Home » Posts tagged 'Koch Industries'
Tag Archives: Koch Industries
The largest, most-consistent money fueling the climate denial movement are a number of well-funded conservative foundations built with so-called “dark money,” or concealed donations, according to an analysis released Friday afternoon.
The study, by Drexel University environmental sociologist Robert Brulle, is the first academic effort to probe the organizational underpinnings and funding behind the climate denial movement.
It found that the amount of money flowing through third-party, pass-through foundations like Donors Trust and Donors Capital, whose funding cannot be traced, has risen dramatically over the past five years.
– Robert Brulle, Drexel University
In all, 140 foundations funneled $558 million to almost 100 climate denial organizations from 2003 to 2010.
Meanwhile the traceable cash flow from more traditional sources, such as Koch Industries and ExxonMobil, has disappeared.
The study was published Friday in the journal Climatic Change.
“The climate change countermovement has had a real political and ecological impact on the failure of the world to act on global warming,” Brulle said in a statement. “Like a play on Broadway, the countermovement has stars in the spotlight – often prominent contrarian scientists or conservative politicians – but behind the stars is an organizational structure of directors, script writers and producers.”
“If you want to understand what’s driving this movement, you have to look at what’s going on behind the scenes.”
To uncover that, Brulle developed a list of 118 influential climate denial organizations in the United States. He then coded data on philanthropic funding for each organization, combining information from the Foundation Center, a database of global philanthropy, with financial data submitted by organizations to the Internal Revenue Service.
According to Brulle, the largest and most consistent funders where a number of conservative foundations promoting “ultra-free-market ideas” in many realms, among them the Searle Freedom Trust, the John Williams Pope Foundation, the Howard Charitable Foundation and the Sarah Scaife Foundation.
Another key finding: From 2003 to 2007, Koch Affiliated Foundations and the ExxonMobil Foundation were “heavily involved” in funding climate change denial efforts. But Exxon hasn’t made a publically traceable contribution since 2008, and Koch’s efforts dramatically declined, Brulle said.
Coinciding with a decline in traceable funding, Brulle found a dramatic rise in the cash flowing to denial organizations from Donors Trust, a donor-directed foundation whose funders cannot be traced. This one foundation, the assessment found, now accounts for 25 percent of all traceable foundation funding used by organizations promoting the systematic denial of climate change.
[updated Dec. 24] Jeffrey Zysik, chief financial officer for DonorsTrust, said in an email that neither DonorsTrust nor Donors Capital Fund “take positions with respect to any issue advocated by its grantees.”
“As with all donor-advised fund programs, grant recommendations are received from account holders,” he said. “DonorsTrust and Donors Capital Fund ensure that recommended grantees are IRS-approved public charities and also require that the grantee charities do not rely on significant amounts of revenue from government sources. DonorsTrust and Donors Capital Fund do not otherwise drive the selection of grantees, nor conduct in-depth analyses of projects or grantees unless an account holder specifically requests that service.” [end update]
Matter of democracy
In the end, Brulle concluded public records identify only a fraction of the hundreds of millions of dollars supporting climate denial efforts. Some 75 percent of the income of those organizations, he said, comes via unidentifiable sources.
And for Brulle, that’s a matter of democracy. “Without a free flow of accurate information, democratic politics and government accountability become impossible,” he said. “Money amplifies certain voices above others and, in effect, gives them a megaphone in the public square.”
Powerful funders, he added, are supporting the campaign to deny scientific findings about global warming and raise doubts about the “roots and remedies” of a threat on which the science is clear.
“At the very least, American voters deserve to know who is behind these efforts.”
Originally published at the Daily Climate. The Daily Climate is an independent, foundation-funded news service that covers climate change. Find us on Twitter @TheDailyClimate or email editor Douglas Fischer at dfischer [at] DailyClimate.org.
– Douglas Fischer, the Daily Climate
By Nia Williams
CALGARY, Alberta (Reuters) – As Wall Street’s giants pull back from the energy business, Canadian banks are stepping forward, aided by booming domestic oil production and a reputation for prudence.
Bank of Montreal (BMO.TO: Quote), Canadian Imperial Bank of Commerce (CM.TO: Quote) and Bank of Nova Scotia (BNS.TO: Quote), long-time niche players in energy trading, hedging and dealmaking, are expanding their operations both north and south of the U.S. border, executives told Reuters.
In total, commodity trading revenues at the three banks rose by 30 percent last year, according to a Reuters review of their annual reports. Executives say it has been a struggle to match that performance this year, but that they are still gaining ground.
“We have been able to pick up market share not only in our home market but able to rapidly grow our business in the U.S. and overseas in places like the North Sea,” said Adam Waterous, a veteran oil banker who heads Scotiabank’s global investment banking team, which is based in Calgary, Canada’s oil capital.
With their reputation for caution, Canadian banks say they are unlikely to copy their U.S. counterparts and start amassing physical assets such as metal warehouses or oil storage terminals. Big Wall Street banks including JPMorgan Chase & Co. (JPM.N: Quote) and Morgan Stanley (MS.N: Quote) are looking to sell their physical trading desks as regulatory scrutiny increases and returns diminish.
“This is the fourth time in my career I have seen Americans come and go,” Waterous said.
Scotiabank is by far the biggest commodity trader in Canada, due in large part to its long-held ScotiaMocatta precious metals venture. Scotia reported a 26 percent rise in commodity trading revenues to C$425 million ($397 million) last year.
Of the other “Big Five” Canadian banks, Toronto-Dominion Bank (TD.TO:Quote) does not break out commodity trading revenue figures, but Royal Bank of Canada’s (RY.TO: Quote) trading revenues for foreign exchange and commodities climbed by 11 percent last year.
Canadian banks have a long history in the energy sector as a result of their involvement in the expansion of Alberta’s oil sands and the country’s status as the world’s sixth-largest producer of crude.
That opportunity is now expanding as more producers look to hedge output in Canada, which is expected to more than double to 6.7 million barrels per day by 2030. New products, such as CME Group’s Edmonton Sweet oil futures, which was launched this week, open new avenues for trading.
Thanks to a culture of conservative and cautious lending, Canadian banks emerged from the global financial crisis with reputations intact and some of the strongest credit ratings in the world.
“There’s a coming of age. In Canada there is the oil sands and in North America there’s the shale revolution that provides a great opportunity for our skill set and our history,” said Shane Fildes, head of global energy at Bank of Montreal, whose commodity trading-related revenues surged 65 percent to C$66 million in 2012.
Fildes said BMO’s energy trading desk expanded recently to five people from three, and its energy business as a whole employed 65 people in Calgary and 45 in Houston. The bank recently hired Paul Dunsmore from Barclays (BARC.L: Quote) to beef up its commodities derivatives team.
“The counterparty credit of being a Canadian bank is a very smart calling card in this environment,” he said.
At CIBC, commodity trading income rose 20 percent to C$52 last year and headcount has also increased across sales, trading, research and analytics, said Arden Majewski, who joined the bank two years ago to run its global commodities business after working for Swiss-based merchant Mercuria and for Merrill Lynch.
Scotiabank, whose commodity business is the largest and most established, has a history of stepping in when foreign banks pull back. Three years ago it bought much of UBS’s (UBSN.VX: Quote) Canadian commodities trading platform technology, when the Swiss bank exited Canadian energy trading. It bought U.S. energy investment boutique Howard Weale last year.
In September, RBC hired Kathy Kriskey from CIBC as head of commodity investor sales in New York to develop the bank’s commodity index products.
But in the scramble to pick up Wall Street business Canadian banks face competition from foreign banks such as Australia’s Macquarie MQG.AX and Brazil’s Grupo BTG Pactual SA (BBTG11.SA: Quote) as well as from private equity-backed merchants such as TrailStone and national giants such as Russia’s Rosneft (ROSN.MM: Quote).
While many Wall Street banks embraced physical energy trading, Canadian banks have so far shied away.
CIBC, Scotiabank, TD, and RBC do trade physical natural gas, a homogenous product that is easy to value. As well, BMO is in the middle of an approval process to trade physical natural gas, and the bank expects the process to be completed early in 2014.
None of the banks are involved in physical crude trading, however, which would entail greater investment in logistics and storage, Calgary market players said.
That makes them unlikely bidders for businesses such as JPMorgan’s physical commodities desk, which is in the second stage of a sale, or the asset-rich oil and power operations at Morgan Stanley, which has tried in vain for more than a year to find a buyer for that desk.
Instead, the Canadians concentrate on trading financials – crude derivatives contracts, usually based on the U.S. West Texas Intermediate benchmark – that enable clients to hedge their exposure to price swings in oil markets.
Client hedging activity tends to increase sharply in relation to oil market volatility. Bank traders in Calgary said they expect hedging demand to stay strong because of booming North American production and supply bottlenecks that exacerbate the discount on Canadian crude.
“With the U.S. investment banks that have pulled out of Canada, there would be more opportunity for these guys to fill that void,” said Brian Klock, equity analyst at KBW Inc.
(Editing by Jonathan Leff; and Peter Galloway)
The Keystone XL pipeline would ship Canadian oilsands oil across 1,800 kilometres to U.S. refineries on the Gulf Coast. (Eric Hylden/Associated Press)
A sudden surge in U.S. oil output could derail plans to build the massive Keystone XL pipeline to ship Canadian oil from Alberta to refineries on the American Gulf Coast, Canada’s U.S. ambassador was warned in internal emails.
In a series of emails unearthed by an access to information request from energy think tank Pembina Institute and provided to CBC News, Canadian energy counsellor Paul Connors warned ambassador Gary Doer in the summer that America’s current oil boom could alter the viability of cross-border pipeline plans.
Keystone XL is a proposed 1,900-kilometre pipeline being pitched by Calgary-based TransCanada that aims to bring Canadian oilsands oil from Hardisty, Alta., south through five U.S. states to oil refineries on the Gulf Coast in Texas.
The plan is an ambitious one, coming with a price tag of more than $7 billion, and has faced numerous regulatory hurdles over several years while various governments and companies try to negotiate the final details.
Broadly, Canada lacks the refining capacity to adequately process the billions of barrels of oil that are contained in the Athabasca oilsands. America, meanwhile, has more than enough refineries operating at less than full capacity, so the plan has been pitched as an economic bonanza for both sides.
‘Our customers remain extremely supportive of Keystone XL.’– TransCanada statement
But recent events may have changed those economics somewhat. A series of oil discoveries in the Bakken, Eagle Ford and Permianbasins scattered across the continental U.S. have increased America’s possible oil output to a far higher level than previously believed.
The U.S. now has so much recoverable oil that it’s now expected to surpass Saudi Arabia as the world’s largest oil producer at some point in the next 10 to 20 years.
Refineries are configured to process different types of crude — heavy crude goes to heavy refineries, light crude to light ones. Currently, heavy oilsands oil from Alberta goes to heavy oil refineries predominantly on the U.S. Gulf Coast.
“The significant increase in U.S. domestic production in recent years is light sweet crude which has lower [greenhouse gases] than heavy crude,” Connors wrote in an email to Doer in June.
The best way for America to profit from its current oil boom could be to export its new sources of light crude, because that’s what’s most in demand internationally and that’s what fetches the higher prices.
“However, if reducing U.S. [greenhouse gas] emissions is the goal, the U.S. could decline to export its light sweet crude surplus [and] domestic light sweet crude would begin to [replace] heavy oil imports.”
U.S. President Barack Obama has repeatedly said that his government would only approve the Keystone XL project if it would not materially alter America’s greenhouse gas emissions. So a suddenly plentiful energy alternative with a smaller environmental footprint could change the lay of the land.
For its part, TransCanada says it remains fully committed to the plan — as are its customers.
“TransCanada does not build pipeline projects and then hope we can fill them. Our Keystone XL customers have signed 20-year, binding commercial agreements because they needed to connect oil supplies in Canada and the U.S. to refineries,” the company said in an email to CBC News.
“Our customers remain extremely supportive of Keystone XL, and the markets understand that you need to have the right infrastructure in place to move product at the right time.”
Natural Resources Minister Joe Oliver agrees with that statement, telling CBC News that even with the conventional oil boom, “the U.S. Energy Information Administration projects that the U.S. will need to import 7.4 million barrels of oil per day in 2035.”
“Therefore, Keystone XL will displace an unstable source of heavy oil from Venezuela, with the same or higher greenhouse gas emissions, with a friendly, stable and reliable source of Canadian oil,” Oliver’s statement reads.
Indeed, if the project doesn’t go ahead, the U.S. State Department acknowledges that alternative modes of oil transport (such as rail) that emit as much as eight per cent more greenhouse gases will likely deliver the oil that Keystone XL would have.
Ottawa backs plan
“Our government supports the Keystone XL pipeline because it would enhance national security, create tens of thousands of jobs and generate billions of dollars in economic activity in both Canada and the U.S.,” the spokesperson said.
Still, any indication that the Americans have less of an appetite for Keystone could be bad economic news for Canada, which mainly produces heavy oil, almost all of which currently goes to the U.S.
If America chooses to use more of its own lighter oil domestically and needs less heavy Canadian oil, there is little Canadian oil producers could do in the short term to maintain a market for their product.
Canadian oil, known as Western Canada Select, already trades at a discount of about $30 compared to the American benchmark, West Texas Intermediate or WTI, mainly because it’s heavier and therefore more expensive to refine, which limits the number of refineries willing to take it.
“While this is economically sub-optimal for the heavy oil refineries, it would make the mix of U.S. crude oil lighter and less [greenhouse gas] intensive,” Connors wrote.
- David Koch Provided Seed Money for Americans for Prosperity (theatlanticwire.com)
- Look What the Koch Brothers Are Buying Now (fool.com)
- NFIB Received Huge Koch Brothers-Linked Contribution In 2011 (huffingtonpost.com)
- The Koch Brothers’ Secret Bank: How What You Buy Affects Our Politics (dailyfinance.com)