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

Rep. Waxman is seeking answers from the Kochs, after a SolveClimate News article first exposed the brothers' deep involvement in the oil sands industry

May 25, 2011
Rep. Henry Waxman

WASHINGTON—Rep. Henry Waxman's attempts to find out if a proposed controversial Canada-to-U.S. Gulf Coast oil sands pipeline will benefit Koch Industries appears to have hit a dead end.

At least for the time being.

Representatives for billionaire brothers and oil magnates Charles and David Koch — major donors to GOP elections and influential conservative organizations — are evidently stonewalling the California Democrat about their possible financial interest in seeing the permit approved for TransCanada's proposed $7 billion Keystone XL pipeline.

Two powerful House Republicans told Waxman they are not interested in pursuing any additional inquiries with Koch Industries.

That refusal prompted Waxman to try another tactic during a Monday afternoon hearing on Capitol Hill. He offered to expand his investigation to include all energy companies that might benefit from Keystone XL so as not to single out Koch.

"I have no objection to asking other companies about their interests in tar sands," Waxman, the top Democrat on the House Energy and Commerce Committee, said during an Energy and Power Subcommittee hearing. "What I do object to is protecting Koch from legitimate scrutiny."

"This pipeline and the legislation that supports it will enable the oil companies to charge American consumers more for their gasoline, while increasing carbon pollution and endangering precious water supplies," he continued. "We know who will lose. We also need to find out who will benefit."

Rep. Fred Upton, the Michigan Republican who chairs the Energy and Commerce Committee, called Waxman's queries a "blatant political sideshow."

Subcommittee Chairman Ed Whitfield of Kentucky did not directly respond to Waxman's request to broaden the inquiry beyond Wichita-based Koch. But the Republican did say it was unfair to focus on one company.

In February, the Los Angeles Times tallied up what kind of influence Koch might have on the House Energy and Commerce Committee via campaign contributions. Republicans, who gained a resounding majority in the lower chamber after the November midterm elections, started calling the shots at the House committee when the 112th Congress convened in January.

L.A. Times reporters found that Koch donations to panel members outpaced even that of mega-energy companies such as Exxon Mobil. Records show that Koch and its employees gave $279,500 to 22 of the energy committee’s 31 Republicans and $32,000 to five Democrats.

Legislation Attracts Two Democrats

"This is not about personalities," Whitfield said about Keystone XL and legislation he is co-sponsoring to set a deadline for a "yes" or "no" answer on its construction. "This is about a project and its benefit or lack of benefit to the American people."

Whitfield is among 13 co-sponsors of a bill penned by GOP Rep. Lee Terry of Nebraska and officially introduced after Monday's hearing. Upton is also a prominent co-sponsor.

Terry's measure has also attracted support from two Democrats, Reps. Mike Ross of Arkansas and Gene Green of Texas.

The Cornhusker State is one of half a dozen states the 1,375-mile U.S. section of the underground pipeline would cross through on its entire 1,702-mile proposed path from the tar sands mines in TransCanada's home province of Alberta to Gulf of Mexico oil refineries. The other states are Montana, South Dakota, Kansas, Oklahoma and Texas.

In a nutshell, what is being called The North American-Made Energy Security Act of 2011 (H.R. 1938) insists that the U.S. State Department issue a decision about granting a presidential permit for the Keystone XL by an evidently arbitrary Nov. 1 deadline.

Other GOP co-sponsors of the bill include Reps. Cory Gardner of Colorado, David McKinley of West Virginia, Cathy McMorris Rodgers of Washington, Sue Myrick of North Carolina, Tim Murphy and Joseph Pitts of Pennsylvania, Steve Scalise of Louisiana, John Sullivan of Oklahoma and Greg Walden of Oregon.

Due to the international nature of the 1,702-mile Keystone XL, Secretary of State Hillary Clinton's team is tasked with granting a thumbs-up or thumbs-down on whether the pipeline is allowed to cross the U.S.-Canadian border. The Canadian National Energy Board approved its portion of the project in March 2010.

When the State Department released the revamped version of its Keystone XL environmental evaluation in mid-April, the timeline seemed to indicate Clinton would be making a final decision sometime before the end of the year.

TransCanada already operates phase one of the project, simply called Keystone. Last June, that pipeline began carrying heavy crude oil from Alberta's tar sands to its southern terminus in Cushing, Okla., and its eastern terminus in Patoka, Ill.

For Keystone XL, the pipeline giant has proposed building and operating infrastructure designed to pump up to 900,000 barrels of heavy crude daily.

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