Koch Brothers Are the Largest Land Owners of Canada's Tar Sands

By Ari Phillips, ThinkProgress

21 March 14

he Koch Brothers are known for many things — their vast financial empire, their conservative political ideology, their active political involvement, their support of the Keystone XL pipeline — but their Alberta, Canada land ownership has not been as widely discussed. A Washington Post feature has brought this subject back to attention as the Keystone XL debate heats up and discussion over the relationship between the Koch Brothers and their Republican allies takes on even greater significance in an important election year.

According to the Washington Post, which uses a report from the activist group the International Forum on Globalization as a foundation, a Koch Industries subsidiary holds leases on 1.1 million acres in the northern Alberta oil sands, an area nearly the size of Delaware. The Post confirmed the group’s findings with Alberta Energy, the provincial government’s ministry of energy.

“What is Koch Industries doing there?,” asks the Washington Post. “The company wouldn’t comment on its holdings or strategy, but it appears to be a long-term investment that could produce tens of thousands of barrels of the region’s thick brand of crude oil in the next three years and perhaps hundreds of thousands of barrels a few years after that.”

In 2012, InsideClimate News reported on the Koch family’s long-term investments in Canada’s heavy oil industry, calling it an essential part of the company’s massive growth since 1959. In a wide-ranging analysis, InsideClimate News found that Koch Industries has been involved with almost every aspect of the tar sands industry, from mining bitumen to transportation, exportation, distribution and, of course, refining the petrochemicals — a large part of their empire.

The report found that Koch Industries is “one of Canada’s largest crude oil purchasers, shippers, and exporters, with more than 130 crude oil customers,” and is also responsible for about 25 percent of oil sands crude imports into the U.S., for use at its refineries.

In their recent report The Billionaires’ Carbon Bomb about the Koch Brothers and the Keystone XL pipeline, the International Forum on Globalization (IFG) contends that Koch Exploration Canada, the Koch Industries subsidiary that buys and sells land for energy development, could profit by up to $100 billion with the construction of the Keystone XL pipeline. While this number is up for debate, it is clearly not a losing investment. And at the very least the construction of the Keystone XL pipeline would lower transportation costs of getting the oil to refineries, increasing the production margins of those refineries, whether Koch-owned or not.

“The biggest way Koch could benefit from Keystone is by the pipeline’s acting as the ‘keystone’ of oil industry strategy to increase the ‘takeaway’ capacity for producers of Canadian crude, whereby getting more oil to more lucrative markets, and ending the deep discounts on Canadian crude currently glutting markets,” IFG’s Victor Menotti told the Washington Post.

In Alberta, like in many places in the U.S., owning the land and owning the mineral rights beneath the surface are different things. According to the Alberta Department of Energy, 81 percent of the surface mineral rights in the province are owned by the provincial Crown, with the remaining 19 percent owned by National Parks, First Nations, or individuals or corporations that acquired the land in the 1800s before the modern rights went into effect.

Koch Industries has held the line that they have no financial stake in the Keystone XL Pipeline and “are not party to its design or construction,” or “a proposed shipper or customer of oil delivered by this pipeline.”

Most people in the path of oil and gas development find themselves helpless in the face of the industry’s deep pockets and political affiliations. Landowners and farmers are left to deal with the environmental and health impacts of nearby fracking and drilling, often polluting or drying up their water sources. It would seem that the Koch brothers would be happy to sell their land away for a little profit — and with little risk of physical or psychological harm. They doubtlessly have land to spare. And until the true impacts come to their own backyard — as they recently did for ExxonMobil CEO Rex Tillerson outside of Dallas — that isn’t likely to change.