Koch Brothers Driving Keystone XL Pipeline from Canada to Cut Out Venezuelan Oil

Paul Jay of the Real News Network interviews Greg Palast, a BBC investigative reporter and author of Vultures’ Picnic.

Listen to it all, but here’s what I think is the key portion; it starts with a question that’s so obvious that nobody’s asking it: Why are we building a pipeline to ship oil to Texas? Texas has oil!

And I wanted to know why we’re taking oil from Canada across the entire United States to Texas. And, again, it’s because the Kochs want it. Now, why do they want it? The answer is, right now they’re getting their oil—the only place they can get lots of heavy crude oil—if you want heavy crude, you’ve got to get it from a heavy dude named Hugo Chávez, the president of Venezuela. And one thing about Chávez, who I’ve known for many years, is that he doesn’t let go of his nation’s oil on the cheap. He is a cornerstone of OPEC. And Venezuela’s been selling heavy crude at a premium to the price paid in Texas, because it costs more to get heavy oil from Venezuela than it does to get light oil down the road from Texas. But they have no choice, the Koch brothers, but paying Hugo for his gunky oil, [because the Gulf coast refineries, especially those controlled by the Koch brothers in Flint Hills, can really only handle heavy crude oil].

Now, on the other hand, the Canadians not only are selling for less than Texas oil—they’re selling, as of today—if you check out this week’s reports, about $33 a barrel less is the price of West Canada Sands (WCS) oil, as they call it, versus WTI, the West Texas Intermediate. So you’re saving about $35 a barrel—$35 a barrel—if you can get the oil from Canada as opposed to Venezuela. So they’ve got to cut off Chávez and they’ve got to bring the oil in from Canada.

And that’s the reason why we are talking about endangering the most sensitive aquifers and important—that is, water sources in America—to have a pipe with the filthiest oil in the planet, the most polluting oil on the planet, to drag it all the way from Canada all the way down to Texas so that the Koch brothers at Flint Hills can make—their savings would be about $2 billion a year that the Koch brothers will make off our risking the aquifers across the United States.

Because they really need the money!

Now, normally I’m not in favor of demonizing billionaires, not even the Koch Brothers; it has always seemed to me that the problem isn’t individual “bad apples” but the class of billionaires as such. On the other hand, since there are really so few billionaires (by comparison to the world population) perhaps each one should be considered in “a class by themselves.” This member of a singleton class sets out to destroy the acquifers of the Great Plains, that one Amazonia, and so forth.

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About Lambert Strether

Readers, I have had a correspondent characterize my views as realistic cynical. Let me briefly explain them. I believe in universal programs that provide concrete material benefits, especially to the working class. Medicare for All is the prime example, but tuition-free college and a Post Office Bank also fall under this heading. So do a Jobs Guarantee and a Debt Jubilee. Clearly, neither liberal Democrats nor conservative Republicans can deliver on such programs, because the two are different flavors of neoliberalism (“Because markets”). I don’t much care about the “ism” that delivers the benefits, although whichever one does have to put common humanity first, as opposed to markets. Could be a second FDR saving capitalism, democratic socialism leashing and collaring it, or communism razing it. I don’t much care, as long as the benefits are delivered. To me, the key issue — and this is why Medicare for All is always first with me — is the tens of thousands of excess “deaths from despair,” as described by the Case-Deaton study, and other recent studies. That enormous body count makes Medicare for All, at the very least, a moral and strategic imperative. And that level of suffering and organic damage makes the concerns of identity politics — even the worthy fight to help the refugees Bush, Obama, and Clinton’s wars created — bright shiny objects by comparison. Hence my frustration with the news flow — currently in my view the swirling intersection of two, separate Shock Doctrine campaigns, one by the Administration, and the other by out-of-power liberals and their allies in the State and in the press — a news flow that constantly forces me to focus on matters that I regard as of secondary importance to the excess deaths. What kind of political economy is it that halts or even reverses the increases in life expectancy that civilized societies have achieved? I am also very hopeful that the continuing destruction of both party establishments will open the space for voices supporting programs similar to those I have listed; let’s call such voices “the left.” Volatility creates opportunity, especially if the Democrat establishment, which puts markets first and opposes all such programs, isn’t allowed to get back into the saddle. Eyes on the prize! I love the tactical level, and secretly love even the horse race, since I’ve been blogging about it daily for fourteen years, but everything I write has this perspective at the back of it.


  1. different clue

    Koch or no Koch, Obama wants this pipeline to go through anyway. That’s why he already long-since approved the Southern Half. The Southern Half is already being built I believe, and Obama will use it to justify and extort approval for the Northern Half.
    Harper and the Harperites also want it, Koch or no Koch.
    So I predict: Obama will approve the Keystone XL Pipeline Northern Half whenever he feels he can get away with it. If he feels he can’t get away with it in its obvious presently-hoped-for form, then he will authorise sneaky expansions and linkups and extensions of and between existing pipelines into and across Michigan, such as the Enbridge Pipelines.

    1. Lambert Strether Post author

      Hmm. Enbridge is IIRC East-West not North-South — in fact, a pipeline cutting Northern Maine in two via the “East West Corridor” is one way of getting the Enbridge pipeline to a port on the Atlantic for export.

      I agree that Obama will be sneaky and incremental, but I’m not sure that Enbridge is the way he will do it.

      1. different clue

        Good point.

        My feeling was that Obama and the Harperites would expand Enbridge to move Texalberta’s dilbit east enough to intercept pipelines going more or less south and then west, or maybe just southwest, to connect to the northern end of Keystone XL Southern Half, and get the Texalbertan dilbit
        to the Gulf that way. I had not thought of “out to the North Atlantic”. Are there refineries there able to process dilbit?

        Of course I still believe that Pure Keystone XL Northern Half remains Obama’s preferred choice.

        1. Aldous

          The Keystone XL pipeline is not only going to be used for tar sands bitumen. Petroleum Coke, a highly sought after by-product of bitumen upgrading, will be shipped down south. Petcoke is a cheap substitute for the coal industry. The largest global petcoke trader in the world is Florida based Oxbow Corporation, owned by William Koch – the brother of Charles and David Koch. The plot thickens.

          “Analysts have shown that a typical 1 gigawatt coal plant can save around $120 million per year in fuel costs by blending petcoke with coal in their boilers. That sounds to us like a boon for coal-fired generators and a bad deal for cleaner fuels competing with coal in a tight market.”


        2. nonclassical

          …just thinking-does anyone think this has anything to do with “NAFTA HIGHWAY”, now reworked (lots of negative publicity) to “TPP”=”Trans-Pacific Partnership”, including highway from 2 ports, Mexico, 100 yard wide freeway, fenced, from, all the way (no customs stops) to Kansas City, then branching off
          to west coast, east coast, and Canada…have friend lives on Mexican border where bridge is being built for…he says. I would say he’s reliable enough..met him just over a year ago…his family original Texican American…

          1. nonclassical

            hmmmnnnn….checking out the Greg Pallast video, the XL DOES in fact mirror or follow the “NAFTA HIGHWAY” proposed to go from Mexico to Kansas City, courtesy of Mexican drivers…no American transport=cut out trucker’s union, American truckers..ports in Mexico are also supposedly currently being constructed…one on east coast, one on west coast, for ships currently unloaded
            in U.S., with U.S. labor…from container ships…

          2. nonclassical


            one further thought-container ships into Mexico, leading all directions north, Mexican truckers, with oil tankers out of Mexico, to China, rest of world…hmmmnnn…

      2. Susan the other

        Just thinking about yesterday’s post (Wade from FT) about the the dance we are doing with China. I also read Palast’s article about the Koch’s Venezuelan-crude refineries and thought why don’t we do our usual – just go in a-la the Middle East – and appropriate it all? Duh. And it dawned on me why. Because China has a virtual colony in British Columbia; because China is very interested in West Canada Sands and they have been proposing a pipeline to the Pacific. Keystone Pipe Line with links to east and south is just another maneuver so China doesn’t get any of it before we do. It is a virtual military decision.

        1. different clue

          A lot of the land from Tar Sandistan to the Gulfa Mexico is flat or flatish and deep or deepish soil and subsoil easy to dig in. Whereat trying to ram a pipeline over the Canadian Rockies and then over the Canadian Cascades/ Coast Ranges as well would be much harder. The Harperites keep floating the “Pipeline to the Pacific” idea to extort compliance from America with their own Harperite Keystone XL wishes.

        2. Roland

          Twinning the Kinder Morgan pipeline from Alberta to Vancouver would be fairly easy and quick.

          The “Northern Gateway” pipeline, which would run to the port city of Kitimat, is more problematic from both the environmental and political points of view. However, the ocean tanker route out of that fjord is probably safer than putting more tankers through the Straight of Juan de Fuca (i.e from Vancouver).

          Harper is a continentalist and obviously would prefer selling Canadian tar sands oil to the USA. But Harper is also a politician whose political power-base lies in Alberta and in the petroelum industry.

          Canada cannot get a good price for the high-cost tar sands oil because of the lack of alternative consumer markets, so I think Harper is actually serious about the China option. The pricing problem will only get worse for about another decade, since the USA is willing to frack itself to the max.

          We’ll find out whether H’s loyalties lie first with the Drone Zombie Empire, or with his home province of Tarsandistan.

          Harper’s best hope to get himself out of the dilemma is for another war in the Middle East, which would crank up world energy prices so much that the discount suffered by Alberta oil would no longer matter.

          1. Birch

            “…so I think Harper is actually serious about the China option.”

            I’m sure there’s a reason he’s essentially destroyed the research and enforcement capabilities of the environmental areas of government, largely eliminated the environmental review process for mega projects like pipelines, and reclassified navigable waterways (the bigger rivers) so they and their fishes are no longer protected by the legislation they’re supposed to be, and it wasn’t about austerity.

          2. nonclassical

            ..here’s the “reason”:

            Hot Topics RSS Updates






            TUESDAY, OCT 23, 2012 09:13 AM PDT
            Trans-Pacific Partnership: The biggest trade deal you’ve never heard of
            A huge but little-known trade agreement could transform America’s foreign relations. What it is and why it matters
            BY MATT STOLLER
            531 213 10


            “President Barack Obama, center, takes part in the Trans-Pacific Partnership meeting at the APEC summit in Yokohama, Sunday, Nov. 14, 2010. Pictured left to right: Prime Minister Naoto Kan of Japan, Vietnamese President Nguyen Minh Triet, Prime Minister Julia Gillard of Australia, Chilean President Sebastian Pinera, Prime Minister Lee Hsien Loong of Singapore, President Obama, Prime Minister John Key of New Zealand, Sultan Hassanal Bolkiah of Brunei, President Alan Garcia of Peru, Malaysian Deputy Prime Minister Muhyiddin Yassin.(AP Photo/Charles Dharapak) (Credit: Charles Dharapak)
            If you listened to the debate last night between Barack Obama and Mitt Romney on foreign policy, you would have heard a great deal on Israel, Iran and Libya, and a bit on China. The two rivals even touched on education policy, military spending and tax cuts for the wealthy. What you would not have heard was any mention of what could potentially be the most significant foreign and domestic policy initiative of the Obama administration: the Trans-Pacific Partnership. This agreement is a core part of the “Asia pivot” that has occupied the activities of think tanks and policymakers in Washington but remained hidden by the tinsel and confetti of the election. But more than any other policy, the trends the TPP represents could restructure American foreign relations, and potentially the economy itself.

            Why isn’t trade a part of the election? After all, in 1992, Ross Perot made the last successful third-party run for the presidency, mostly on the strength of his anti-NAFTA rhetoric. Today, however, on the core question of these trade agreements, the parties basically agree. President Barack Obama has pledged to double U.S. exports as a core policy goal, and the Democratic platform lists the TPP as a “historic high-standard agreement” that will help accomplish this. The GOP platform pledges that “a Republican President will complete negotiations for a Trans-Pacific Partnership to open rapidly developing Asian markets to U.S. products.” Both party leaders argue that exports are one key to creating high-quality American jobs.

            Whoever wins, the TPP will be a flashpoint of the next administration’s foreign and domestic policy architecture. It’s worth understanding just what this agreement is, and why it matters.

            What is the Trans-Pacific Partnership?

            The Trans-Pacific Partnership is the first international commercial agreement pursued by this administration to date from scratch. And, it would be the largest one since the 1995 World Trade Organization. It would link Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore, Vietnam, Mexico and Canada into a “free trade” zone similar to that of NAFTA. The subject matter being negotiated extends far beyond traditional trade matters. TPP’s 29 chapters would set binding rules on everything from service-sector regulation, investment, patents and copyrights, government procurement, financial regulation, and labor and environmental standards, as well as trade in industrial goods and agriculture.

            Who negotiates this agreement?

            The TPP is being negotiated by an agency called the Office of the United States Trade Representative. As with other such agreements, Congress must vote to approve it, most likely under a “Fast Track” provision that prohibits any amendments and limits debate. Trade, though constitutionally a congressional prerogative, is now firmly in the hands of the executive branch. And “trade” negotiations have become a venue for rewriting wide swaths of domestic non-trade policy traditionally determined by Congress and state legislatures.

            The current USTR is a former Dallas mayor and former corporate lobbyist named Ron Kirk. Michael Froman, a deputy assistant to the president and deputy national security advisor for international affairs, is also heavily involved. Froman is a disciple of former Treasury Secretary Robert Rubin who followed him to Citigroup, and headed the Obama transition team in 2008. According to journalist Matt Taibbi, Froman apparently led the hiring of Tim Geithner for the Treasury secretary role. The philosophy behind these international agreements thus follow the model laid down during the Clinton administration.

            Is this a new direction for American “trade” policy?

            Not really. The TPP continues a direction set by Bill Clinton when he passed NAFTA, helped create the World Trade Organization and gave China new permanent access to the U.S. market. This policy can best be characterized as making the world an easier place to do business for multinational corporations. Aside from reducing tariffs, a global policy the U.S. has encouraged since the Roosevelt administration, NAFTA-style agreements have provisions that constrain domestic food safety, environmental and health regulations, shield foreign investment capital from domestic laws, and generally transfer sovereignty from the government to the corporate sector. Consequences of these kinds of trade agreements include offshoring of U.S. manufacturing and service-sector jobs, inexpensive imported products, expanded global reach of U.S. multinationals, and less bargaining leverage for labor. The debate over this direction in trade policy was particularly acute in the early 1990s, and NAFTA serves as an effective symbol of agreements that follow the basic model.

            In 1992, NAFTA was highly controversial for a number of reasons; third-party presidential candidate and businessman Ross Perot argued that it would cause a “giant sucking sound” of American jobs heading to Mexico. Today, the U.S. has lost one out of every four manufacturing jobs that existed before NAFTA – over 5 million with 42,000 factories closed. A modest trade surplus with Mexico was replaced with a large, persistent deficit. As documented in “The Selling of Free Trade,” NAFTA’s new investor protections dramatically increased the ability of corporations to outsource entire factories to Mexico, which reduced union bargaining leverage. The era of wage declines and pension cuts did not begin with NAFTA, but the agreement and a wave of similar pacts that replicated its terms were contributors to the decline of bargaining power of the American worker. U.S. real median wages now hover at 1972 levels with levels of income inequality equalling those of the pre-New Deal state. The USTR argues that NAFTA has been a success, pointing to dramatically higher levels of overall trade flows between the U.S., Mexico and Canada and higher macro-economic growth in the U.S. since NAFTA’s implementation.

            The most controversial part of NAFTA is the investment provision. It not only removes the risks usually associated with offshoring production to low-wage countries. It also allows foreign corporations investing in the U.S. extra-legal rights to dispute American environmental, labor or consumer protections in foreign tribunals favorable to corporate interests, to demand taxpayer compensation for having to meet the same norms as domestic firms. NAFTA is just one agreement; U.S. trade agreements, including the World Trade Organization, also allow imposition of indefinite trade sanctions if the U.S. does not change its domestic laws to meet the pact’s limits on financial, environmental and other public interest regulation. Recent cases of U.S. law being slammed by the WTO include dolphin-safe tuna labeling requirements, country-of-origin meat labeling and the ban on candy and clove-flavored cigarettes. In addition, states and municipalities must bear the cost of helping to defend their regulations in international tribunals (such as California spending $8 million to successfully defend its right to ban the harmful gasoline additive MTBE or regulate mining on state lands).

            What exactly is in the Trans-Pacific Partnership?

            It’s hard to know. While negotiations started in 2007, most negotiating documents and draft chapters are classified. Stakeholders — including 600 corporations but also several labor unions including the AFL-CIO — can see the draft text, but the public and Congress cannot. Nevertheless, a few draft chapters have been leaked. Some of the more controversial aspects that have been revealed include making medicine in poor countries much more expensive, banning “Buy American” preferences in our procurement procedures, rules that may force the deregulation of the financial sector, and a new part of the agreement that might force the privatization of state-owned assets. I asked the U.S. trade representative what this meant for a set of American public assets — Amtrak, the Tennessee Valley Authority, the North Dakota state bank, and state-owned power plants.

            The spokesperson replied: “The focus of the U.S. proposal is on enterprises that are owned by central governments, are commercial in nature and compete directly with the private sector. However, our proposal recognizes that some SOEs play important social or quasi-governmental functions and includes flexibility for such entities.”

            In other words, the USTR isn’t going to say.

            I spoke with a few other international trade experts, and they gave me some more detail on what is in it. Lori Wallach, of Public Citizen, says the agreement strengthens investor provisions, allowing a whole set of new disputes to be removed from the U.S. courts and remanded to international tribunals run by corporate trade attorneys.

            Some of these include natural resource concessions from the federal government, contracts to run utilities (public-private partnerships), and procurement contracts relating to infrastructure construction. In order words, if a government entity wanted to prioritize awarding a government contract to a local firm, the TPP would allow foreign firms to challenge this as a TPP violation. And the challenge wouldn’t be in an American court, it would be held in an international tribunal.

            There are also concerns that the TPP would undermine access to HIV drugs and other essential medicines in countries that sign the agreement. A spokesperson for Doctors Without Borders even claimed, “Bush was better than Obama on this.” The ACLU claims that the copyright provisions in the TPP are “the biggest threat to free speech you’ve never heard of.” A former White House staffer told me that the USTR is simply working for the copyright industry to get legislative changes through trade agreements it couldn’t get when the Stop Online Piracy Act (SOPA) was stopped through coordinated Internet organizing (including the temporary shutdown of Wikipedia).

            Can this agreement expand U.S. exports?

            Again, it’s hard to know. America already has free trade agreements with six of the 10 countries in the TPP: Peru, Chile Australia, Singapore, Canada and Mexico. Together, they comprise 90 percent of the combined GDP of the prospective TPP bloc. Of the rest, only Malaysia, at 28 million people, and Vietnam at 87 million, are significant in terms of economic size. New Zealand has just 4.4 million people, and Brunei has only 405,000. So the TPP is not a significant enlargement of America’s actual trading relationships, although it would alter many non-trade domestic policies. As one person who has seen the agreement told me, “I have no idea what they think they are doing, it seems kind of dopey. This is like rearranging the food on your plate.”

            In addition, much of the framework for the TPP was inherited from earlier agreements, like NAFTA, the the Central America Free Trade Agreement, and similar agreements with Peru, Chile, South Korea, Colombia and Panama.

            But there are three arguments that this is an important agreement. One, unlike earlier trade agreements, the TPP would include a “docking” arrangement whereby other countries can simply join the free trade zone it sets up. This means that, rather than negotiating new agreements with different countries bilaterally, countries might simply join the Trans-Pacific Partnership. As Thea Lee of the AFL-CIO told me, the TPP could be the last trade agreement the U.S. negotiates. From now on, other countries can just join the TPP.

            Two, the Obama administration sometimes argues that this agreement is an attempt to counter China’s burgeoning power in the region. New America scholar Barry Lynn has pointed out that China has a dangerous amount of leverage on our economy. China could at any point choose to shut off the flow of light bulbs, iPhones, critical medicines, food preservatives, or any number of pieces of military hardware. Since the opening of the American marketplace to China in the mid-1990s, American multinational corporations have become dependent on and supplicants to the Chinese government. There is an argument that this agreement, by including countries in the Pacific region and not including China, counters this power. According to Lynn, however, this is not true. The TPP will have no serious impact on U.S. supply chain dependence on China. And, China would be free to dock into TPP. In May, USTR Kirk told Reuters that he “would love nothing more” than for China to join.

            Three, this agreement is the first agreement negotiated from the ground up by the Obama administration. As such, it sets the marker for trade policy for the foreseeable future. Lee said, “Overall, it’s very disappointing and frustrating. The TPP is the Obama administration’s first trade agreement that they are negotiating from the ground up. The administration had a lot of scope to really reform our trade policy and for the most part they didn’t take that opportunity.”

            The AFL-CIO, however, has not taken a position on the agreement, preferring to remain as a stakeholder at the negotiating table.

            Is this agreement secret?

            Yes and no. The public has no access to the text. Congress has extremely limited access. But there are many people who have seen the agreements, and several chapters have been leaked (by among others Rep. Darrell Issa (who opposes certain provisions of the agreement).

            What does it mean that the Trans-Pacific Partnership has bipartisan support?

            In 2008, Barack Obama pledged to renegotiate NAFTA. In particular, he said he would revisit the investment chapter of the agreement, and set out a new model of trade agreements for the U.S. He has broken these campaign promises, unequivocally. So now Americans are faced with the leadership of both political parties who are largely supportive of more NAFTA-style trade agreements. Yet, this isn’t new; it has been the case since 1992, when NAFTA was passed with Republican support under a Democratic president. It does add evidence to the idea that the 2012 election is a carefully cultivated political debate in which core economic issues have been carved out.

            What are the larger concerns about the TPP?

            There are two major concerns about agreements like this. One is that these agreements continue a transition from a democratic system toward one in which the rights of foreign corporations can trump laws passed by legislative bodies. As Lee put it, “Every time you have a new trade agreement you expand the number of companies who can challenge American laws.”

            The second concern is far more frightening. America’s dependence on China was not an issue in 1992, when NAFTA was signed. Today, it is. Lee noted, “We’ve put ourselves in a very vulnerable position because of the concentrated source of supply on critical resources, whether it’s China or elsewhere. I don’t agree that the TPP is the answer to this. In my view TPP, if anything, will exacerbate this. In TPP what’s being discussed are fairly weak rules of country of origin. Some of these countries may get substantial inputs from China. The TPP could become a conduit for the U.S. to become more dependent on China.” Barry Lynn spelled this out in a hypothetical disaster scenario, in which American tensions with China cause genuine friction. This isn’t far-fetched, as America is positioning military assets in the region.

            “Officials [in China] do not even need to impose some sort of across-the-board trade embargo to achieve their ends. Far more effective would be to put the squeeze on one industrial system or other, or one company or other, day after day, in a systematic fashion, until Washington cried uncle. The Pentagon has sketched out complex plans for how to respond to any use of force by China. Far more useful would be to know how the United States as a nation would respond when, suddenly, grandma can’t get her medicine. Or when, suddenly, the store shelves empty of batteries and lightbulbs. What does the president do when he has General Electric and Wal-Mart both on the phone, demanding the restoration of normal trade? Or when Apple’s stock plummets because the company can’t move any of its iPhones through Chinese ports?

            The only real option is to embrace the logic of industrial interdependence, hence to recognize that the only way for the United States to achieve its most vital national aims — indeed, to be taken seriously by China — is no longer to reposition its aircraft carriers, but to force its industrial and trading corporations to reposition the machines on which it depends. The United States does not need to bring all or even any of these systems of production home. But it can no longer continue to live in a world in which many activities remain in one location, under the control of one state, especially a strategic rival.”

            The TPP does not mitigate the threat of Chinese leverage over the American supply chain at all. It is, at best, a weak agreement that looks and sounds big, but does very little except further undermine the power of American government to maintain consumer, environmental and labor laws and protect public assets, while denying some medicine to poor people and making it easier for copyright owners to take down websites they don’t like. But as the TPP is being portrayed in elite circles as the answer to the China dilemma, perhaps the biggest danger inherent in the TPP is that the enormous threat implied in China controlling America’s industrial base is being ignored, yet again.”

        3. nonclassical



          “The TPP has been cleverly misbranded as a trade agreement by its corporate boosters. As a result, since George W. Bush initiated negotiations in 2008, it has cruised along under the radar. The Obama administration initially paused the talks, ostensibly to develop a new approach compatible with candidate Obama’s pledges to replace the old NAFTA-based trade model. But by late 2009, talks restarted just where Bush had left off.

          Countries would be obliged to conform all their domestic laws and regulations to the TPP’s rules—in effect, a corporate coup d’état. The proposed pact would limit even how governments can spend their tax dollars. Buy America and other Buy Local procurement preferences that invest in the US economy would be banned, and “sweat-free,” human rights or environmental conditions on government contracts could be challenged. If the TPP comes to fruition, its retrograde rules could be altered only if all countries agreed, regardless of domestic election outcomes or changes in public opinion. And unlike much domestic legislation, the TPP would have no expiration date.

          Failure to conform domestic laws to the rules would subject countries to lawsuits before TPP tribunals empowered to authorize trade sanctions against member countries. The leaked investment chapter also shows that the TPP would expand the parallel legal system included in NAFTA. Called Investor-State Dispute Resolution, it empowers corporations to sue governments—outside their domestic court systems—over any action the corporations believe undermines their expected future profits or rights under the pact. Three-person international tribunals of attorneys from the private sector would hear these cases. The lawyers rotate between serving as “judges”—empowered to order governments to pay corporations unlimited amounts in fines—and representing the corporations that use this system to raid government treasuries. The NAFTA version of this scheme has forced governments to pay more than $350 million to corporations after suits against toxic bans, land-use policies, forestry rules and more.”

      3. James

        Mon, 2013-02-11 00:44BRENDAN DEMELLE
        Study Confirms Tea Party Was Created by Big Tobacco and Billionaires
        To quarterback behind the scenes, third-party efforts’: the tobacco industry and the Tea Party
        Amanda Fallin, Rachel Grana, Stanton A Glantz

        We had already profiled Ron Paul’s undeniable links to the Koch Brothers:

  2. sheepdog

    There is a major Koch refinery just south of Minneapolis in Minnesota. So why build a pipeline to Texas?

    “Flint Hills Resources’ Pine Bend Refinery in Rosemount, Minn., is among the top processors of Canadian crude in the United States and a leader in providing cleaner-burning and high-performance fuels.”

    1. different clue

      They want to move way vastly more dilbit than what one refinery in Minnesota can handle. ( Or than what one Marathon refinery in Detroit can handle).

    2. Mary Bess

      Isn’t the oil the Kochs want to ship to Texas intended for the international market, not the US market?

      Sidebar: notice how the Kochs have moved in on PBS? The biggest climate deniers are not sponsoring science programs on public television.

      1. Hypothetical_Taxpayer

        Because all of our oil used to come from Texas, offshore Gulf and OPEC, most of our refining and ocean port terminal capacity is in the Texas-Louisiana region. Hence, they want to bring the crude to the existing infrastructure.

        Harper seems determined to export tar sands sands one way or the other. he has been talking to the chinese about financing a pipeline from Alberta to Vancouver as an alternative to exporting to the US. They will try and get the world price of oil one way or the other.

  3. Paul Tioxon

    Hmm, you know Lambert, lumping all billionaires together, to demonize one over the others does play into the division of evil in to two, the one evil and the lesser. Still, both evil, just some less so. But, you are nuancing here so let me support you in that. Really cheap oil has people all over America, the ones that want cheap oil that is, falling over themselves. Canadian tar sand oil and Bakken oil, are both cheaper than the other stuff. The East Coast refineries which were almost closed down, due a number of reasons, have been reborn. One is operating under the ownership of Delta Airlines, to make jet fuel exclusively and is bringing it by rail car. A second refinery sold off by the now defunct Sunoco Oil business, is now being operated by the Carlyle Group with another partner. They too are preparing for rail delivery of shale oil.


    “New trends in the oil business had threatened to shut down Sunoco’s 330,000-barrel-a-day-Philadelphia refinery. Sunoco relied heavily on relatively expensive light sweet crude oil — which is low in sulfur and relatively easy to refine into gasoline and heating oil.

    That had become a big disadvantage. The surge in U.S. oil supplies derived from shale and the pipeline bottleneck in the hub at Cushing, Okla., had driven down the price of the U.S. benchmark crude, West Texas Intermediate used by many Midwest and Gulf Coast refiners. But the Philadelphia refinery imported oil primarily from West and North Africa that is linked to the much higher London benchmark, Brent crude. The gap between the benchmarks is about $23 a barrel.

    Meanwhile, the ability to crank up prices to motorists had ebbed. According to an open letter from Sunoco chief executive Brian P. MacDonald published in March in the Philadelphia Inquirer, the demand for gasoline on the East Coast had declined 12 percent since 2007 and is expected to fall further.”

    Obama gave the green light for this rail to the East delivery operation and it is only expanding. On the New Jersey side of the mighty Delaware river, another mothballed fossil fuel brownfield is being put back into the game with oil by rail.


    And, oil refinery being a major business for almost a century along the Delaware, even the state of Delaware, with its chemical processing and oil refining infrastructure wants in on Heavy crude from the Canadian Bakken fields.


    Now, I am about to invoke the political rule of reward your friends and punish your enemies. Since much of the East Coast oil was imported, especially from Nigeria, replacing it with domestic and Canadian Bakken Field product is a no brainer. With the Carlyle Group, and union leader and local power broker Congressman Bob Brady of Philadelphia making the connection with Gene Sperling in the White House, you would think that if all of the Bakken oil pumped out that is going to America is taken by the East Coast, then how much can be left to send to Texas? And if the Koch Bros and Texas as Obama’s sworn enemies, then why should he help them, when he has plenty of East Coast Refineries creating jobs, absorbing hedge fund money from the Carlyle Group and giving the American and Canadian railroads something to do, now that coal is being used less due to fracking natural gas. Punish your enemies, because, plenty of jobs and money are being made with the oil, by your friends. There seems to NO reason to build a pipeline, when crude by rail is ready to haul, without the environmental catastrophe.



    1. different clue

      I believe I have read that the amounts of bitumen in the Tar Sands vastly outnumber the amounts of oil in the Bakken shales. When the shale-borne oil is all pumped out there will still be vast masses of Tar in Alberta ready to pipe IF the pipelines exist to pipe it in. If so, the industry and its Obama will pursue “all of the above” and Obama will try approving the Keystone XL Northern Half just as he always wanted to do, right from the start.

  4. diptherio

    I read Palast’s article on his website covering this yesterday. This explains why Obama has been so eager to go along with this anti-environment plan, Chavez being at the top of our enemies list (dirty Socialist that he is). Let’s see if any MSM outlets pick up on this (haha, I crack myself up sometimes).

    1. from Mexico

      It’s not just Chavez. Obama is greatly escalating aggression against all of Latin America, from Mexico to Argentina.

      The natives are getting restless, demanding sovereignty and democracy, demands which a good neo-imperialist like Obama feels necessary to crush. This article (in English) describes the rebellion that is taking place:

      “CELAC Rising: The Monroe Doctrine Turned on Its Head?”

      Global Village published an article this month (in Spanish) which describes the nuts and bolts of Obama’s new war on Latin America.


      “War with a strategic objective is the primoridal interest of the United States,” the article asserts. And “Military Operations in Urban Terrain,” according to the military analyst Michael C. Desch, is the “vanguard of military doctrine and planning” in Latin America and “an important mission for the US army in the future.” “Urban war consists of constructing a social enemy, with stigmatizations, assigning him a personality, behavior and profile, giving him the image of a revolutonary youth, a dangerous Indian, a treacherous peasant, a terrorist labor leader or a violent community leader.”

      After Federico Franco, in a US-backed coup, rose to power in Paraguay in June 2012, the US has wasted no time in making Paraguay a “platform of aggression of US politics in the Southern Cone.” Under the auspices of the US Southern Command and the DEA (US Drug Enforcement Agency), it has greatly accelerated the militarization of the gran Chaco region.

      Chile has also agreed to allow the US Southern Command to operate out of the military base in Concón, Valparaíso, with elite Special Forces whose speciality is urban warfare.

      The United States Agency for International Development (USAID) and Instituto Latinoamericano de Ciudadania (ILC) work hand-in-glove with the Southern Command and the DEA, the article goes on to allege, which strive to gain popular support for either overt US military incursions or covert US-backed military interventions into Latin America.

        1. nonclassical

          digi-documented in these books; many, many pages of footnoted documentation:



      1. Susan the other

        Remember Mitt Romney? You know, “the most uninfluential man of the year” according to GQ. One of his goals, in fact one of the points he made in his speeches, was his desire to go into Latin America. Go into in the military sense. The moment he said it I knew it was on Obama’s agenda. (Of course Obama wouldn’t say Latin America if he had a mouth full.) And voila. He, Mitt, also said Russia was our enemy and he wanted to just have it out with Russia, or he implied he wanted to have it out with Russia. He sounded very John McCain about Russia. Wonder if that’s why Russia is keeping such a low profile. It’s stupefying how we and our closest allies have decided to take on the entire world these days.

  5. Eric Patton

    This is how capitalism works. If you seriously want to get back at the Koch brothers, and others like them, the only way you can do this is by effectively challenging the system. If you don’t, then you’re being ignored.

    1. hunkerdown

      Change begins in one’s own bathroom. Buy a bidet instead of Koch-made toilet paper. It’ll pay for itself within a year in most cases.

  6. Training

    Again with the Aquifer. It isn’t about water. It’s about the transportation of resources.

    No Pipeline means Trains (traveling over the Aquifer) will move this oil.

    As the article above states, there is a $33 spread. More than enough to cover the $6 premium to ship it via trains instead of pipeline.

    And our buddy Warren Buffett gets rich from BNSF transporting the oil.

  7. Scylla

    I hate to say this, but I do not think you can lay this one at the feet of the Koch brothers. This pipline is being pushed by Canada, the canadian oil companies (ie Suncor)and the chinese, who are buying up oil rights in canada. The main reason that oil from Canada is priced $35 dollars under WTI (and a good part of the reason that WTI is trading for $10-$20 less than Brent) is solely because it is largely landlocked and cannot get to the international market. If people think that prices will stay low once this oil has a way to get to the international market in much larger volumes, you are sadly mistaken.

    1. from Mexico

      I wonder if the price of Venezuelan crude that Palast is using in his analysis is erroneous.

      Most of Venezuela’s oil is of the heavy, sour grade. This always sells for a considerable discount below light, sweet crude such as West Texas Intermediate, as is explained in greater detail here:

      ***beginning of quote***
      Not all the black gooey stuff that comes out of the ground is the same. Crude oil produced by different fields differs importantly in viscosity and sulfur content.The more viscous crudes (as measured by a lower API gravity) are called “heavier,” and those with higher sulfur content are called “sour” (as opposed to low-sulfur “sweet” crude). The heavier and more sour the crude, the more difficult and expensive it is to turn into usable refined products. The price of oil you usually hear quoted (such as the recent highs of $67 a barrel) is the price of a light, sweet grade like West Texas Intermediate.

      The graph at the right shows the price differential (in dollars per barrel) for European Brent (a relatively light, sweet crude) over Mexican Maya (a heavier sour). The price premium for light sweets had typically been about $5 a barrel up until last summer, when it began rising quickly, now standing at triple its earlier value.


      ***end of quote***

      Finding out what Venezuela sells its heavy, sour crude for is not an easy task. If one looks at the webpage of the Venezuelan government, one could easily be misled into believing it gets a premium price:


      However, as Bloomberg points out, the “oil price” published by the Venezuelan government is actually a “reference price based on an average of all crudes handled by the state oil company, Petroleos de Venezuela. The oil basket is comprised of 70 percent crude oil and 30 percent oil products such as gasoline and distillates.”


      1. from Mexico

        I did find some information on Venezuelan crude prices, and the price that Venezuela sells its heavy, sour crude for seems pretty much in line with what Mexico sells its for. In November 2012, Venezuela’s Merey sold for $93.20/barrel F.O.B. (The price actually charged at the producing country’s port of loading.) Mexican Mayan, another heavy sour, sold for $91.04 F.O.B.


        From that same report, one can see that in October 2012, Mexican Mayan sold for $96.83/barrel F.O.B and Canadian Lloydminster sold for $81.47/barrel F.O.B.

        In October 2012, Europe Brent sold for $111.71 F.O.B.

        So Palast is comparing the price of apples to the price of oranges. If we compare apples to apples, the $35 differential between Veneuzuelan heavy sour and Canadian heavy sour seems like an exageration.

  8. Hypothetical_Taxpayer

    The other thing is, I’m not so sure I buy into the idea that an above ground oil pipeline is a significant risk to aquifers. Haven’t read up on it I’ll admit, but I have stood next to a pipeline pumping station a couple times.

    They have pressure sensors which shut down valves when a pressure drop due to a rupture is sensed. So the volume of a spill is somewhat limited. Then even shallow aquifers are more than a hundred feet down and dirt makes a great filter, especially with heavy oil. Oil and water don’t mix, so rain won’t wash it down thru the soil.

    Then we have a bunch of pipelines all over the place and I never hear of big pipeline ruptures so far in the news.

    Makes me wonder if this is unwarranted hysteria?

    1. pdooley

      It’s about using the atmosphere as a sewer, as well as depleting fresh water resources to extract the crap. Aquifer is a red herring –it will be pumped dry in for soil mining “farming” anyway.

      1. Jardinero1

        Agreed, the single largest depleters of the aquifer are the corn farmers producing more corn than we need to eat because of subsidies to support ethanol production.

      1. McKillop

        I do not want to be mistakenly seen as a person who defends his ‘country’, right or wrong, as being ‘right’ but I am always disturbed by the description of companies as American or Canadian or Brazilian or Swiss. Or whatever.
        Most companies (large corporations) are merely registered in various countries – usually for financial-military reasons. Or for legal and regulatory loop-holes.
        To me, calling a company that has no loyalty to the community or country after a country simply plays into our tribalism, our chauvinism.
        We might be better served to separate canadian from Canadians, american from Americans -people from the corrupt institutions that prey upon those people.

        1. different clue

          That is a fair point and a fair question. To what extent is Enbridge really “Canadian” . . .

          Since the dilbit that Enbridge moves through its pipelines is primarily I believe derived from the Athabasca Tar Beds, would it be more fair to refer to Enbridge as part of the Petro-Harperite Conspiracy to move the world’s nearly-largest deposit of Tar out of Alberta, into the engines of the world, out through the smokestacks and tailpipes of the world, and into the Earth’s collective atmosphere? Would that be more fair?

          1. Birch

            Well, there’s some pretty tall buildings in Edmonton with the Enbridge logo all over them. I haven’t seen that outside Canada. Also, Enbridge gets particular support from Harperites and Canadian law that non-Canadian companies don’t.

            There are regular massive pipeline blowouts. Alaska had a particularly huge one a couple years ago on the Prudoh Bay line, and they experience more moderate ones often. Russia has them all the time. You hear about them on the CBC every so often.

            The blow outs are written into the environmental review section of the pipeline proposals, with estimated annual loss rates. The leaks are a planned part of the process; a cost of doing business. It’s a massive subsidy to the project by all those who live downstream, regardless of water table.

            Enbridge’s western route is particularly crazy because there are so many big mountains and fluctuating rivers that do what they want. Many sections of road in the coastal valleys of BC have totally washed away from mountain-side to mountain-side, all in the past three years. And those people depend on their fish for long-term viability.

          2. McKillop

            Are all citizens of the United States of America responsible for the policies and practices of the Bank of America? Of the foreign policies?
            For years I’ve listened to people denigrate ‘americans’ or ‘mexicans’ or (ohh, how unfair!) canadians.
            In my hometown I listened to people yap about how inco, a mining company of considerable ‘evil’ was a ‘canadian’ company. Lately bought out by the ‘brazilian vale, inco became less nasty BECAUSE it had been Canadian -with head offices in New York.
            I’ve not voted for harper, nor have I ever supported enbridge: It is registered in Canada. It is not “canadian” no matter how many buildings are marked by its logos.
            I thank you for your response but question the alternative you offer as being more sarcastic (or unwieldy) than rehabilitative.
            People pay fortunes to ensure that language is used to their advantage, yeh? Must we be outnumbered and outgunned and badly spoken?

          3. different clue

            To McKillop actually,

            If a black hat perpetrator company is based in Canada and makes it money from product extracted in Canada and shipped out from Canada, then it is a Canadian company. Enbridge is a Canadian company. Smart people know the difference between a Canadian company and citizen natural-person inhabitants of Canada.

            If a black hat perpetrator company is based in America and it makes money from selling various kinds of soil polluting cancer juice and from establishing tollgate rent-extraction patent-monopolies on patented xeno-FrankenGMO
            hijacked seeds made in America, then it is an American company. Monsanto is an American company. Smart people know the difference between citizen natural-person inhabitants of America and Monsanto.

            Demands that I or anyone spare someone’s feelings by referring to an American company or a Canadian company as something other than an American comopany or a Canadian company are based on mere Political Correctness.

  9. Brooklin Bridge

    This member of a singleton class[…]

    Ok, you’ve told us about their Constructors, now tell us about their Destructors (they can’t possibly be part of “managed memory”, they’re the ones that do the managing, so they must have an explicit Destructor). How do we call it?

        1. Brooklin Bridge

          It did seem as though you singled them out for blame, not as the root of all evil, but certainly as a major engine behind the pipeline (as in “singleton” or “so few billionairs” or “on the other hand[…] a class by themselves”). The rule of law, if it applied to all equally, would ultimately deal with individuals and in the case of the class, Billionaires, very likely with the Koch brothers for the reason you mentioned; there aren’t very many of them so blame tends to be difficult to diffuse. It’s difficult to imagine they would not be found guilty of some rather serious, even heinous crimes, in regards to the pipeline if only against the environment and therefore untold millions of people born and unborn.

          Their patronage of the recent NOVA episode that attempted to sanitize, romanticize, and make the growing use of Drones seem like “the adult solution”, is more than enough for me to feel totally justifed in singling them out.

      1. Brooklin Bridge

        I was just wondering when they became part of CS. Where did I say they were the designated sponsors of All evil? As to calling the destructor of a singleton instance, give me a break.

    1. hunkerdown

      They’ve taken great pains to separate their inheritance graphs and resource heaps from the rest of us. That’s like trying to call into a different domain altogether.

  10. jim b

    ok i grant that this is true that much of this oil will go to gulf coast refineries that refine heavy oil and will supplant venezuelan crude, and that some of the refined products will be exported. forgive me but i fail to grasp what is so horrible about this. i get that canadian tar sands have a higher co2 output than conventional oil, but so do venezuelan tar sands oil. its the same thing http://en.wikipedia.org/wiki/Orinoco_Belt. the other thing is we have this free trade agreement with canada that prevents us from blocking oil or any other imports that someone wants to buy in the US. so blocking this pipeline will not stop this oil from being imported, it just will be done on rail cars rather than through a pipe, which produce more co2 by burning the fuel for the trains, just as importing oil from venezuela produces more co2 for the fuel for the tankers. the reason the canadian oil is cheaper per barrel is it costs so much more to ship, if this pipeline is built the price of canadian oil will rise too.

    im concerned about global warming, but i get frustrated that so much energy is being put on this pipeline, which even if it is blocked will have no real world impact other than to help the business of rail companies who will bring the oil in instead. it would be much more effective to push for a european style gasoline tax to reduce demand for the oil. its like drugs, as long as there is demand there will be supply, no matter how many drug pushers you put in jail

    1. Gil Gamesh

      Ban new production. Tax carbon to offset the externalized costs. Invest in renewables (see A Path to Sustainable Energy by 2030, Jacobson & Delucchi 2009).

      Nonsense, you say? Vested interests (e.g., the Fossil Fuel Death Complex, the Kochs, Congress, the mass media) will never allow such policies from being implemented. Well….quitter.

  11. Gil Gamesh

    “Now, normally I’m not in favor of demonizing billionaires, not even the Koch Brothers; it has always seemed to me that the problem isn’t individual “bad apples” but the class of billionaires as such.” Lambert said.

    Oh, go ahead. Palast can supply the facts that justify the animus. But, point well taken. The problem is ths system that allows so much wealth to be concentrated in so few hands, at the expense of, inter alia, democractic governance.

    The bottom line: as long as there is one poor child, no billionaires.

  12. roaring mouse

    Author lets an enviro-freak bias encumber what may have otherwise been a useful article. Author fails to compare ‘filthness’ of Venezuelan heavy crude to ‘filthiness’ of Canadian crude. Author confuses sources of Canadian heavy oil with shale oil. Author makes no mention of the political consequences of enabling Hugo Chavez by buying his oil. Author makes no mention of the stability of the Canadian government, and its responsible foreign policy and goodwill toward the US. Author exhibits no understanding of how Gulf Coast refineries capable of handling heavy sour crude are FAR more specialized (and valuable) than simpler, older refineries. Authors fails to conclude that by enabling US refining to grow, the US increases its political sphere of influence, gives the US economic leverage versus tyrants like Chavez, and increases the number of high paying jobs that can be filled by Americans. In short, author is a fool.

  13. jfleni

    RE: Oil from everywhere. Look, why do we really need this vast amount of oil, either Venezuelan or Canadian?

    For Power generation? No way! Solar, wind, coal, some hydro, and the diminishing number of nukes have all that covered and more. For Diesel truck/train/ship transport? No, natural gas works even better and is being more widely used all the time.

    Answer number 1: FOR CARS – GAS BUGGIES? But the pent up demand for increased public transportation will be satisfied sooner or later; car registrations are falling quite sharply and fast (At 50 grand a pop, who can afford gas-buggies no matter how many gadgets they have), however batteries will probably not work out really well very soon, so that will at least put a floor under oil for a time.

    Considering how easy it is to manufacture motor fuel (methanol) from garbage, sewage, agricultural waste, and much more, motor fuel demand is bound to decrease slowly over time, despite the yells of car barons about “no gas”.

    Answer #2?: China? Maybe, but will do their own refining and exploration as they do now, with very little benefit for the good old USA. They know perfectly well that clotting up their heavily polluted country with gas-buggies is crazy, which is why they pay such close attention to good public transit.

    Real answer: Barry is a jumped-up, no business or legal experience lawyer, who has never really been in a courthouse, and whose political experience mostly consists of bowing to whichever plutocrat in a $4K suit has his attention at that moment, which explains why his policy is so confused, and confusing. Add to that a lack of advisors who are even more ignorant and inexperienced, and you get a real zoo. And that’s what we are seeing.

    1. hunkerdown

      1. Methanol is not a good mainstream motor fuel. Wikipedia makes a case: half the energy of gasoline per weight, much more corrosive than gasoline so not very compatible with the existing fleet, needs expensive reforming steps to turn into something close enough to gasoline for existing gas-buggies.

      2. I hate cliches, but “so was the other guy”. As far as the party corporations are concerned, the key performance indicator is cash, and they and their governing boards hire for maximum profitability.

  14. alano

    Attacking Chavez as a tyrant is ridiculous. The poor and disadvantaged in Venezuela have improved their existance under his leadership. It’s the greedy money grubbers here in the U.S. who are the real tyrants.

  15. telee

    The ecological impact of the tar sands extracion is alarming. The size of the operations are difficult to imagine. The impact on the indigenous people been devastating. We are seeing the distruction of the boreal forest and clean water. There have been accidents such as the latest at Fukishima which should result in millions of deaths. The BP fiasco in the Gulf of Mexico has been largely forgotten in spite of the ongoing environmental impact and affect of the health of residents. Even after that negligence it’s full speed ahead in the Artic. Now we have a boom in fracking with all its risks to potable water, the environment and people’s health. Global warming has been talked about for at least 50 years and yet production of greenhouse gases are only increasing. Are we not parasites who are destroying their host?

  16. Veri

    Ah, not actually. The US maintains standards for oil in order for oil to be used in the US. Keystone XL oil does not meet those standards and thus, will have to be exported. It is the same problem that is encountered by those who believe that tapping Anwar will increase domestic supplies, yet – in reality – won’t.

    We could use the oil in the US. If you like living in a place that has the same air quality as Beijing – toxic and deadly.

  17. peyton

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