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Rep. Waxman Again Requests Investigation of Koch Connection to Keystone XL Pipeline

Waxman cites legal papers filed by a Koch subsidiary, uncovered by InsideClimate News, in which it claimed a 'substantial' interest in the pipeline.

Oct 18, 2011
(Page of )
Rep. Henry Waxman

Editor's note: This version of the story adds comment from Koch Industries.

Rep. Henry Waxman (D-Calif.) today renewed his request that the House Committee on Energy and Commerce investigate the role of Koch Industries in the Keystone XL pipeline.

Waxman, the ranking minority member of the committee, made his request in a letter to committee chairmen Fred Upton (R-Mich.) and Ed Whitfield (R-Ky.).

Waxman first asked for an investigation in May, when the committee was holding hearings on the Keystone XL, a controversial Canada-to-Texas oil pipeline that would allow as much as 830,000 barrels a day of a particularly dirty form of oil, locked up in Alberta's tar sands, to reach refineries in the Gulf of Mexico.

The controversy over the Kochs and the pipeline was sparked by an InsideClimate News report from February. That analysis, also published on Reuters.com and later cited by various news organizations, found that Koch Industries is deeply involved in the Canadian oil sands trade and is well positioned to benefit if more heavy crude is exported to the United States. The company denied the report, and Waxman subsequently made his own inquiries.

"When I first raised this issue in May, representatives from Koch denied any interest in the pipeline and Chairman Upton called the idea that there could be a link between Koch and the pipeline an 'outrageous accusation' and a 'blatant political sideshow,'" Waxman wrote in his letter. "Recently, however, I have become aware of evidence that appears to contradict the assertions of the Koch representatives and Chairman Upton."

Waxman cites legal papers that a Koch Industries subsidiary, called Flint Hills Resources Canada LP, filed with the Canadian government, recently uncovered by InsideClimate News, in which the company claimed "a direct and substantial interest" in the Keystone XL.

"There appears to be a direct contradiction between what Koch representatives told me and the assertion by the Koch subsidiary," Waxman wrote. "If members of the Committee were misled by Koch, that is a serious matter that deserves prompt and thorough investigation."

In an email to InsideClimate News, Philip Ellender, president and chief operating officer at Koch Companies Public Sector, again denied that Koch has any interest in Keystone XL. "As previously stated, Koch Industries has no financial stake in the Keystone pipeline," he said. "We are not party to its design or construction, we are not an investor in the project, and we are not a proposed shipper or customer of oil delivered by this pipeline."

Calls to the office of Rep. Upton were not returned. Rep. Whitfield was traveling today and was not able to comment by deadline.

A decision on the presidential permit application that would allow TransCanada to build the pipeline is pending with the State Department. It has been under review for more than three years, and a decision is expected by the end of the year.

A former centrist on environmental issues, Rep. Upton has given the pipeline project full support, co-sponsoring a bill that gave the White House a Nov. 1 deadline to finish its review of Keystone XL project. The bill passed the House but was ignored by the Senate.

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 on the House committee when the 112th Congress convened in January.

L.A. Times reporters found that Koch donations to panel members outpaced even those 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.

The Koch brothers own nearly all of Wichita, Kan.-based Koch Industries, the second-largest private company in the United States. The energy and manufacturing conglomerate earns an estimated $100 billion in annual revenue from its network of subsidiaries—a mix of oil, gas, pipeline, chemical, fertilizer and paper and pulp companies. In addition to its Canadian operation, Koch's Flint Hills subsidiary operates oil refineries in Alaska, Texas and Minnesota as well as a dozen fuel terminals in the Midwest and Texas.

The Kochs have donated millions to Republican candidates and conservative movements, bankrolling groups involved in Tea Party causes and in campaigns to deny climate change science and the need for cleaner energy. Through their Flint Hills subsidiary, they underwrote the failed 2010 ballot initiative that would have suspended California's landmark law capping greenhouse gases.

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