May 20, 2011 / 9:15 PM / 7 years ago

Democrats probe Koch's interest in oil sands pipe

WASHINGTON (Reuters) - Democratic U.S. lawmakers have asked Congressional panels to look into whether Koch, an energy company led by brothers who are powerhouses in conservative politics, will benefit if the Obama administration approves a $7 billion pipeline to bring crude from Canada into the United States.

U.S. Representatives Henry Waxman and Bobby Rush wrote a letter on Friday to Republicans chairing the House Committee on Energy and Commerce and one of its subcommittees, asking them to request documents from Koch Industries regarding the extent to which the company would benefit if the Keystone XL oil sands line would be built.

Privately held Koch is co-owned by David Koch, the founder of Americans for Prosperity -- a group aligned with the conservative Tea Party movement -- and his brother Charles. The Koch family has also funded conservative causes in energy including giving $1 million to back a proposition in California last year that would have put on hold a state law to set limits on greenhouse gas emissions.

Friday’s letter to Representatives Fred Upton and Ed Whitfield, was sent ahead of a hearing the Republicans will hold on Monday on the benefits of the line.

It requests documents showing whether Koch, or any of its subsidiaries, is involved in exporting oil from the Canadian oil sands to the United States, or has plants to export such oil through the Keystone XL pipeline.

The pipeline could reduce U.S. dependence on oil from governments unfriendly to the United States including Venezuela, and ones in the Middle East. But environmentalists say the flow of crude could hamper Obama administration policies such as pushing vehicles to run on electricity and natural gas.

In addition, the U.S. Environmental Protection Agency says oil sands crude emits far more greenhouse gases over its life cycle than other petroleum burned in the United States.

Before sending the letter, staff for both Waxman and Rush asked Koch about its involvement with oil sands in Canada.

“The Koch representatives said that the Keystone XL pipeline has ‘nothing to do with any of our business’ and that Koch has ‘no financial interest’ in the pipeline,” the letter said.

In response to questions about the probe, Koch said in a statement: “As we explained to Representative Waxman’s staff yesterday, Koch neither supports nor opposes the Keystone Pipeline project, and ... we have no financial interest in the project. Given these facts, we are confused about why Koch is being singled out and inserted into these discussions.”

A recent report said Koch stands to benefit if the line, approval of which is currently being considered by the State Department, is built because the company owns an oil terminal where the line would begin and other facilities that could benefit. The report can be seen here: link.reuters.com/huq69r

The State Department hopes to make a decision on the line by the end of the year. If the EPA is not happy with the State Department’s decision, the final decision could be made by Obama.

Reporting by Timothy Gardner; Editing by Lisa Shumaker

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