In a journey across Koch Industries, what enters as a barrel of West Texas Intermediate can exit as a Stainmaster carpet. From the fossil fuels it refines, Koch also produces billions of pounds of petrochemicals, which, in turn, become the feedstock for other Koch businesses. Until recently, Koch refined roughly five percent of the oil burned in America (that percentage is down after it shuttered its 85,000-barrel-per-day refinery in North Pole, Alaska, owing, in part, to the discovery that a toxic solvent had leaked from the facility, fouling the town’s groundwater). The company controls at least four oil refineries, six ethanol plants, a natural-gas-fired power plant and 4,000 miles of pipeline. Koch-owned businesses trade, transport, refine and process fossil fuels, moving them across the world and up the value chain until they become things we forgot began with hydrocarbons: fertilizers, Lycra, the innards of our smartphones. Instead, the company has woven itself into every nook of the vast industrial web that transforms raw fossil fuels into usable goods. That’s true as far as it goes – but Koch Industries is not a major oil producer. It is often said that the Koch brothers are in the oil business. The company is expanding its high-flying trading empire precisely as Wall Street banks – facing tough new restrictions, which Koch has largely escaped – are backing away from commodities speculation. It also extends to the company’s business practices, which have been the target of numerous federal investigations, resulting in several indictments and convictions, as well as a whole host of fines and penalties.Īnd in one of the great ironies of the Obama years, the president’s financial-regulatory reform seems to benefit Koch Industries. The toxic history of Koch Industries is not limited to physical pollution. In March, Koch signed a consent decree with the Department of Justice requiring it to spend more than $40 million to bring this plant into compliance with the Clean Air Act. The cost is borne by communities in cities like Port Arthur, Texas, where a Koch-owned facility produces as much as 2 billion pounds of petrochemicals every year.
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Across its businesses, Koch generates 24 million metric tons of greenhouse gases a year.įor Koch, this license to pollute amounts to a perverse, hidden subsidy. Koch’s climate pollution, meanwhile, outpaces oil giants including Valero, Chevron and Shell. The company ranks 13th in the nation for toxic air pollution. Thanks in part to its 2005 purchase of paper-mill giant Georgia-Pacific, Koch Industries dumps more pollutants into the nation’s waterways than General Electric and International Paper combined. According to the University of Massachusetts Amherst’s Political Economy Research Institute, only three companies rank among the top 30 polluters of America’s air, water and climate: ExxonMobil, American Electric Power and Koch Industries. The volume of Koch Industries’ toxic output is staggering.
history, resulting from the explosion of a defective pipeline that incinerated a pair of Texas teenagers. And in 1999, a jury handed down to Koch’s pipeline company what was then the largest wrongful-death judgment of its type in U.S. Under the nearly five-decade reign of CEO Charles Koch, the company has paid out record civil and criminal environmental penalties. The company’s troubled legal history – including a trail of congressional investigations, Department of Justice consent decrees, civil lawsuits and felony convictions – augmented by internal company documents, leaked State Department cables, Freedom of Information disclosures and company whistle-blowers, combine to cast an unwelcome spotlight on the toxic empire whose profits finance the modern GOP.
But Koch Industries is not entirely opaque.
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