How Little We Know About Heavy Tar Sands Oil

Author
George Zornick

When the Exxon Pegasus pipeline ruptured Friday in Mayflower, Arkansas, tens of thousands of gallons of diluted bitumen were sent forth into a residential neighborhood, and 22 homes had to be evacuated. Since this is the same sort of oil that would be carried by the Keystone XL pipeline, were it to be built, the Arkansas spill is appropriately spurring a conversation about safety. Is Keystone also going to lead to more spills? (There have been twelve on the completed portions of the pipeline already.) And how dangerous is this stuff spilling all over the ground?

But this conversation must start with a simple fact: There are too many known unknowns about diluted bitumen. We don’t know exactly what’s in it, and the government hasn’t fully studied how safe it is to transport.

Bitumen is a form of petroleum that occurs in a solid, or semi-solid, state: It can be sludgy or even be brittle, like rocks. That’s what is buried deep in the Canadian oil sands. In order to transport this bitumen through thousands of miles of pipelines so that it can be refined, it has to first be diluted, so it flows like a liquid.

That diluent is usually a natural gas liquid—but we don’t know for certain what it is. The industry considers its diluent formulas proprietary information and won’t share it with regulators.

When the State Department released its first Environmental Impact Statement on Keystone XL, the EPA gave it an “inadequate” rating in part because it didn’t have any specific information on diluents. “We believe an analysis of potential diluents is important to establish the potential health and environmental impacts of any spilled oil, and responder/worker safety, and to develop response strategies,” the EPA said at the time.

Yet, the second and final Enviromental Impact Statement of Keystone XL released recently by the State Department still had no specific information on dilbit diluents, and evaded the question with some generalities:

The exact composition of the dilbit is not publicly available because the particular type of bitumen and diluents blend produced is variable and is typically a trade secret. The bitumen­ diluent mixture with bitumen from the oil sands is generally similar to heavy sour crude. […]

Although reported information on dilbit releases is scarce in the literature, once diluents and bitumen are mixed together to form dilbit, they behave as a conventional crude oil. Therefore, this assessment has focused on the impact of crude oil in general, but when applicable, evaluated the specific characteristics (i.e. viscosity) of dilbit. The degree of impact can vary depending on the cause, size, type, volume, location, season, environmental conditions, and the timing and degree of response actions.

Researchers and regulators know roughly what’s in dilbit—just not enough. “I think what they don’t know are what the specific chemicals are in any pipeline or any batch, because companies could use different chemicals at different times, depending on what’s cheapest at hand at any one moment,” Carl Weimer, the executive director of the Pipeline Safety Trust, told The Nation.

The composition of those chemicals could greatly influence how the dilbit behaves once spilled—whether it sinks or floats in water, for example. In an emergency clean-up situation, that’s really good information to have.

And what we do know about the danger of tar sands oil is already disturbing. The State Department’s report does focus on the damaging properties of benzene, and notes that “[b]ecause the diluted bitumen crude oils have a significant amount of lighter hydrocarbons added, they tend to have higher benzene concentrations than many other heavy oils.” Benzene, the report states, “was determined to dominate toxicity associated with potential crude oil spills.” Benzene is an unusually toxic chemical that was found in the air after the Enbridge tar sands spill of 2011, and can cause a wide range of severe physical damage to animals, plants and humans.

Please support our journalism. Get a digital subscription for just $9.50!

So the government doesn’t really know what’s in the dilbit once it spills—but it also knows shockingly little about how to prevent these accidents to begin with. Many conservation groups contend, with ample evidence, that tar sands oil leads to more spills because it is “highly corrosive, acidic and potentially unstable.”

The chief regulator of pipelines is the Pipeline and Hazardous Materials Safety Administration. In 2011 Cynthia Quarterman, the agency’s director, appeared before Congress and admitted under questioning from Representative Henry Waxman that her agency had no idea whether dilbit is more dangerous to transport than normal crudes, and had not even studied the question:

REP. WAXMAN: Ms. Quarterman, when PHMSA adopted its basic safety requirements such as establishing maximum operating pressures or setting integrity management requirements, were many US pipelines transporting diluted bitumen? And were any of your regulations developed with the properties of diluted bitumen in mind?

MS. QUARTERMAN: When the integrity management program requirements were first put in place on the hazardous liquid side, I think it was 2000, 2002, there were pipelines in existence that transport diluted bitumen. I don’t believe any study was done at that time of the characteristics of the crude.

REP. WAXMAN: Were your regulations developed with the properties of diluted bitumen in mind?

MS. QUARTERMAN: I don’t believe it was a part of the equation, no.

REP. WAXMAN: Have you received [sic] your regulations to assess whether they adequately address any risks specific to diluted bitumen?

MS. QUARTERMAN: We have not done so.

Since that exchange, Congress passed the Pipeline Safety Act, which was panned by many environmentalists as too weak. The bill didn’t update any regulations to include dilbit transportation, but did mandate that PHMSA study the problem and act, if needed.

The National Academy of Sciences is currently working on that study, and will release its findings this summer. If they find that diluted bitumen is abnormally dangerous to transport, as many other independent researchers have, they will recommend new regulations.

But for now—and for the next several months, and probably years—the government is flying blind about how to transport diluted bitumen. It also doesn’t even know what’s in the stuff once it spills.

That’s crucial context when considering whether to build Keystone XL, which would carry millions of barrels of dilbit across the entire country.

Read George Zornick on new details from the Newtown and Tucson shootings showing how assault weapons and high-capacity magazines increase body counts.

Crude, Dirty and Dangerous

Author
DAVID SASSOON

EVERY day more than one million barrels of oil flow to refineries in the United States from western Canada’s oil sands region. Producers hope to quadruple that amount in the next decade, arguing that oil from a friendly neighbor will deliver an extra degree of national security.

But this oil is no ordinary crude oil, and it carries with it risks that we’re only beginning to understand. Its core ingredient — bitumen — is not pumped from wells but is strip-mined or boiled loose underground.

Industry insiders long considered bitumen to be a “garbage” crude. But now that the light, sweet oil we covet has become more scarce and its price has skyrocketed, bitumen has become worth the trouble to recover. At room temperature, bitumen has the consistency of peanut butter, thick enough to hold in your hands. To get it through pipelines, liquid chemicals must be added to thin it into what’s known as dilbit, short for diluted bitumen.

Last month, the National Transportation Safety Board issued a report that was harshly critical of the federal government’s regulation and oversight of pipeline safety following a spill of more than one million gallons of dilbit into the Kalamazoo River in Michigan in 2010. The accident underscored not only how different dilbit is from conventional oil, but how unprepared we are for the impending flood of imports.

After the dilbit gushed into the river, it began separating into its constituent parts. The heavy bitumen sank to the river bottom, leaving a mess that is still being cleaned up. Meanwhile, the chemical additives evaporated, creating a foul smell that lingered for days. People reported headaches, dizziness and nausea. No one could say with certainty what they should do. Federal officials at the scene didn’t know until weeks later that the pipeline was carrying dilbit, because federal law doesn’t require pipeline operators to reveal that information.

The 2010 spill could have been worse if it had reached Lake Michigan, as authorities originally feared it might. Lake Michigan supplies drinking water to more than 12 million people. Fortunately, the damage was restricted to a tributary creek and about 36 miles of the Kalamazoo, used primarily for recreation, not drinking water.

This close call hasn’t deterred the energy industry from announcing plans to build or repurpose more than 10,000 miles of pipelines to carry dilbit to the United States and global markets. That includes the controversial Canada-to-Texas Keystone XL pipeline, which would pass through the Ogallala aquifer, the nation’s largest drinking water aquifer. It supplies drinking water for eight states and about 30 percent of the groundwater used for irrigation.

The nation’s pipeline network was designed to handle conventional crude oil and is governed by laws and regulations that were written long before the unique risks and hazards associated with dilbit began to emerge. In fact, dilbit is exempt from an excise tax that pays for oil spill cleanups, because the 1980 law that created the tax did not consider bitumen from the “tar sands” to be crude oil.

After the spill, Congress passed new pipeline safety legislation, but it will take years for its modest provisions to have any impact. It does not require pipeline companies to reveal whether their lines are shipping dilbit. And while it does require a study of how dilbit affects pipeline corrosion, the scientists conducting that study met for the first time only last month, and their work is not likely to be completed before new pipelines are built or old ones are repurposed.

The N.T.S.B.’s investigation of the Michigan spill identified “a complete breakdown of safety” at Enbridge, the pipeline’s operator. But it also revealed that pipeline rules are weakly enforced. One telling fact: Enbridge discovered defects in the area where the pipeline eventually ruptured as early as 2005, and reported them to regulators. Yet the company was able to delay making repairs without breaking any rules.

The N.T.S.B. also found that Enbridge’s leak detection system did not work as advertised. The company had said that its sensors could spot a leak and shut down in less than 10 minutes. TransCanada, the company that is building the Keystone XL, makes similar claims. Yet it took operators in Enbridge’s Canadian control room 17 hours to realize their pipeline had torn open. Sensors triggered 16 alarms but operators continued to pump dilbit into the line, believing the problem was an air bubble, until someone in Michigan saw oil on the ground and called Enbridge’s emergency line.

The leak-detection problem is industry-wide. Oil spill data maintained by federal regulators show that over the last 10 years, advanced leak detection systems identified only one out of every 20 reported pipeline leaks. Members of the public detected and reported leaks at four times that rate.

Now that the industry is aiming to fill almost a quarter of America’s domestic oil needs from western Canadian sources, we need a transparent and informed discussion about dilbit’s risks and benefits, up-to-date laws and regulations, and improved leak detection.

The N.T.S.B. chairwoman likened Enbridge employees to Keystone Kops in their handling of the Michigan dilbit disaster. It is a label that could come to apply to the rest of us if we don’t guard against future catastrophe.

David Sassoon is the publisher of InsideClimate News, which published the e-book “The Dilbit Disaster: Inside the Biggest Oil Spill You’ve Never Heard Of.”

James Hansen: The One Thing We Should Be Doing to Prevent Catastrophic Climate Change

The country’s leading climatologist talks about what our future looks like if we continue along with business as usual — and what we could do to prevent catastrophe.

It’s hard to imagine anyone who has done more to further our understanding of the impacts of climate change than Dr. James Hansen. After 46 years working a scientist and climatogolist for NASA’s Goddard Institute for Space Studies, Hansen wasn’t content to simply catalog the dangers facing humanity and our planet — he has been ringing the alarm bell. “On a blistering June day in 1988 he was called before a Congressional committee and testified that human-induced global warming had begun,” the New York Times wrote in a recent story about Hansen. “Speaking to reporters afterward in his flat Midwestern accent, he uttered a sentence that would appear in news reports across the land: ‘It is time to stop waffling so much and say that the evidence is pretty strong that the greenhouse effect is here.’”

Over the next several decades as scientific evidence poured in about the threats from climate change, and as governments — including the U.S. — failed to take any meaningful action, Hansen stepped out of the lab and into the media spotlight. He has participated in climate change protests, including being arrested several times, and has been outspoken about urging the Obama administration to kill the Keystone XL pipeline proposal. He warned that building the pipeline would mean “game over” for the climate.

This week Hansen was awarded the 2013 Ridenhour Prize for Courage from the Fertel Foundation and the Nation Institute. Ridenhour prizes are named in honor of the late Ron Ridenhour, who blew the whistle on the My Lai massacre in the Vietnam War and went on to become an award-winning investigative journalist.

“At a moment when a debate is raging about the treatment of whistleblowers, the Ridenhour Prizes recognize those who put their lives on the line to challenge the status quo,” said Randy Fertel, founder of the Fertel Foundation, which co-sponsors the prizes. “The 2013 winners represent voices who have come forward to speak truth on the most defining issues of our time.”

Hansen recently announced that he is stepping down from his post at NASA. He talked to AlterNet about what he plans to do next, what may be in store for our future, and the most important thing we can do to prevent catastrophic, runaway climate change.

Tara Lohan. First off, congratulations on your Ridenhour Prize for Courage. They selected you for your decades of hard work ringing the alarm bell about climate change. Does it get a little lonely out there for you?

James Hansen: Well, that is an interesting question I have never been asked before. I am a little surprised that the scientific community has allowed us to go so far down the line that it’s almost too late to avoid the rather substantial climate change and practical impacts. It was not surprising at all that the scientific community or at least many people in it objected to my testimony in the late 1980s and was illustrated so well by the article that Dick Kerr wrote in Science Magazine that was called “Hansen vs. the World on the Greenhouse Threat.”

It was interesting because in that article he interviews a lot of people at a meeting, which was described as a “get Hansen” meeting, but in any case, he got the comment from one of the scientists that said, “Well, if there was a secret ballot, a secret vote probably the majority of us would agree that this global warming was underway,” but they weren’t ready to say so yet. And I can completely understand that, in the 1980s it was not yet statistically proven.

But what’s a little disappointing is that we’ve reached a point where we should really be pounding on the desk of leaders and saying, “Hey, you’ve got to do something. You have to do something in a hurry or we’re going to leave our children and grandchildren a situation that’s out of their control. There will be large impacts, which they simply cannot do anything about.” And the basic physics for that is very well understood that the climate system has tremendous inertia, it does not respond quickly as humans or nature applies forces to the system. But now we know those forces, those human made forces — the CO2 amount and how it’s changing is known very precisely. And we know the consequences on the century timescale are going to be enormous. So there’s really no disagreement about that and the fact that we won’t be able to control it.

So in that sense, the answer to your question is that I am disappointed that there aren’t more of my colleagues out there. On the other hand, it’s not that most of them now disagree, I mean those who are in the category of knowing what you are talking about because of relevant expertise, actually say that they’re glad I’m making noises because they think it’s appropriate.

TL: A lot of people in the activist community like to point their fingers at government for a very good reason, but what do you think the scientific community should be doing?

JH: Well, I think the government should be asking the scientific community. We have a National Academy of Sciences that was formed at the request of Abraham Lincoln to advise the government on technical matters, which require scientific expertise. So if the government wants to do something it could ask the Academy to give it a report to provide some guidance and that’s not really happening. Instead, we’re allowing the politics to control the discussion and that then ends up leading to little if any action because politics is not going to allow it simply because there’s such a preference among the fossil fuel industry and the people who are making a lot of money off of it to continue business as usual.

So the politics ends up in a stalemate. The scientific community has issued reports. The major scientific groups like the American Geophysical Union, the American Meteorological Society have pretty strong statements about the fact that humans are causing climate change and there will be consequences. So I’m not sure that it can do a lot more if it’s not asked to provide specific guidance.

TL: Why do you think we are so incapable of taking action when we are presented with the overwhelming scientific evidence?

JH: Well, what I’ve learned in going to several different countries is that the money has a huge influence on national politics not only in the United States but in practically every country in the world. And the fossil fuel industry is the wealthiest industry in the world, so it becomes difficult to get government action without more pressure from the public. And that, in the case of this problem, is something that is really difficult because of the fact of this inertia and delayed response so the public doesn’t see that much happening.

The difficulty is that because of this inertia of the system, we have only realized, the planet has only realized, about half of the effect of the gases that are already in the atmosphere — the rest is still in the pipeline and will occur over coming decades and this century. And that makes it very difficult. The public has many other issues on its mind like feeding their families and important practical issues. If they don’t see a major effect then it’s just not high enough on their priority list.

It’s clear now to the scientific community that we should be doing something and yet we’re not doing much. As I say, we’re almost to the point where it’s going to be unavoidable that we will have significant consequences this century, in the lifetime of today’s young people.

TL: Based on that, where we stand right now, what does our future look like if we continue along the path we’re on?

JH: Well, okay it still depends. If we continue on the path that we’re on, which is continuing to actually increase CO2 emissions, then we’re talking about a different planet by the end of the century in the sense that we could get warming of at least a few degrees celsius which would mean that, among other things, the two biggest effects that I’m concerned with are those that are irreversible. And if we continue on that business-as-usual pathway then the ice sheets are not going to be stable, they’re going to begin to disintegrate rapidly, which will mean sea level rise of many meters. Scientists will argue about how much sea level rise will occur this century in the next 87 years, for some reason the year 2100 is picked as the year we’re trying to estimate the change.

It’s very hard to say when that collapse will occur. It’s like the stock market, if the country has a stupid economic policy then eventually the stock market is going to reflect that with a collapse, but you can’t predict exactly when it’s going to occur. Anyway, in my opinion, we would get multi-meter sea level rise this century. Some other scientists argue that we’ll only get about one meter this century and the multi-meter rise will be next century. But, in either case it means that all the coastal cities would have to be abandoned at some point whether it’s this century or next century and that’s thousands of cities around the world on coastlines. Cities develop from coastlines because commerce was by ships for much of history so that’s one of the irreversible effects.

The other one is the extermination of species. If we begin to slow down emissions by the end of this decade, then we can keep the warming less than two degrees Celsius. In that case, I think most of the species can survive. But if we continue business as usual, the whole century, so that climate zones really shift a large amount so that species have to migrate to a different region in order to survive; then when that’s combined with the other pressures we’re putting on species, the other stresses that we’re causing as humans basically take over the planet, it’s going to mean that a large fraction of species get exterminated, which is another irreversible effect — one which is morally reprehensible.

But the practical thing, many people are not too concerned about sea level rise later this century or species extermination later this century. They are more concerned with climate events that are beginning to happen now. We can see that climate extremes are beginning to increase as expected with a globally warming because the distribution of anomalies from a normal climate is shifting such that the extreme events are more frequent. That’s true both for temperature and for rainfall because the amount of rainfall depends upon the amount of moisture in the atmosphere, which increases as the planet gets warmer.

So you get more extreme rain events when you do get rain, but because of the increased temperature the droughts also increase in intensity and the fires that go with drought conditions become more intense and burn hotter. So we’re beginning to see these more extreme paths. Also, storms that are driven by latent heat increase water vapor in the atmosphere also can be more powerful as the planet gets warmer. I think we’re beginning to see that effect also. If we stay with business as usual, those effects will be larger and larger as we go decade by decade into the future.

TL: What kind of policy changes should we be advocating for immediately?

JH: Yes, that’s a good question and it’s actually quite clear what we should do. The fundamental fact is that as long as fossil fuels appear to be the cheapest energy to the consumer then we’ll just keep burning that. That’s what’s happening so far. The truth is fossil fuels are not the cheapest. If we would eliminate the subsidies for them and if we would include in their price, the external costs of them — the human health effects of air pollution and water pollution from burning and mining of fossil fuels are presently worn by the public entirely without any of the health effects being charged to the fossil fuel industry. The public picks up their health costs and the effect of climate change. The increased climate extremes are already causing some very expensive events.

Either the public picks it up by just suffering the damage or the federal government may come in and provide relief of billions of dollars. But again, that comes out of the taxpayers’ pocket. So what we should do to solve the problem and get us to move to a clean energy future is to book a gradually rising price on carbon, which would be a fee that you collect from possible fuel companies at the domestic mine or the port of entry. So it’s a very small number of sources and very accurately known. So you can just have a carbon fee which we suggest, for example, should be 10 dollars a ton to start with and increase year-by-year. The money that’s collected should be distributed 100 percent back to the public, to all legal residents, in equal amount. That way people would have the resources needed to make changes over coming years.

When they buy a new vehicle, they buy one that’s more efficient, they insulate their homes, they make choices. And it would provide the incentive for the business community, for entrepreneurs to develop low-carbon and no-carbon energy sources and products that are more energy efficient. And would stimulate our economy and make us much more competitive on international trading by making us leaders in clean energies. That is finally beginning to be recognized.

You may have noticed in the past two weeks, there was an op-ed in the Wall Street Journal, a conservative newspaper, by George Shultz and Gary Becker, which advocated exactly what I just described. The carbon fee with 100 percent of the money distributed to the public. So it does not make the government any bigger and it allows the market to determine what are the most efficient ways to move to a clean energy future. Yesterday, the Washington Post, which is a liberal newspaper, had an editorial saying essentially the same thing, they were pointing out that the European cap and trade system has collapsed and is completely ineffectual. That’s what we’ve been saying for the last few years that cap and trade with offsets is a hokey system, which has no hopes of solving the climate problem. We need a simple honest approach, which makes fossil fuels pay their true cost to society and which stimulates the development of clean energy alternatives.

Unless you make fossil fuels pay their true costs, people will just keep burning them. The [Obama] administration’s approach is, “Well, let’s reduce coal use and make vehicles more efficient.” Those things will reduce U.S. carbon emissions, but they won’t solve the problem because they reduce the demand for fossil fuels which makes them cheaper and somebody else will burn them.

The only way to solve the problem is to put an honest price on the fossil fuels. And it’s going to need to be international. So the United States and China are going to have to get together and agree on the fact that they both will need to put a gradually rising price on carbon emissions. And I feel that’s a doable thing because China knows that they will suffer from climate change more than most places. They have their 50 million people that are living near sea level. They have tremendous pollution, air and water pollution from fossil fuels. So they have a strong incentive for wanting to deal with this problem.

And to have a bilateral agreement between China and the U.S. is a practical solution. While trying to get 190 nations to agree with the Kyoto protocol type approach is hopeless as we’ve seen from the negotiations that have occurred over the last 20 years. That’s kind of a truth telling, which we have to have. Otherwise, we just continue down this line where we pretend that the UN is going to solve the problem eventually and they’re not doing anything to help.

TL: If governments can’t move fast enough, and so far our government especially has not moved much at all, what’s our plan B?

JH: It’s interesting, I was at a meeting of some of the 20 top scientists in the country just a few weeks ago and they’re already at the point of saying, “Well, we have to do geoengineering.” So they keep thinking of finding ways to suck the CO2 out of the atmosphere, well it will be incredibly expensive and we will be leaving that job for young people. It’s not clear that it will work, it’s not clear that it will be practical. It will be so expensive that it will make no sense.

We really need to have a plan A, plan B just is frightening. That’s why I think it’s really important that the U.S. and China start talking to each other about this. And you know, there actually was a meeting within the last two weeks between Secretary of State John Kerry and Chinese counterparts. One of the outcomes is that they will have some continuing talks between the two nations on the climate issue. And that is probably the most promising avenue for a plan A.

TL: I remember probably about five years or so ago everyone was talking about peak oil and then we had this resurgence of fossil fuels with the tar sands and fracking. Is the use of more unconventional sources more of a sign that we are in fact running out of the cheap and easy stuff and that we are running toward peak oil or does that mean the predictions of peak oil were actually off?

JH: Well, it’s a sign that governments don’t get it. That they think we just continue to go after every fossil fuel we can find including those that are very hard to get at, it takes a lot of energy to extract them and they’re particularly dirty and cause other environmental problems as well as climate change. They don’t get it, we can’t exploit the unconventional fossil fuels without guaranteeing that our children and grandchildren will have problems that are out of their control. That’s the message that has to get through.

I’m hoping that the Obama administration is beginning to understand this and that they will reject the Keystone Pipeline. That’s becoming more likely than pundits have been suggesting because it is just crazy to approve that pipeline. It would guarantee that we do exploit a significant fraction of those tar sands. Whatever we extract out of there and put into the atmosphere we’re going to have to take back out somehow and it’s going to be very expensive and may be impossible. If it’s impossible then our children will suffer the consequences.

So just by putting this moderate rising price on carbon you can be far more effective and more helpful for U.S. energy independence and economic development than you would be by approving that pipeline and producing a small number of jobs, temporary jobs associated with building a pipeline. You would get far more better jobs with this rising price on carbon because it would stimulate the development of clean energies and energy efficiency.

TL: I know that you have recently announced your retirement from your long-held post at NASA. What’s next for you?

JH: I want to continue to do science so I have to generate non-government support for a couple of people to work with me on doing science. I will be able to hopefully spend more time on it because I won’t have these administrative duties that I had with the government. But, it will also allow me to do things that I couldn’t do as part of the government. For example, I’m working with Our Children’s Trust on legal actions against the government for not protecting the rights of young people. I was not able to testify against the government when I was a government employee, but I can do that in the future.

And also, there are going to be some legal actions trying to stop the expansion of coal exports from the West Coast and legal actions to try to stop the pipelines, the tar sands pipelines both the east-west pipeline and the north-south one. And I will now have the time that I can contribute to the science aspect of those attempts to stop this senseless development of unconventional fossil fuels and continued reliance on coal. Because what the science tells us is we can’t do that, we’ve got to leave most of the remaining coal in the ground and we’ve got to leave those unconventional fossil fuels in the ground.

TL: Given everything that you know and how much you understand about this, how is it that you stay hopeful?

JH: Well, that’s fairly easy because if you look at our planet and nature it’s so incredible. With my grandchildren, we’ve been focusing on one particular species, the Monarch butterfly, which is just absolutely incredible. You have to preserve this incredible life on the planet. I believe as biologist Ed Wilson has argued that we can. It’s possible that this present time in which we are putting so much pressure on other life on the planet, that this is a bottleneck and if we are smart we can win this battle and allow the other life on the planet to continue to exists, co-exist with us, and I think that’s possible. But it’s going to require that people understand the situation and put the pressure on governments to see that we have policies that will achieve that. I think it’s still possible, but we’re running out of time.

Tara Lohan, a senior editor at AlterNet, has just launched the new project Hitting Home, chronicling extreme energy extraction. She is the editor of two books on the global water crisis, including most recently, Water Matters: Why We Need to Act Now to Save Our Most Critical Resource. Follow her on Twitter @TaraLohan.

U.S. Republican Koch oil billionaires help fund the Fraser Institute. Why the Fraser Institute?

Author
Jenny Uechi
U.S. libertarian oil billionaire brothers David and Charles Koch have poured at least half a million dollars into The Fraser Institute over the last few years. In case you haven’t been following their trail, here’s a bit about them:

If the Koch brothers didn’t exist, the left would have to invent them. They’re the plutocrats from central casting – oil-and-gas billionaires ready to buy any congressman, fund any lie, fight any law, bust any union, despoil any landscape, or shirk any (tax) burden to push their free-market religion and pump up their profits.

— Rolling Stone Magazine

The Koch brothers are the funders of the Americans for Prosperity group that just launched a $6.1 million television ad targeting President Barack Obama in eight states. Based in Witchita, Kansas, they own the second largest privately held company in America. Their father, Fred Koch, was a member of the radical right-wing John Birch Society.

“Charitable” Fraser Institute accepted $500k in foreign funding from Koch oil billionaires
Fraser Institute co-founder confirms ‘years and years’ of U.S. oil billionaires’ funding

According to The New Yorker, “The Kochs operate oil refineries in Alaska, Texas, and Minnesota, and control some four thousand miles of pipeline. Koch Industries owns Brawny paper towels, Dixie cups, Georgia-Pacific lumber, Stainmaster carpet, and Lycra, among other products. Forbes ranks it as the second-largest private company in the country, after Cargill, and its consistent profitability has made David and Charles Koch—who, years ago, bought out two other brothers—among the richest men in America. Their combined fortune of thirty-five billion dollars is exceeded only by those of Bill Gates and Warren Buffett.”

Republican commentator Glenn Beck has attended their private retreats, where U.S. Supreme Court Justices and a host of congressmen and political back-roomers mingle to strategize about moving America further right. They are widely suspected of having funded Herman Cain’s failed Republican presidential bid.

Both in their seventies, the Kochs have given tens of millions of dollars to Republican candidates. They fund projects that help undermine climate change, fight taxes, trade unions and battle Obama’s health care reforms.

“Most organisations which benefit from the Kochs’ largesse have one thing in common: they help advance an unflinching brand of libertarian conservatism,” writes Guy Adams in The Independent. “Some lobby against environmental regulation, or seek to undermine public perception of the threat of climate change, others battle taxes, trade unions and Barack Obama’s health care reforms.”
So why are the Koch brothers in Canada and why have they selected the Fraser Institute to be the repository of their generosity? A trip to The Fraser Institute’s website offers clues, if not answers.

Fraser Institute Branding: Freedom, Prosperity, Choice

Fraser’s website and Facebook page boldly promote a conservative political agenda. And although the Fraser Institute claims to be “independent” and “non-partisan”, the institute has been a connecting point for many leading conservatives in Canada.

On the front page of the Fraser Institute’s website, a bold headline reads: “Canada among the world’s biggest spenders on health care.”

Other articles include “Electricity prices soar when governments subsidize green energy,” and “The BC roots of Albertan conservatism”. The institute’s research topics are varied, ranging from “aboriginal issues” to energy to urban issues. But reports are completely consistent with a the right-wing, free-market agenda: in the health section, every study in the past several years is a critique of public health care, its long wait lines and high costs. On the energy front, studies call for reduced red tape on Albertan oil sands, and on education, private schools are praised while public schools are strongly criticized.

As a registered charity, the Fraser Institute is only allowed to devote a small part of its resources to political activity, and can never be partisan. Yet the institute has played a significant role in shaping the conservative movement and tone of political discourse in Canada today.

Fraser Institute All-Stars

Some famous figures include Ezra Levant, a Sun media columnist and author of Ethical Oil, who came to intern at the Fraser Institute after a fellowship with the Koch Foundation. Kathryn Marshall, political commentator and former Ethical Oil spokesperson, was also a development associate at the Fraser Institute. Wildrose leader Danielle Smith took on an internship with the Fraser Institute during her twenties that “imbued her with a passion for Ayn Rand and charter schools”, according to a recent Walrus article. She became an intern with the encouragement of Tom Flanagan, a Fraser Institute senior fellow and Stephen Harper mentor. Vancouver Sun editorial pages editor and columnist Fazil Milhar is the former regulatory studies director at the Fraser Institute.

The top tier at the Fraser Institute is filled with highly-respected economists and researchers whose names and faces are constantly present in national newspapers.

Fraser Institute’s president, Niels Veldhuis, is a respected economist who has written over 200 commentaries in publications such as The Economist, The Wall Street Journal and The Globe and Mail. In March 2011, he co-authored an article in The Financial Post titled, “We need Scott Walker here.” Scott Walker is the Wisconsin governor whose campaign was heavily financed by the Koch Industries PAC, and sparked a lengthy and much publicized stand-off against public sector workers last year after trying to remove their collective bargaining rights.

The institute’s director of health system performance studies, Nadeem Esmail, writes in National Post, Globe and Mail and the Wall Street Journal on health care policy and reform — his writings repeatedly depict Canada’s public health care as a financial sinkhole and urge privatization while warning readers in the U.S. not to emulate Canada’s system.

For many, the Fraser Institute is a foot in the door to climb the ranks of conservative organizations in Canada.

A typical case might be someone like Candice Malcolm. She got her start in 2007 as the student programs assistant at the Fraser Institute, then went on to became a Koch Summer fellow, going through a “rigorous” public policy program in Washington, attending seminars at the Cato institute. She went on to work for the Atlas Economic Research Foundation, (which paid blogger Vivian Krause her first honorarium), then rose to the executive assistant position at Alberta’s Wildrose Party. She now works in Ottawa as the Parliament press secretary.

Grooming the next generation

So where exactly does the Fraser Institute find its conservatives? Some, like the Wildrose leader, are recognized for their potential and recruited by the Fraser Institute during university. But in recent years, the institute has been cultivating young minds from an early stage.

For starters, the institute devotes a lot of resources training and recruiting youth. According the Canada Revenue Agency, the Fraser Institute spent $1.6 million in grants and scholarships for the 2010 year and almost $2.1 million the year before that.

One of the institute’s most effective tools are its free one-day seminars for youth across BC, which which writer and researcher Donald Gutstein describes as its “initial recruitment tool”. High school and post-secondary students participate in discussions on issues such as heath care and First Nations’ rights, and listen to high-profile guest speakers including Ezra Levant, journalist (and former George W. Bush economic speechwriter) David Frum, and Danielle Smith. Anyone can participate, even if only to enjoy a free lunch at a swanky hotel.

For participants, the real fun begins as students break off into small groups and begin debating and discussing public policy. Recruiters take down the names of students who express views aligned with those of the Fraser Institute (the left-leaning ones are never contacted again) and get in touch with them for further orientation.

The institute also has a student video contest, and the chosen winners (who receive a $625 – $2,000 prize) are invariably those whose work promotes a right-wing, free-market ideology.

Last year, the Fraser Institute gave first prize to a video entitled “Government During Crisis: Help or Hinderance?” which claimed that government got in the way during crisis situations, and that the “most effective relief came from faith-based organizations” as well as local businesses. In the previous year, the top honours went to a video called “Canadian Health Care: a monopoly on lives” that harshly criticized public health care, while the second prize that year was based on the theme, “The nanny state: is government regulation threatening your personal freedom?”, which argued that well-meaning legislation such as the anti-cyber bullying laws disrupted personal freedom.

For educators who want to teach youth to “think objectively” about climate change and other issues, the institute offers free lesson plans online. In the lesson plan for “Understanding Climate Change”, students are shown graphs used by climate change scientists to show the correlation between CO2 and temperature, such as the one that Al Gore showed in his 2006 documentary, An Inconvenient Truth. In the “answer key,” students learn that ”correlation is not causation”, and are fed the conclusion that climate change is not, in fact, caused by carbon-generating activities.

There’s plenty of tools for latecomers to the program as well: an attractive student internship gives $2,000 to $2,500 a month for a four-month period during which interns take part in seminars and discussions while contributing to the Fraser Institute’s work. Preference is given to strong writers and “candidates who are interested in educating students about economics and public policy”.

The “Economics for Journalists” course, meanwhile, uses reading material from the Fraser Institute publications to school future “opinion leaders” such as emerging journalists on free market principals. The course includes two “attitude surveys” to identify participants’ economic views both before and after the course.

All of these initiatives are deemed “educational”, but they are linked to a free-market agenda. Students and participants are armed with knowledge and arguments to debunk and discredit theories around climate change and public welfare as un-scientific or delusional, while actively pushing U.S.-style free market and privatization as the best option for Canada. And many of them have a powerful presence in right-wing-owned media to spread and legitimize their views.

The Left’s answer to the Fraser Institute?

By contrast, the progressive movement in Canada doesn’t have much of a counterpart to organizations like the Fraser Institute in terms of recruiting and training. In 2010, the progressive Canadian Centre for Policy Alternatives think tank had a total revenue of just $1,724,894 — a far cry from the Fraser Institute’s $10,834,410.

And people have started taking notice. An April 2011 newsletter from the Canadian Centre for Policy Alternatives notes:

“For years, through its seminar and internship programs,
the Fraser Institute has been identifying and training
young conservative leaders. . . comprehensive education opportunities,which welcome youth into the movement and provide them with theory, mentorship, networking opportunities and skills development, are remarkably lacking in the world of social justice work.”

In response, things are changing: rather than allow leaders for progressive politics to develop in an “organic” way, the CCPA’s teamed up in 2007 with environmental organization Check Your Head to create Next Up, a youth leadership to help emerging leaders from the progressive movement.

A counter-movement is also growing with progressive organizations such as LeadNow.ca, but will it be enough to produce someone with as much influence or prominence as Danielle Smith or Ezra Levant?

Time will tell.

One thing’s for sure: half a million dollars rarely comes without trust, or with no strings attached.

The Koch brothers know why they fund Fraser. The rest of us can guess.

“Charitable” Fraser Institute accepted $500k in foreign funding from Koch oil billionaires

Author
Alexis Stoymenoff
Billionaire oil barons David and Charles Koch contributed richly to “charitable” Canadian right-wing Fraser Institute

As the Conservative assault continues against Canadian environmental charities, The Vancouver Observer has learned that since 2007, foreign oil billionaires the Koch brothers have donated over half a million dollars to the “charitable” right-wing Fraser Institute.

According to U.S. tax documents, the Fraser Institute received $150,000 from the Charles G. Koch Charitable Foundation in 2008, $175,500 in 2009, and another $150,000 in 2010. The grants were purportedly for “research support” and “educational programs”.

Fraser Institute co-founder confirms ‘years and years’ of U.S. oil billionaires’ funding
U.S. Republican Koch oil billionaires help fund the Fraser Institute. Why the Fraser Institute?

Prior to 2008, the Institute received another $25,000 in funding from the Claude R. Lambe Foundation, which is under the umbrella of Koch Family Foundations.

It has long been known that the ultra-conservative Koch Brothers have been donors for the conservative policy think-tank—though this information is not listed the Institute’s Annual Reports—however, the extent of their funding in the past few years demonstrates the foundation’s more recent influence in Canadian politics.

Grants to the Fraser Institute are also among the highest amounts listed in the Koch Foundation’s tax records; apart from a few substantial grants to American universities, most of the other donations were under $10,000.

Charitable foundation conducting “intensely” political activity

The Fraser Institute, described by rabble.ca as “Canada’s most intensely political organization”, is a registered non-profit focused on economic and public policy research. The group’s work is often seen as controversial (which they boast about on the website), and is generally in support of conservative, small-government, free-market values.

While the federal government and pro-oil lobbyists have taken aim at environmental charities for allegedly violating the Canadian Revenue Agency’s legal limits for “political activity”, the Fraser Institute and its charitable status remain unquestioned. And as the Koch Foundation’s tax data shows, they’ve received a significant amount of “foreign funding” to help influence Canadian policy—which is precisely what environmental groups have been accused of doing.

The Fraser Institute claims to be “non-partisan and non-political”, and denies that it undertakes lobbying activities. However, critics cite examples of its blatantly political endeavors—like publicly calling on the government to change election spending laws, or pushing provinces to adopt “right-to-work” legislation.

Like other Koch-funded initiatives claiming that climate change fears are vastly overstated, the Institute has published a number of reports and commentaries about policy reactions to climate “alarmism”. The organization also received $120,000 from oil giant ExxonMobil in 2003, to help fund what they called “climate research”, according to Vancouver Sun reports from 2006.

Engineers of the Tea Party have interests in Canadian politics – and oil fields

As rulers of the oil and gas-based Koch Industries empire, Charles and David Koch have poured hundreds of millions of charitable dollars into lobby groups, advocacy organizations, educational institutes and conservative campaigns across North America. They have also been linked to extensive climate denial efforts in the U.S., and are often called the “financial engine” behind the Tea Party movement.

In addition, the Koch brothers have been said to have “substantial interests” in the Canadian oil sands and the building of the controversial Keystone XL pipeline. Though the two businessmen repeatedly claimed to have no connection to the proposed pipeline from Alberta to the Gulf Coast, Koch subsidiary Flint Hills Resources Canada was involved in the Canadian regulatory review process for Keystone as an intervenor.

In a submission to the National Energy Board, Flint Hills explained that it “is among Canada’s largest crude oil purchasers, shippers and exporters. Consequently, Flint Hills has a direct and substantial interest in the [Keystone XL] application”.

According to environmental news site InsideClimateNews, Koch Industries’ Calgary-based Flint Hills operation supplies about 250,000 barrels of tar sands oil a day to a Koch-owned refinery in Minnesota. Flint Hills also reportedly operates a crude oil terminal in Hardisty, Alberta, the starting point of the proposed Keystone XL pipeline.

“Koch Industries is already responsible for close to 25 percent of the oil sands crude that is imported into the United States, and is well-positioned to benefit from increasing Canadian oil imports,” reads a 2011 InsideClimateNews article.

A tangled web

The Koch Brothers’ ties to Canadian politics and industry don’t end at the oil sands. In fact, there are a number of interesting connections between the Koch foundations, the Fraser Institute, the Harper government, and Canadian pro-oil lobby group Ethical Oil.

For instance, Sun TV host Ezra Levant (author of Ethical Oil) completed an internship with the Charles G. Koch Foundation in 1994, before heading to work at the Fraser Institute in 1995. Kathryn Marshall, Ethical Oil’s former spokesperson, worked at the Fraser Institute as well. And Reform Party founder Preston Manning, also founder of the conservative Manning Centre for Building Democracy, is currently a senior fellow at the Fraser Institute.

With files from David P. Ball.

Dix Says NDP Oil Tanker Stance Applies To Whole Region

Author
Eric Swanson

On Earth Day, B.C. NDP leader Adrian Dix came out publicly against Kinder Morgan’s plans to bring more than 400 oil tankers per year to the waters around Vancouver, Victoria and the Gulf Islands saying: “I don’t think that the port of Metro Vancouver … should become a major oil export port.”

Dogwood Initiative applauded Dix’s statement, given our long-standing campaign to halt the expansion of crude oil tanker traffic on B.C.’s coast. We destroyed our original B.C. election leaflets, which portrayed the NDP as only having a firm stance against Enbridge’s northern proposal, and created a new version showing both the Green Party and the NDP as standing up to both major proposals to bring more oil tankers to our coast.

Then, on Wednesday, Juan de Fuca NDP candidate John Horgan caused a stir with his comments to the Surrey News Leader suggesting possible alternative locations for an expanded Kinder Morgan oil port.

To say the least, we were concerned. Was the NDP open to expanded oil tanker traffic so long as the terminal was moved a little south? If so, we certainly wouldn’t count that as a strong stand.

Early Thursday morning, however, Adrian Dix settled the matter on CKNW’s Bill Good show, stating “We’re not going to become an oil tanker export port whether it’s in Vancouver, Delta or anywhere else.”

And in a later media scrum, when asked about Kinder Morgansending oil to Washington and then up through the Strait of Juan de Fuca, Dix said: “I don’t see it as being a good idea for us to dramatically increase tanker traffic in this region.”

Adrian Dix’s statements – and those of Green Party of B.C. leader Jane Sterk – continue to reflect clear party stances against Kinder Morgan’s plans.

No matter who forms the next government and regardless of the promises candidates and parties do or don’t make, the Dogwood community will continue to relentlessly push for strong and immediate action to protect our coast from the threat oil pipelines, tankers and spills.

Powerful Republican lobbying group comes to Vancouver to strategize with oil industry

Author
Jenny Uechi

At a meeting last week of the Canadian Oil and Gas Export Summit in Vancouver, the U.S. Chamber of Commerce sent a representative to huddle with industry. Here’s a look at how the Republican Party is extending its influence into Canada.

The U.S. Chamber of Commerce, a powerful Republican lobbying group, was in Vancouver last week at the Canadian Oil and Gas Export Summit. Their appearance comes amidst the Harper government’s attacks on environmental charities in Canada, accusing them of influence from foreign billionaire “radicals” from the US.

Christopher Guith, vice president of policy for the U.S. Chamber of Commerce’s Institute for 21st Century Energy, addressed the small group of oil industry representatives at the oil and gas summit at the Four Seasons Hotel in downtown Vancouver.

Matt Koch, vice president for Oil Sands and Arctic Issues, was originally slated to speak at the event. Koch, who worked in the George W. Bush administration and at the American Petroleum Institute, had to cancel on short notice.

The U.S. Chamber of Commerce, described by The Economist as “the most muscular business lobby group in Washington”, is one of the largest Republican lobbying groups. Conservative commentator Glenn Beck recently held a telethon on its behalf, touting the Chamber as his ideological ally. Through its state chapter, the U.S. Chamber of Commerce recently poured $4.7 million into Wisconsin to support Republican governor Scott Walker, who recently emerged victorious from his recall race.

Also present was EPRINC president Lucian Pugliaresi, a former energy lobbyist whose company, LPI Consulting, was registered as a foreign agent due to consulting work the firm has done for countries such as Saudi Arabia and Venezuela.

A “paradigm shift” for more oil supply, not less

Tall, blond and well-spoken, Guith told participants in the gleaming beige and gold conference room on the hotel’s second floor that the world was going to need more oil in the future, not less.

“We’re in the middle of an absolute paradigm shift. Conventional wisdom is on its head right now and very few people understand this, least of all in Washington, D.C.,” Guith said, echoing the views of various Republican lobbying groups.

In Guith’s view, a few points are critical for anyone in the oil and gas industry to understand in-depth:

According to a report from the Energy Information Administration (EIA) – said by many speakers at the summit to be “too conservative” with its estimates – global energy demand will rise 53 per cent between 2008 and 2035. Guith said 90 per cent of that demand will come from develping nations, including places where millions are currently without household electricity.

Renewable energy will not fill the gap, he said, as it needs heavy government subsidies to survive. Even though wind installations in the U.S. are up 31 per cent in 2011, Guith said that the federal wind tax credit is set to expire on December 31, and claimed this meant an uncertain future for the industry.

Given the slumping economy and rising oil prices, Guith said, U.S. public opinion is shifting more and more in favour of offshore drilling and oil exploration.

Source: EIA.gov

In his view, North America is uniquely positioned to make substantial profits through offshore drilling and oil exploration. His line of thought: as developing countries rapidly industrialize, so does their demand for energy. Enter Canada, with its political stability and rich oil and gas resources.

Powerful Republican lobbying group comes to Vancouver to strategize with oil industry

At a meeting last week of the Canadian Oil and Gas Export Summit in Vancouver, the U.S. Chamber of Commerce sent a representative to huddle with industry. Here’s a look at how the Republican Party is extending its influence into Canada.

This is the first of a special three-part series on what was said and heard at the Summit.

He pointed to a screen showing a statement of “profound disappointment” from Prime Minister Stephen Harper after the U.S. rejection of the controversial Keystone XL pipeline.

“We Yanks have a reputation for being a little brash,” he said, “but at least you know where we stand. You have these statements, which I understand are pretty big statements coming out of Ottawa – but from an American policy standpoint, it’s like…’profound disappointment’?

“Is that the best the Prime Minister can do? He must not be very upset. If it was the other way around you would have people talking about invading Canada..I say this only to make a point that it is difficult when our friends to the north don’t necessarily play as directly as we do.”

Renewable energy – not an option?

What importance will renewable energy have in supplying the global demand for energy? Not much, according to Guith. He insisted that renewable energy such as wind and solar won’t become mainstream for several reasons: for one, renewable energy is not competitive with oil in his view.

“Renewables are tied directly to federal subsidies – it’s not competitive,” he argued. “Wind is closer than other forms of renewable energy, but no one expects to see offshore investment happen. The margin is too far out for any sort of investment.”

Secondly, he said, even renewable energy projects tend to be stalled due to the BANANA syndrome (described as “NIMBY on steroids”, meaning “Build Absolutely Nothing Anywhere Near Anyone.”)

As an example, he brought up the Massachusetts Cape Wind project, a federally approved offshore wind farm which which was first proposed in 2001 and remains in “regulatory purgatory”, according to Guith, due to heavy opposition from environmental groups.

Lastly, he noted that public attitudes oil development are rapidly changing to become more accepting of oil – despite widespread warnings of climate change and the environmental damage caused by carbon emissions.

Gas prices, he said, have been rapidly rising in the past few years: Drawing on last year’s research from the Oil Price Information Service, he said that American households have been steadily spending more of their income on gas. The figure, he said, rose from $173.80 in 2009 to $281. 06 in 2010, hitting $368.09 in 2011.

According to a Pew Research poll, support for offshore drilling is at a historic high – now at 65 per cent, compared to 44 per cent in June 2010. Attitudes toward oil are changing, he suggested, to be more favorable. Guith expressed his exasperation at “ugly” U.S. regulations that put around 86 per cent of U.S. offshore reserves off limits and expressed hope that his institute could convince the public and government to allow more oil drilling and exploration.

The U.S. presidential election and Keystone XL

Guith repeatedly mentioned the rejection of the controversial Keystone XL pipeline by President Obama, which took many in the oil industry by surprise.

As Guith saw it, the major political problem with the Keystone XL pipeline was public ignorance of the project and its potential benefits for the country.

Referring to another Pew Reserach Centre poll, he said that of 63 per cent of Americans surveyed had heard about the Keystone XL pipeline. Of that group, two thirds approved. However, 28 per cent of people did not even know what the project was about. It’s hard to make the average person care about the pipeline, he said, but it is possible to change this by educating people about its benefits for them. The benefits, he said, would be increased income and a higher standard of living.

Asked about the possibility of the Keystone XL pipeline being approved in the future, both Pugliaresi and Guith said they were uncertain.

“You would have to be a moron not to approve [the Keystone XL pipeline] …It’s from Canada, they have carbon tax, universal health care…who would say no to this project?” Pugliaresi asked, shaking his head with bewilderment.

“We were all wrong on that,” Guith agreed. “The group 350.org – Bill McKibben’s organization – I have to give them credit. They were the ones who spent an entire month last year protesting at the White House, and turned it into a cause célèbre in the environment community.”

Both said it was still possible to see the Keystone XL pipeline approved after the November election, but the outcome is uncertain. No one seemed to know which way Obama would swing on the Keystone project if he was re-elected. One thing both seemed certain about was that the Canadian government would be on board.

Neither could say for sure if all Canadians would be on board.

This article is part of a series. For more from the Canada Oil and Gas Export Summit, see “Pushing through Enbridge pipeline without First Nations consent?” and “BC Premier Christy Clark not working hard enough for LNG, energy expert says”.

U.S. Republican Koch oil billionaires help fund the Fraser Institute. Why the Fraser Institute?

Author
Jenny Uechi
U.S. Republican Koch oil billionaires help fund the Fraser Institute. Why the Fraser Institute?

Billionaire oil barons Charles and David Koch contributed richly to Canada’s Fraser Institute think tank

U.S. libertarian oil billionaire brothers David and Charles Koch have poured at least half a million dollars into The Fraser Institute over the last few years. In case you haven’t been following their trail, here’s a bit about them:

If the Koch brothers didn’t exist, the left would have to invent them. They’re the plutocrats from central casting – oil-and-gas billionaires ready to buy any congressman, fund any lie, fight any law, bust any union, despoil any landscape, or shirk any (tax) burden to push their free-market religion and pump up their profits.

— Rolling Stone Magazine

The Koch brothers are the funders of the Americans for Prosperity group that just launched a $6.1 million television ad targeting President Barack Obama in eight states. Based in Witchita, Kansas, they own the second largest privately held company in America. Their father, Fred Koch, was a member of the radical right-wing John Birch Society.

“Charitable” Fraser Institute accepted $500k in foreign funding from Koch oil billionaires
Fraser Institute co-founder confirms ‘years and years’ of U.S. oil billionaires’ funding

According to The New Yorker, “The Kochs operate oil refineries in Alaska, Texas, and Minnesota, and control some four thousand miles of pipeline. Koch Industries owns Brawny paper towels, Dixie cups, Georgia-Pacific lumber, Stainmaster carpet, and Lycra, among other products. Forbes ranks it as the second-largest private company in the country, after Cargill, and its consistent profitability has made David and Charles Koch—who, years ago, bought out two other brothers—among the richest men in America. Their combined fortune of thirty-five billion dollars is exceeded only by those of Bill Gates and Warren Buffett.”

Republican commentator Glenn Beck has attended their private retreats, where U.S. Supreme Court Justices and a host of congressmen and political back-roomers mingle to strategize about moving America further right. They are widely suspected of having funded Herman Cain’s failed Republican presidential bid.

Both in their seventies, the Kochs have given tens of millions of dollars to Republican candidates. They fund projects that help undermine climate change, fight taxes, trade unions and battle Obama’s health care reforms.

“Most organisations which benefit from the Kochs’ largesse have one thing in common: they help advance an unflinching brand of libertarian conservatism,” writes Guy Adams in The Independent. “Some lobby against environmental regulation, or seek to undermine public perception of the threat of climate change, others battle taxes, trade unions and Barack Obama’s health care reforms.”
So why are the Koch brothers in Canada and why have they selected the Fraser Institute to be the repository of their generosity? A trip to The Fraser Institute’s website offers clues, if not answers.

Fraser Institute Branding: Freedom, Prosperity, Choice

Fraser’s website and Facebook page boldly promote a conservative political agenda. And although the Fraser Institute claims to be “independent” and “non-partisan”, the institute has been a connecting point for many leading conservatives in Canada.

On the front page of the Fraser Institute’s website, a bold headline reads: “Canada among the world’s biggest spenders on health care.”

Other articles include “Electricity prices soar when governments subsidize green energy,” and “The BC roots of Albertan conservatism”. The institute’s research topics are varied, ranging from “aboriginal issues” to energy to urban issues. But reports are completely consistent with a the right-wing, free-market agenda: in the health section, every study in the past several years is a critique of public health care, its long wait lines and high costs. On the energy front, studies call for reduced red tape on Albertan oil sands, and on education, private schools are praised while public schools are strongly criticized.

As a registered charity, the Fraser Institute is only allowed to devote a small part of its resources to political activity, and can never be partisan. Yet the institute has played a significant role in shaping the conservative movement and tone of political discourse in Canada today.

Fraser Institute All-Stars

Some famous figures include Ezra Levant, a Sun media columnist and author of Ethical Oil, who came to intern at the Fraser Institute after a fellowship with the Koch Foundation. Kathryn Marshall, political commentator and former Ethical Oil spokesperson, was also a development associate at the Fraser Institute. Wildrose leader Danielle Smith took on an internship with the Fraser Institute during her twenties that “imbued her with a passion for Ayn Rand and charter schools”, according to a recent Walrus article. She became an intern with the encouragement of Tom Flanagan, a Fraser Institute senior fellow and Stephen Harper mentor. Vancouver Sun editorial pages editor and columnist Fazil Milhar is the former regulatory studies director at the Fraser Institute.

The top tier at the Fraser Institute is filled with highly-respected economists and researchers whose names and faces are constantly present in national newspapers.

Fraser Institute’s president, Niels Veldhuis, is a respected economist who has written over 200 commentaries in publications such as The Economist, The Wall Street Journal and The Globe and Mail. In March 2011, he co-authored an article in The Financial Post titled, “We need Scott Walker here.” Scott Walker is the Wisconsin governor whose campaign was heavily financed by the Koch Industries PAC, and sparked a lengthy and much publicized stand-off against public sector workers last year after trying to remove their collective bargaining rights.

The institute’s director of health system performance studies, Nadeem Esmail, writes in National Post, Globe and Mail and the Wall Street Journal on health care policy and reform — his writings repeatedly depict Canada’s public health care as a financial sinkhole and urge privatization while warning readers in the U.S. not to emulate Canada’s system.

For many, the Fraser Institute is a foot in the door to climb the ranks of conservative organizations in Canada.

A typical case might be someone like Candice Malcolm. She got her start in 2007 as the student programs assistant at the Fraser Institute, then went on to became a Koch Summer fellow, going through a “rigorous” public policy program in Washington, attending seminars at the Cato institute. She went on to work for the Atlas Economic Research Foundation, (which paid blogger Vivian Krause her first honorarium), then rose to the executive assistant position at Alberta’s Wildrose Party. She now works in Ottawa as the Parliament press secretary.

Grooming the next generation

So where exactly does the Fraser Institute find its conservatives? Some, like the Wildrose leader, are recognized for their potential and recruited by the Fraser Institute during university. But in recent years, the institute has been cultivating young minds from an early stage.

For starters, the institute devotes a lot of resources training and recruiting youth. According the Canada Revenue Agency, the Fraser Institute spent $1.6 million in grants and scholarships for the 2010 year and almost $2.1 million the year before that.

One of the institute’s most effective tools are its free one-day seminars for youth across BC, which which writer and researcher Donald Gutstein describes as its “initial recruitment tool”. High school and post-secondary students participate in discussions on issues such as heath care and First Nations’ rights, and listen to high-profile guest speakers including Ezra Levant, journalist (and former George W. Bush economic speechwriter) David Frum, and Danielle Smith. Anyone can participate, even if only to enjoy a free lunch at a swanky hotel.

For participants, the real fun begins as students break off into small groups and begin debating and discussing public policy. Recruiters take down the names of students who express views aligned with those of the Fraser Institute (the left-leaning ones are never contacted again) and get in touch with them for further orientation.

The institute also has a student video contest, and the chosen winners (who receive a $625 – $2,000 prize) are invariably those whose work promotes a right-wing, free-market ideology.

Last year, the Fraser Institute gave first prize to a video entitled “Government During Crisis: Help or Hinderance?” which claimed that government got in the way during crisis situations, and that the “most effective relief came from faith-based organizations” as well as local businesses. In the previous year, the top honours went to a video called “Canadian Health Care: a monopoly on lives” that harshly criticized public health care, while the second prize that year was based on the theme, “The nanny state: is government regulation threatening your personal freedom?”, which argued that well-meaning legislation such as the anti-cyber bullying laws disrupted personal freedom.

For educators who want to teach youth to “think objectively” about climate change and other issues, the institute offers free lesson plans online. In the lesson plan for “Understanding Climate Change”, students are shown graphs used by climate change scientists to show the correlation between CO2 and temperature, such as the one that Al Gore showed in his 2006 documentary, An Inconvenient Truth. In the “answer key,” students learn that ”correlation is not causation”, and are fed the conclusion that climate change is not, in fact, caused by carbon-generating activities.

There’s plenty of tools for latecomers to the program as well: an attractive student internship gives $2,000 to $2,500 a month for a four-month period during which interns take part in seminars and discussions while contributing to the Fraser Institute’s work. Preference is given to strong writers and “candidates who are interested in educating students about economics and public policy”.

The “Economics for Journalists” course, meanwhile, uses reading material from the Fraser Institute publications to school future “opinion leaders” such as emerging journalists on free market principals. The course includes two “attitude surveys” to identify participants’ economic views both before and after the course.

All of these initiatives are deemed “educational”, but they are linked to a free-market agenda. Students and participants are armed with knowledge and arguments to debunk and discredit theories around climate change and public welfare as un-scientific or delusional, while actively pushing U.S.-style free market and privatization as the best option for Canada. And many of them have a powerful presence in right-wing-owned media to spread and legitimize their views.

The Left’s answer to the Fraser Institute?

By contrast, the progressive movement in Canada doesn’t have much of a counterpart to organizations like the Fraser Institute in terms of recruiting and training. In 2010, the progressive Canadian Centre for Policy Alternatives think tank had a total revenue of just $1,724,894 — a far cry from the Fraser Institute’s $10,834,410.

And people have started taking notice. An April 2011 newsletter from the Canadian Centre for Policy Alternatives notes:

“For years, through its seminar and internship programs,
the Fraser Institute has been identifying and training
young conservative leaders. . . comprehensive education opportunities,which welcome youth into the movement and provide them with theory, mentorship, networking opportunities and skills development, are remarkably lacking in the world of social justice work.”

In response, things are changing: rather than allow leaders for progressive politics to develop in an “organic” way, the CCPA’s teamed up in 2007 with environmental organization Check Your Head to create Next Up, a youth leadership to help emerging leaders from the progressive movement.

A counter-movement is also growing with progressive organizations such as LeadNow.ca, but will it be enough to produce someone with as much influence or prominence as Danielle Smith or Ezra Levant?

Time will tell.

One thing’s for sure: half a million dollars rarely comes without trust, or with no strings attached.

The Koch brothers know why they fund Fraser. The rest of us can guess.

Why do you think North America’s richest oil barons, who are also the effective founders and funders of the Tea Party movement, would donate to a Canadian think tank? Please comment below…

EarthMatters_600.jpg New “concerned citizens group” has deep pockets and close ties to oil industry

Last week, a new ad promoting oil pipelines appeared ahead of my favourite new song on YouTube. It featured a pair of actors having a simulated ‘real-life’ conversation about the paradox between protecting the environment and future economic growth. After the female actor asks, “But can’t we have both?” the man responds, “but if we let pipelines and tankers into our environment, what safeguards to we have?”

A third, smiling actor steps onto the scene, and says in a reassuring voice: “Let’s look at the facts.” She proceeds to set the environment-versus-economy debate to rest with a series of stats about double-hulled tankers and the “99.9 per cent safety record” of pipelines.

The ad is part of a campaign by British Columbians for International Prosperity, a new concerned citizen’s group that calls itself “an independent group of concerned citizens looking to promote practical resource development, international trade expansion, manufacturing development, and other initiatives bringing prosperity to British Columbia, Canada, and our Global partners”.

But a closer look reveals the group’s deep connections to the oil sands industry, according to research that ran in today’s Globe and Mail.

A domain search for the website registered on December 20, 2012, shows that the website is registered to Bruce Lounds of “West Coasters for International Prosperity Association”.

Lounds is a management consultant based in Vancouver. He works at Connex Solutions, Inc.

According to his LinkedIn profile, Lounds’ specialties include Project Evaluations, Regulatory Affairs, Heavy Oil and Tar Sands Sector, Project Management, Economics, Business Unit Management.

His role at Connex solutions, where he has been since 1998, is “Management Consulting in Heavy Oil / Tar Sands Sector”.

Prior to Connex, Lounds worked at ConoccoPhillips from 1996-1998 as the Surmount Project Manager. Surmount was ConoccoPhillips’ first pilot project for in situ, a term to describe bitumen extraction from oil sands. The project was a 50-50 joint venture with Total E&P Canada.From 1970-1996, he worked with BP in various roles: Human Resources Benefits and Compensation Analyst (1970-81), Petroleum Engineer (1981-84), Engineering Supervisor (1984-88), Chief Engineer (1988), Engineering Manager (1988-1992), General Manager (1992-1996) .In 1992, Lounds was the President of the Canadian Heavy Oil Association (CHOA).

In addition to this work, Lounds has appeared before the Alberta Energy and Utilities Board as a representative for Japan Canada oil sands Limited. Later, he appeared again before the Alberta Energy and Utilities Board on behalf of Gulf Canada. And from at least 1994-1995, Lounds was the manager for heavy oil at Amoco.

Even though Lounds claims that he’s “not a front for the oil industry” and that BC4IP hasn’t received any backing from Enbridge or Kinder Morgan, the fact that he won’t identify any of the group’s other leaders, members or its media campaign spending, raises some big questions.

Cleaning up the oil industry’s image

The last two weeks have been bad ones for the oil industry’s public image. A 2,200-barrel Alberta spill last Monday was followed just two days later by a spill in Minnesota. A broken pipe at Suncor Energy Inc. contaminated the Athabasca River in Alberta the very next day. Then on Friday, a residential Arkansas community was dumped with 10,000 barrels of crude, forcing 22 homes to be evacuated. Then, a Canadian Pacific freight train derailed in northwestern Ontario and one of the 22 cars affected is leaking crude oil. And CP was off by an order of magnitude about the impacts from that spill. A Shell pipeline later burst in Texas, dumping over 30,000 gallons into nearby waterways.

So in a crisis week, groups like British Columbians For International Prosperity fight back with PR. The group alleges that, “[t]here are many organizations who oppose development under any circumstances. Their voices have overshadowed important considerations in improving the standard of living in British Columbia and across the globe”.

Presumably, they are referring to the environmental groups, academics and politicians across the globe this week who are looking at oil sands pipelines under the microscope and wondering if it’s such a good idea after all.

BC4IP’s failure to disclose its close connections to the oil industry is as insincere as its promise to “address the downsides of development in an honest and forthright manner”.

So the next time those ads appear on YouTube, take a moment to recognize the hypocrisy of this so-called concerned citizens’ group.

Canadian Minister promoting the Keystone XL oil sands pipeline: ‘Our objective is to have zero serious spills’

Though the State Department officially closed the final comment period for the final stretch of the Keystone XL pipeline earlier this week, Canada’s Minister of Natural Resources Joe Oliver continued to make the rounds to press for approval and public acceptance of the controversial project in New York City this week — complete with the government’s standard talking points on American job creation, despite reports that permanent job creation in the U.S. will be far more modest once construction is finished.

Oliver’s job as salesman was made only more difficult by the attention generated by the recent Exxon pipeline rupture in Arkansas, which sent 157,000 gallons of crude oil from oil sands spilling into neighborhoods and wetlands. He acknowledged in an interview with Raw Story that such spills don’t help public perceptions.

“If there’s a spill, every company is affected reputationally, even if one company may have to pay the financial cost because it’s polluter pay,” he said.

But, he said, “When there is a spill, it’s dramatized, even though it’s minuscule as a proportion, it’s definitely not trivial in places where it occurs.”

That’s something the residents of Marshall, Michigan know all too well. In July, 2010 the Canadian company Enbridge reported a 30 inch rupture in its pipeline that the EPA is still requiring them to do additional clean-up on. The pipeline rupture spilled an estimated 819,000 gallons of oil into the Kalamazoo River.

Oliver, though, claims, “Pipelines are by far the safest form of transportation of oil and gas,” he said. “The safety record in Canada, and I think it’s pretty much the same in the United States, is 99.9996 percent. So, it’s safer by far than any other form of transportation.”

But while there are more accidental releases on trains numerically, mostly due to leakage, Bloomberg reporters Rebecca Penty and Jim Efstathiou Jr. found that concerns about railway spills highlighted in the State Department’s report — performed by the conservative Manhattan Institute — were, at best, methodologically flawed.

U.S. pipelines carried 474.6 billion gallons of crude and petroleum products in 2012 and reported 2.3 million gallons spilled, an effective rate of 0.0005 percent, according to John Stoody, spokesman for the Association of Oil Pipelines.

Over the entire decade ending with 2012, railroads hauled 11.2 billion gallons of crude with 95,256 gallons spilled, the majority from just one 2008 accident in Oklahoma that accounted for 81,103 gallons, according to the rail association.

In addition, the reporters discovered that pipelines, unlike trains, need not report any spill under 5 gallons. Moreover, as highlighted by David Malitz in an analysis for the Natural Resources Defense Council, the agency in charge of pipeline safety in the United States, the Pipeline and Hazardous Materials Safety Administration at the Department of Transportation, highlighted major flaws in its own data collection on which the industry and the government rely. According to its own report, the PHMSA noted the likelihood of underreporting even before taking into account the lack of data on spills over five gallons:

Most of our data collection relies on third-party reporting from regulated companies. This is convenient, and it goes directly to the source. It also introduces serious biases and gaps in the data we collect. Despite the best intentions and professionalism, the regulated industry has an institutional bias (and probably a liability aversion) in determining the causes, circumstances, and consequences of failures. Accident investigations—the limited number that we do—have shown some significant differences between what a company reports and an objective view of these events. Reports from companies also reflect large numbers of blanks and “unknown” data, particularly in the most serious cases—exactly where it is most critical that we have good data.

In other words, even the regulators in the United States aren’t totally sure how much oil goes from pipelines into ecosystems in the United States each year.

Oliver says that the issue of spills “is being overseen by the regulators,” but that the decision whether to complete the Keystone XL pipeline is about trade-offs. “It is inevitable, it seems to me, that the United States will continue to build pipelines,” he said, citing both the safety record and the cost of rail and road transportation. “If they don’t continue to [build pipelines], they’re going to have to find another form of transportation which is more costly and less safe, or stop moving energy, which would have dire consequences for the economy and the people of the country.”

“Since they’re going to continue to build pipelines, why not build one which the U.S. State Department has said is safer than existing pipelines?” he added rhetorically. “The reason they said that,” he claimed, “is because technology’s improving and because Keystone has imposed on it some 57 conditions that they’re going to have to comply with.” (The NRDC argues that only 12 of the 57 conditions set forth by the PHMSA as part of the agreement differ from the current standard conditions for pipeline development in the United States.)

Still, Oliver persists that importing oil from Alberta’s oil sands is an overall better choice for the environment than the ones America currently makes. “We are also a more responsible environmentally than the other countries that are exporting oil to the United States, most of whom have no rules at all,” he told Raw Story, “And often we don’t even know what their emissions are because they don’t have a transparent system the way we do [in Canada].” He added, “Canada is a choice, if what you look at is reliability and environmental responsibility.”