The Kochs Have Bet Big That The Earth Is Doomed

The Kochs have wager big that the earth is doomed. (And Obama is fighting for them to win that bet).

Forbes magazine noted, manner again in 2006, that although the Koch brothers – David and Charles – could promote Koch Industries and dwell happily ever after (on the proceeds from promoting what was then the world’s largest non-public company), Charles, who actually runs the agency, instructed them straight out, that promoting it could be “literally over my dead physique.”

In different words: they won’t do this.

Glycerin Refining EquipmentWhat, then, is such an extraordinary business plan, that retains them from merely retiring as two of the world’s richest individuals? The reply seems clear:

Petroleum has been their agency’s base, ever since their dad, Fred Koch, began Koch Industries in 1940 (on the proceeds he had earned primarily during 1929-32 from serving to Stalin build the Soviet Union’s crucial oil-infrastructure). However, Koch Industries has been diversifying lately. In 2004, they paid $4.2 billion for Dupont’s fibers businesses, together with Dacron and far else. Then, in 2005, they paid $21 billion for Georgia-Pacific, the paper and wood-merchandise producer.

However their chief enterprise continues to be petroleum: not simply the pipelines to transport it, but more and more also the uncooked oil in the ground, and the dirtier the oil the better. They now personal two-thirds of the world’s dirtiest oil: Alberta Canada’s tar sands. And they’re lobbying and propagandizing heavily for President Obama to allow building of the Keystone XL Pipeline (which pipeline they’d personal 25%) to ensure that that deeply land-locked Canadian oil to be transported to 2 of their own Texas refineries, which have been particularly tailored for the purpose. Not only would they be deriving about $1 billion per yr from working the pipeline, but they might also be advertising the tar sands, two thirds of that are on land that’s owned by Koch Industries. That’s the two-thirds of Alberta’s tar sands oil that the Kochs really personal.

Nevertheless, one of the world’s greatest banks, HSBC, came out with a study, on 25 January 2013, “Oil & Carbon Revisited: Value at risk from ‘Unburnable’ Reserves,” which reported that in order for this planet to have even as much as a 50% probability of avoiding the climate’s going haywire, “solely around 1,000 Gt [Gigatons] or a third of current proven reserves could be ‘burned’.” Furthermore, “Embedded ‘carbon’ in coal is 3 times the amount bound in oil and over 4 instances that in gas.” This report acknowledged that, “It is clear that decreased usage of coal [whose utilization is soaring in China and already inflicting large health-problems in Chinese language cities] is the important thing to stabilising and finally decreasing annual carbon emissions. Nonetheless, we imagine that reductions in oil demand … could be delivered more shortly than coal by means of improvements in transport fuel financial system.” In different words: forcing a reduction in oil-use is totally essential, in order for our descendants not to lose the planet rapidly.

On page 16 of that report was a gorgeous calculation, titled “Break-evens for chosen high-cost oil initiatives,” and the researchers truly calculated there the price that a barrel of oil would have to fetch on the global market to ensure that each type of petroleum to be able to be produced without the sellers losing cash on that oil. For “Deepwater” projects, it ranged from $forty nine.Forty as much as $64.00. On “Heavy oil,” it was $fifty four.70. And on “Oil sands” (Alberta’s oil, the dirtiest on the earth), it was $seventy five.50.

In different phrases, the Koch brothers (through their personal firm) own two-thirds of the world’s dirtiest petroleum, which consequently is so expensive to process, that it turns into totally worthless at a world per-barrel value of $75.50. All other oil would still be worthwhile at that worth, however not the oil that now constitutes the biggest speculative (and by far the riskiest) portion of the Koch brothers’ (or of Koch Industries’) massive investment portfolio.

Whereas other oil firms have targeted on the bottom-price petroleums to get to market, the Kochs have targeted instead on the very best-price petroleum to get to market. They purchased it cheap, as a result of it’s so soiled and land-locked.

Their enterprise-plan (other than diversifying into non-petroleum industries) is easy: Drive their costs to produce their filthy oil down from the existing $seventy five.50 per barrel, in an effort to make it extra competitive (since they personal two-thirds of the estimated 874 billion barrels of these items).

How can they drive that cost down? Right now, President Barack Obama is negotiating, behind the scenes, via his U.S. Commerce Representative, to get Europe to weaken its anti-international-warming standards, in order to allow the world’s dirtiest oil to become more worth-competitive.

On 24 September 2013, Kate Sheppard at Huffington Submit bannered “Michael Froman, Top U.S. Commerce Official, Sides With Tar Sands Advocates,” and she reported that the Obama Administration was threatening Europe with retaliation on the World Trade Group if Europe did not get rid of its distinction between high-CO2 oil and common oil – between tar-sands-derived oil, and odd petroleum. The U.S. Trade Consultant told Congress that the problem he had right here didn’t concern climate change, however solely “inadequate transparency and public participation within the European Commission’s regulatory process.” Then, Sheppard herself asked one in all his aides, who merely reiterated that by saying, “The United States shares the EU’s objective of decreasing greenhouse gasoline depth, but we’ve got raised issues with respect to insufficient transparency and public participation in the European Fee’s regulatory course of.” Sheppard, a minimum of as far as her information report indicated, asked no observe-up question, such as: “‘inadequate’ in what approach; and how can you even be speaking about that since the issue here is world warming?” So: the President and his Consultant haven’t been confronted publicly on this matter.

Barack Obama’s public statements towards world warming had been belied by his actions in personal, and but his hirees, such because the gasification U.S. Commerce Representative, Michael Froman, formerly a Managing Director of Citigroup, had been turning the table and accusing the EU of “inadequate transparency” – as if the way forward for this planet weren’t the problem, and a vastly extra vital one.

If President Obama can drive Europe to lower their anti-international-warming requirements with the intention to allow the Kochs to export their super-soiled oil to Europe via the Kochs’ Corpus Christi Texas refineries, then a big portion of the present cost-disadvantage of the Kochs’ super-soiled oil (as compared to cleaner oil) can be absorbed ultimately by the planet itself, within the form of added international warming. “These refineries have a combined crude oil processing capacity of about 300,000 barrels per day. While one potential function of the KXL Pipeline for Koch Industries could possibly be to offer entry to Canadian tar sands for its Corpus Christi refineries, this benefit seems relatively insignificant compared to their large potential profits from producing tar sands crude oil.” (See web page 11 there.) In other words: President Obama is negotiating behind the scenes so as to switch these harms onto everybody else, so that the benefits will go to the Kochs for his or her having paid dirt-costs for each certainly one of the 2 million acres of tar sands they own. (That’s on page 7.) Consequently, there could be, for the Koch brothers (as said within the report’s Executive Summary), “$a hundred billion in potential income resulting from KXL.” Their destroying this planet would thus be very profitable for them.

Apparently, that is the business plan that they’re so wanting to pursue that it’s more attractive to them than simply retiring: Instead of their being each tied with the opposite as being the sixth-wealthiest particular person on this planet, they’d in all probability be by far the wealthiest two individuals of all individuals on Earth. (The report estimates that their joint existing fortune of roughly $eighty billion can be enhanced by one more $100 billion, for a complete of $180 billion, or $ninety billion apiece.) Apparently, the Kochs are doing this for sheer standing. (They could not possibly eat all their wealth even in the event that they needed to.) It thus seems that their motivation is basically similar to that of their father’s great benefactor, Stalin. His standing was based on communist values; theirs relies on fascist values; but the motivation is status, just the identical.

And Barack Obama, against whom the Kochs bundled more campaign cash than some other two individuals, for Mitt Romney and for Republicans in Congress and within the state homes, is fighting in opposition to the European Union, in order to assist the Kochs to realize this, their dream. Maybe that’s the only factor in this story that does not make sense, but it’s definitely the case, up till now. And (if there may be one other factor that doesn’t make sense) the massively ignorant American public desires them to win.

Obama’s excuse for attempting to force Europe to purchase the Kochs’ filthy oil could be known as ludicrous. Nevertheless, since this excuse proves that he’s a hypocritical liar, and the stakes which might be concerned listed here are huge for your complete world, it’s, instead, tragic, if is not outright catastrophic.

Maybe Obama, too, is mainly driven by standing. Then, all of this insanity on the a part of the elite would possibly make sense – in an insane form of approach. Perhaps standing-addicts are literally the type of people who most tend to rise to the top, wherever. Hitler, Stalin, Capone, Koch, Obama, Bush: what’s the distinction, really, apart from their “character”?


Investigative historian Eric Zuesse is the creator, most not too long ago, of They don’t seem to be Even Close: The Democratic vs. Republican Financial Data, 1910-2010, and of CHRIST’S VENTRILOQUISTS: The Event that Created Christianity.