Price of oil

Next week the cream of the world’s climate deniers will descend on Chicago for the Heartland Institute’s latest annual sceptic-fest.

The headline for the conference is “Real Science, Real Choices.”  That’s more fact-twisting propaganda from Heartland that has pushed climate denial for years.

The Institute was hoping for a bumper conference that would help it push its climate denial agenda, its credibility and funding.

But that looks like it is not going to happen. The conference will take place as Heartland is under pressure like never before.

The Institute is facing increasing financial and political isolation. Ever since the Institute ran its “Unabomber advert” earlier this month, its sponsors and donors have finally woken up to the realities of its dangerous climate denial extremism.

They are now dumping Heartland faster than rats on a fast sinking ship.  So far eleven companies have said they will no longer fund Heartland, including Eli Lilly, BB&T, Pepsi, GM, State Farm, Diageo, the Association of Bermuda Insurers and Reinsurers, Renaissance Re, XL Group, Allied World Assurance, and USAA..

“More than 100,000 Americans are telling corporations to stop polluting our democracy by supporting organizations like the Heartland Institute,” said Daniel Souweine, Campaign Director of Forecast the Facts. “Heartland’s remaining funders would be wise to heed their calls. Heartland’s radical agenda stains the reputation of any business that wants to be considered a responsible corporate citizen.”

However, surprisingly, some companies are standing by Heartland, risking serious reputational damage by doing so. Pharmaceutical giant Pfizer argues that it gets “significant benefits from our involvement” with the group.  Pfizer said its support for the climate deniers helps “advance our business objectives”.

Pfizer is adopting a completely nonsensical position here, arguing that, whilst it does not agree with Heartland’s position on climate change, it stands by its work on health care.

What it fails to understand is that climate change is a fundamental global health threat, and it is a key facet of health care policy. The Heartland Institute’s radical attacks on climate science include denial of the impacts on climate pollution on health care policy, including outrageous statements such as there is “overwhelming evidence for a positive effect of global warming on human health.”

In a damage limitation exercise, and to prevent further haemorrhaging in its funding, last Friday Heartland’s Finance, Insurance, and Real Estate project was spun off to become its own think tank, called the R Street Institute.

According to Ray J. Lehmann, the project’s director of public affairs, “one thing that will certainly change from ending our association with Heartland: R Street will not promote climate change skepticism.”

In another blow to Heartland, a meteorologist from the National Hurricane Center has asked to be disassociated from the organisation. Chris Landsea, the hurricane centre’s science and operations officer, reported that:

“The billboard campaign that you all have recently been displaying is not in good taste nor is it furthering the advancement of better understanding of how our climate fluctuates and changes. Please remove my name from your list of experts.”

The billboard advert was never intended to advance the better understanding of climate science.

But nor is next week’s conference. It is designed to carrying on trying to keep the controversy open about climate change, when the science is essentially closed.

In fact the advert and conference are just different parts of Heartland’s disinformation campaign. The sooner we realise that the better.

Credit: National Transportation Safety Board

Download our briefing on the tar sands exemption to the Oil Spill Liability Trust Fund here.

When Enbridge’s Line 6B burst open near Marshall, Michigan in July 2010 spewing over a million gallons of tar sands sludge into the Kalamazoo river watershed, funds were quickly released from the Oil Spill Liability Trust Fund to mobilize Environmental Protection Agency staff and other federal employees to assist and monitor clean up. But the tar sands companies that produced the oil that is still polluting Talmadge Creek nearly two years later have never paid a penny into the fund. Why? Because when payments into the fund were reinstated by the 2005 Energy Policy Act following a hiatus, someone convinced the IRS that tar sands crude was not crude oil, and therefore did not need to pay.

As a new report released today shows, the transport of tar sands oil through pipelines in the United States is exempt from payments into the Oil Spill Liability Trust Fund. This is a free ride worth over $375 million to tar sands oil producers between 2010 and 2017, including over $160 million for shippers on TransCanada’s Keystone pipeline system. This exemption is an unnecessary subsidy, and one that ignores the elevated risks of transporting tar sands crude oil relative to conventional crude. Logically, tar sands oil transport should be subject to a higher rate than conventional oil, not exempt.

The diluted bitumen that was being transported in Line 6B behaves differently than conventional crude oil when it spills. Natural gas liquids which are used to liquefy the bitumen so it will flow through a pipeline quickly evaporate posing a breathing hazard to anyone downwind. The heavy bitumen sludge left behind sinks to the bottom of the water body making it impossible to properly clean up.

This makes remedying a tar sands pipeline spill more difficult, less effective and much more expensive. So wouldn’t it seem like a good idea to charge a higher rate to tar sands producers as insurance that a spill can be properly addressed and monitored? You would have thought so, but in a political system that is bought by the highest bidder rational policymaking falls victim to special interests. The result is an irrational exemption worth over $30 million a year to an industry making billions while the taxpayer is increasingly liable when things go wrong.

And guess what? The industry plans to more than double the amount of tar sands oil passing through American pipelines over the next decades, making it less and less likely that the oil spill trust fund will have adequate funds to address a spill.

The fund is paid for by an 8-cents-per-barrel tax on oil produced in or imported into the United States. It is mandated to hold up to $2 billion with half of that available to address a single spill. In February 2012, it held a mere $130 million following large claims for the BP Gulf of Mexico spill and Enbridge’s Kalamazoo spill. Under the current exemption, as tar sands supplies increase, less and less money will flow into the fund. We have calculated that between 2010 and 2017, when the current provisions for the fund expire, tar sands producers are likely to save over $375 million due to the exemption. Yet tar sands spills are both more likely to happen and more damaging when they do.

Credit: Sue Connolly, Marshall, Michigan

But irrational and destructive subsidies for the oil and gas industry are not confined to the spill fund exemption. Senator Bernie Sanders (I-VT) and Rep. Keith Ellison (D-Minn.) introduced bills in Congress last week that target over $10 billion in subsidies, tax breaks and exemptions enjoyed by the oil and gas industry every year. The oil spill fund tar sands exemption is just one of many. These bills are unlikely to be fully debated because Congress receives tens of millions of dollars every year from the very beneficiaries of these subsidies. By our last count the industry got a 5,800% return on its investment in Congress.

The Kalamazoo tar sands spill caused real damage to people in Marshall, Michigan. Damage they are still suffering two years on and may be dealing with for many years to come. It makes no sense whatsoever to exempt tar sands oil from paying into the Oil Spill Liability Trust Fund, just as it makes no sense for America to continue to waiver royalties on Gulf of Mexico oil production or any of the other subsidies to an industry that pollutes with impunity while laughing all the way to the bank.

It’s another stark reminder of how American governance has been sold to the highest bidder.

—

Download our briefing on the tar sands exemption here

Tell your Congress members to support ending all fossil fuel subsidies and reject money from fossil fuel polluters here.

Last week, the god-father of climate science, James Hansen, who directs the NASA Goddard Institute for Space Studies, re-iterated his warning about exploiting the tar sands in an op-ed in the New York Times.

His warning was dire:  “Canada’s tar sands contain twice the amount of carbon dioxide emitted by global oil use in our entire history”,  he warned.  “If Canada proceeds and we do nothing, it will be game over for the climate … If this sounds apocalyptic, it is”.

Thanks to series of great Greenpeace investigations, we have long known about Koch’s funding of climate denial.  We also know about their involvement in the tar sands, and both I and Steve have blogged before about this before.

But a day after Hansen’s warning, with impeccable timing, InsideClimate News published the results of a long investigation into the secretive Koch brothers and their long involvement in Canada’s tar sands.

Although we already knew about their involvement, what is shocking is the extent of this involvement, which becomes apparent in this new investigation.

The new investigation reveals that “Koch Industries has touched virtually every aspect of the tar sands industry since the company established a toehold in Canada more than 50 years ago.”

At every step of the way the Koch brothers are involved.

The investigation reveals: “It has been involved in mining bitumen, the hydrocarbon resin found in the oil sands; in pipeline systems to collect and transport Canadian crude; in exporting the heavy oils to the U.S.; in refining the sulfurous, low-grade feedstock; and in the subsequent distribution and sale of a variety of finished products, from jet fuel to asphalt. The company has also created or collaborated with other companies that have become leading players in the development of Alberta’s oil resources, and it remains deeply invested in western Canada’s oil patch.”

The investigation discovered:

• The company is one of Canada’s largest crude oil purchasers, shippers and exporters, with more than 130 crude oil customers.

• The Koch brothers are among the largest U.S. refiners of oil sands crude, responsible for about 25 percent of imports.

• They are one of the largest holders of mineral leases in Alberta, where most of Canada’s tar sands deposits are located.  Almost 500 well sites and facilities tracked by regulators under the Koch name are scattered across the oil sands regions.

•  Koch owns pipelines in Minnesota and Wisconsin that import western Canadian crude to U.S. refineries and also distribute finished products to customers.

• They own and operate a 675,000 barrel oil terminal in Hardisty, Alberta, a major tar sands export hub

• And this year they kicked off a 10,000 barrel-a-day mining project in Alberta that could be the seed of a much larger project.

• Koch Industries has repeatedly denied any connection to the Keystone XL, although evidence compiled by Inside Climate News suggests otherwise.

Just as the brothers are heavily involved in US politics, they are also deeply embedded in Canadian politics too. As I have blogged before, in March last year the company added another lobbyist to its operations.   Alberta’s lobbyist registry shows that Koch Industries signed up a Calgary-based lobbyist to lobby the Provincial government on energy and resource development policy issues.

No prizes for guessing what Koch will be lobbying for: unrestricted exploitation of the tar sands, even if this does mean “game over for the climate”.

Members of Congress have taken almost $16 million from the oil, gas and coal industries so far in this 112th Congress. That puts this Congress on track to be the dirtiest ever.

The information comes to light as part of the latest update of DirtyEnergyMoney.com, a project of Oil Change International which uniquely refines and reveals campaign finance data from the Center for Responsive Politics. The work reveals a decade-long trend of the fossil fuel industry buying more and more influence on Capitol Hill. The full analysis is available here in pdf format.

Some disturbing details:

-       The top ten dirtiest members of the 112th Congress have taken just over $3 million. All but one are Republicans. John Boehner leads the way with almost $575,000.

-       The top ten House recipients have taken just over $2.5 million, and the top ten Senators are close behind, having taken just over $2 million.

-       Twelve members of Congress have taken more than $1 million from coal, oil and gas companies since 1999.

-       The companies doing the giving are led by the National Rural Electric Cooperative Association, which has provided just over $810,000. They are followed close behind by Exxon Mobil and Koch Industries, who have given $670,450 and $618,000 respectively.

Does it matter?

Yes, it would appear so. The evidence suggests that donations can indeed buy Congressional support for preserving subsidies, or weakening environmental regulations.

For example, earlier this year the Senate voted on the Repeal Big Oil Tax Subsidies Act, which would remove $2.4 billion in subsidies annually to the top 5 Big Oil companies. It failed to pass, with those voting against the measure taking an average of almost $48,000 from the industry, with those voting for it taking just over $23,000 on average.

Sure, that might be a coincidence. But when it happens time and time again, we need to stand up and take notice. Oil Change International has tracked 23 votes from the 112th Congress that affect dirty energy interests. The majority of these votes have been attempts by House Republicans to remove barriers to expand drilling or to diminish the power of regulators to oversee operations. In all of these cases, representatives and senators voting with the interests of dirty energy companies received substantially more from those interests than those who voted against. Coincidence? That is not our view.

 Ok, so what can we do about it?

Let’s not get too bogged down in how depressing this may seem. Let’s organize instead. We have the power to reverse this disturbing trend.  Here are some ways to get started:

-       Know your dirty number: Find out how much your decision-maker takes from the oil & gas and coal industries on the newly updated www.dirtyenergymoney.com. Use the tools on the site to send them an email and ask “What the f&*k?” (perhaps somewhat more tactfully) and demand they side with the many, not the money.

-       Use your voice around key battles related to fossil fuels, including subsidies, Keystone and fracking. We’ll keep you up to date on opportunities to speak out coming down the pike, and will appreciate your sharing your inspirations on our Facebook page.

This is a big week for conversations around subsidies in particular. Watch for another post soon about an opportunity to stop Congress from leaking over $11 billion in favors annually to the oil & gas and coal industries.

-This post was compiled by Karen Showalter with assistance from Steve Kretzmann.