’s lives. It’s to leave us free to live our lives as we judge best.”

Epstein told the Guardian his clients pay him “solely to advise them on *their* messaging”, and that “none of them have any influence on what I say publicly, on this or any other issue”.

Other critics of reopening are connected with the Competitive Enterprise Institute, the American Council for Capital Formation and the Heartland Institute.

Chris Horner, a former fellow at CEI, in an op-ed in the Washington Times in March warned that “the current ‘coronavirus economy’ could become legally mandated, with no recovery permitted but only worsening, in the name of climate change”. Horner received funding from the coal company Alpha Natural Resources, according to a bankruptcy filing.

Joel Zinberg, of CEI, and Richard Rahn – who is chairman of the Institute for Global Economic Growth and board member of ACCF – have also criticized stay-at-home orders. Rahn has called Covid-19 the “Chinese Communist party virus”.

CEI received $2.1m from ExxonMobil through 2005 and has taken $200,000 from Murray Energy more recently. ACCF has gotten $1.8m from ExxonMobil through 2015 and $600,000 from Koch groups through 2015.

ACCF as an organization “has taken no position on the stay-at-home orders or any prospective timeline for reopening the economy”, said the group’s CEO, Mark Bloomfield.

The Heartland Institute, which denies the severity of anthropogenic climate change, has received $6.7m through 2017 from the Mercer Family Foundation, as well as $130,000 from coal company Murray Energy. The group received $25,000 from a Koch foundation for one specific project and got money from ExxonMobil until 2006.

A Heartland spokesman, Jim Lakely, has argued “leftists” are “stoking Covid-19 panic” and has called lockdown orders unconstitutional.

“What’s the time limit on being labeled ‘Koch-funded’ or ‘Exxon-funded’? A decade? Two? Also, who cares?” Lakely said. He did not respond to questions about Mercer funding.

Climate change denial, Koch Industries, Oil Industry

Koch Industries – from Fred Koch’s John Birch Society to Charles’ & David’s climate change denial as far back as1991

Christopher Leonard’s New Book Puts an Ever-Expanding ‘Kochland’ on the Map

Repost from DeSmog, by Sharon Kelly, August 16, 2019

Kochland book cover over Pine Bend refineryChristopher Leonard’s new book, Kochland: The Secret History of Koch Industries and Corporate Power in America, begins, appropriately enough, with an FBI agent, who is investigating criminal activity by the company, standing in a field with a pair of binoculars, trying to catch a glimpse of the daily operations of a company that prizes secrecy.

Koch Industries was under investigation for theft of oil from the Osage and other Indigenous nations. Walking into the company’s office building involved passing through security checkpoints, Leonard explains, so numerous that one investigator later told Leonard that it “reminded him of traveling to CIA headquarters in Langley, Virginia.”

Through exhaustive reporting and extraordinary interviews with past and current company executives, including some turned whistleblower, Kochland offers readers a view far larger than can be seen through binocular lenses, walking readers past those layers of security checkpoints and into the inner workings of an institution that has for decades tirelessly built itself into practically all American lives, while largely evading accountability or transparency.

While Charles and David Koch’s political operations have been the subject of powerful investigative reporting by the New Yorker‘s Jane Mayer, author of the landmark book Dark Money, and numerous others, Leonard probes into the business that not only funds the Koch political machine, but also represents the clearest embodiment of the Kochs’ market fundamentalist political philosophy in action.

The Invisible Elephant in the Room

In 1961, when Charles Koch joined his father Fred — a founder of the John Birch Society who had, as Mayer reported, previously helped Hitler and Stalin build out their oil refineries, Koch Industries, was generating $3.5 million in profit a year, Leonard writes.

By the end of the Obama administration, company had grown enough to leave Charles and David Koch with personal fortunes of $81 billion (contrasted against Bill Gates’ $81 billion). Koch Industries says its workforce now numbers 130,000 people worldwide, roughly half of those in the U.S., and that it operates today in 60 countries.

As much as it is mammoth — its “annual revenues are larger than that of Facebook, Goldman Sachs, and U.S. Steel combined,” Leonard told NPR — if Koch Industries is the elephant in the room, it has sought to master the art of being a virtually invisible one.

That inconspicuousness is built into its business model. The company invests little in consumer brands and largely acts as industrialization’s middleman, churning raw fossil fuels into not only gasoline at its Pine Bend refinery in Minnesota, but also into the ingredients that become our buildings, our clothing, and other items that we may not know about because even those who closely track the Kochs’ politics have been unable to trace (are they involved with fracking, for example? A definitive answer is surprisingly hard to come by, says Koch Docs director Lisa Graves).

Koch Industries is also omnipresent in the agricultural machine that, in Leonard’s words, has become “one immense machine that laundered energy from fossil fuels into food calorie energy that humans could eat,” thanks to natural gas–based fertilizers. Not only does it manufacture those fertilizers, it produces livestock feed, cattle, and even the disposable plate you might eat your meal from.

Leonard describes how Charles Koch sought to grow and harness the entrepreneurial spirit of his management staff by treating them like small business owners, attuned not to performance metrics or budgets but directly to the company’s profits and losses — with the key difference being that the privately held Koch Industries, not workers or management, are reaping the profits.

“What resulted was a kind of perpetual motion machine,” Leonard writes of one era in the company’s history, “a company that grew and then cited that growth as justification to grow faster.”

The 704-page book offers an inside-the-fenceline view of how that company has operated and grown over the years, including a blow-by-blow account of how Koch Industries sought to break the back of a refinery workers’ union in the 1970s. Leonard presents readers with a riveting narrative of “the war for Pine Bend,” including helicopter airlifts and the apparent attempted sabotage of the refinery via a runaway diesel train engine.

Shrouded in Secret, Beyond Consumer Reproach

In Kochland, it seems, the only form of accountability that executives recognize as important comes from business losses.

As a private firm, Koch Industries faces none of the reporting requirements that publicly traded companies must meet — Leonard recounts how during a 1989 deposition, Charles Koch was forced to reveal sales and profit figures, which Leonard writes were “considered top secret” by the company, but for a publicly traded firm, a widely available set of numbers.

Koch Industries

Koch Industries eludes consumer boycotts by selling products that are inescapably entwined in the infrastructure of daily American life. As much as any single organization, Koch Industries has made any problems it is responsible for — intentionally, in Leonard’s telling — structural, problems that cannot be addressed through individual consumer action.

When it comes to environmental accountability, Leonard diagnoses structural issues inside the company in the 1990s that facilitated law breaking. In a fascinating chapter, Leonard offers readers an account of Koch Industries deliberately and repeatedly spewing contaminated wastewater into wetlands in Minnesota, a major violation of environmental law to which the company pled guilty in 1999.

“The company learned that violating regulations could put a dent in its profit margins, and responded accordingly,” Jennifer Szalai wrote in a New York Times review of Kochland. “It now imprints upon employees the need for ‘10,000 percent compliance’: obeying 100 percent of the laws 100 percent of the time.”

That narrative isn’t a perfect fit for the facts — just a year later, Koch pled guilty to falsifying documents and settled with the Justice Department for $20 million over benzene pollution in Corpus Christi, Texas, and an attempted cover-up, according to Greenpeace.

And 10 years later, a Koch subsidiary reached a deal with the U.S. Environmental Protection Agency and Department of Justice over environmental law-breaking that spanned seven states. Those violations resulted in a $1.7 million fine and $500 million in repair obligations, Greenpeace adds as it details both accidental spills or leaks and toxic pollution (at times with the permission of state regulators) that have sickened those living around the plants.

If anything, what Koch Industries seemed to learn from costly environmental fines and settlements is that it can be cheaper to change the law today than it is to pay the fine tomorrow. Leonard details how, for example, the Kochs began, via a nonprofit group, to sponsor free educational events for judges, hosted in luxurious locales, which organizers said by 2016 had attracted more than 4,000 state and federal judges from every part of the country.

Power in Politics

The Kochs’ power as political actors is, of course, notoriously non-transparent — which can conceal not only the mechanisms they use for leverage, but also the degree of self-interest that may motivate their work.

David Koch
David Koch speaking at the 2015 Defending the American Dream Summit at the Greater Columbus Convention Center in Columbus, Ohio. Credit: Gage Skidmore, CC BY–SA 2.0

While the Kochs have labored strenuously to market themselves as sincere ideological Libertarians, defending personal freedom (for property owners, at least) against government encroachment, their agenda is interwoven with threads of visible self-interest.

From their earliest forays into politics — like David Koch’s failed 1980 Libertarian party vice-presidential bid as part of a campaign that championed abolishing the Department of Energy — the political platforms they support consistently seem to include planks that would benefit the Kochs’ business. (And in cases where their business interests and ideologies might conflict, it may be worth bearing in mind that the Kochs who Leonard describes are adept at strategizing with a long-range view, accepting short-term losses at times in the pursuit of longer-term gains.)

That long-range strategy extends to the Koch network’s stance on climate change — and here, Mayer credits Leonard’s book with breaking new ground, demonstrating that when it comes to opposing action on climate change, “their role went as far back as 1991.”

“If there is any lingering uncertainty that the Koch brothers are the primary sponsors of climate-change doubt in the United States, it ought to be put to rest by the publication of “Kochland,” Mayer wrote in the New Yorker. “Magnifying the Kochs’ power was their network of allied donors, anonymously funded shell groups, think tanks, academic centers, and nonprofit advocacy groups, which Koch insiders referred to as their ‘echo chamber.’”

Koch Docs, an online archive launched August 9, has collected many of the documents used by Leonard and others to understand how Charles Koch and his company operate.

‘Block and Tackle’ Under Trump

When it comes to the Trump administration, the focus of the book’s final chapters, Leonard compares the Koch strategy to a “block and tackle” system — in the sense that by working to block certain policies and offer the administration assistance tackling others, it’s possible to create a path of least interference for the administration that runs right where Koch desires.

“I’m more excited about what we’re doing and about the opportunities than I’ve ever been,” Leonard quotes Charles Koch as saying during a January 2018 meeting of Koch network donors in Palm Springs. “We’ve made more progress in the last five years than I had in the previous fifty.”

While Kochland goes a long way towards letting readers peer inside the windows of Koch Towers, much remains unknown about the organization, despite the efforts of Leonard and many others. But Kochland chips away at a significant portion of the opaque layer that’s shielded the Kochs from scrutiny.

Leonard’s work leaves open a question for readers — once you’ve had a glimpse inside the Kochs’ private capitalist empire, is it a place you want to live?

Because when it comes to both politics and consumerism, Leonard’s book suggests that an ever-expanding Kochland just might become inescapable.

Main image: Kochland book cover over original image of the Pine Bend oil refinery, one of many Koch businesses profiled in Kochland.  Credit: Tony Webster, CCBY–SA 2.0

Canadian oil production, Koch Industries, Tar sands crude

Tar-Sands oil industry in trouble in Canada as Koch Brothers disinvest

Repost from The Energy Mix

Koch Brothers Abandon Alberta Tar Sands/Oil Sands

By Geoffrey Morgan, August 16, 2019, Full story: Financial Post
jasonwoodhead23/flickr

Wichita, Kansas-based conglomerate Koch Industries has sold off its substantial position in the Canadian tar sands/oil sands, selling thousands of hectares of land to Cavalier Energy Inc., a subsidiary of Calgary-based Paramount Resources Ltd., the Financial Post revealed Wednesday.

“Koch, one of the world’s largest private companies owned by American billionaires and Republican donors Charles and David Koch, has also abandoned the licences it did not sell in the transaction with Paramount and has been allowing its leases in the play to expire,” the Post reports.

The news lands just days after tar sands/oil sands analysts bemoaned the poor response the industry is receiving from investors, despite its continuing efforts to cut costs.

“The majority of Koch Oil Sands licences have been transferred to Paramount Resources Ltd.,” Alberta Energy Regulator spokesperson Shawn Roth said in an email. “All of the remaining licences for well sites have been abandoned, which means they have been permanently sealed and taken out of service.”

A Koch subsidiary, Flint Hills Resources, still owns oil storage tanks in Hardisty, Alberta and runs U.S. refineries that process diluted bitumen from Alberta. “However, the company confirmed it had sold down its upstream oilsands holdings and surrendered expired leases in the play,” the Post states.

“Those leases, which were held by Koch Oil Sands Holdings, have varied over the years,” wrote spokesperson Rob Carlton. “These recent transactions are merely a reflection of the opportunities that are currently available in the marketplace and our desire to prioritize other initiatives.”

The Post lists a half-dozen international fossils that have abandoned the tar sands/oil sands since 2017, leaving Canadian firms like Suncor Energy Inc., Canadian Natural Resources Ltd., Cenovus Energy Inc., and Athabasca Oil Corporation to solidify their holdings. While the Post blames the departures on a lack of export pipeline capacity and price pressure from fracking fields in the U.S. Permian Basin, the analysis earlier this week pointed to intense competition from efficient, affordable renewable energy and electric vehicles that is rapidly eroding future demand for oil as a transportation fuel. “Koch is not the only company allowing leases in the oilsands to expire as the pace of development in the play has slowed in recent years,” the Post reports. “In a move to cut costs, MEG Energy President and CEO Derek Evans said on his company’s recent earnings call that his company would allow leases on its longer-term holdings to expire, rather than pay escalating rents on the land.”