Alberta Petcoke Gets Around

Joyce Nelson

Piles of dusty petroleum waste called "petcoke"It looks like Armageddon but it’s “just a little bit of Alberta.”

That’s what some are saying about the black clouds of “petcoke” that have been blowing off huge piles of the stuff in Detroit and Chicago, forcing residents to hide in their homes until the wind dies down, then try to hose off the black grit until the next time Alberta blows through their neighbourhoods.

Petcoke, or petroleum coke, is the powdery by-product of heavy oil refining, which uses a coker to release the oil from the diluted bitumen (dilbit). Petcoke has been accumulating in the Midwest, as refineries have expanded to handle huge volumes of tarsands crude.

According to the Associated Press (November 25, 2013), “In Detroit, petcoke began appearing along the Detroit River in the spring, several months after the Marathon Oil refinery completed a $2.2 billion US expansion” in November 2012. That upgrade allows the refinery to process 28,000 barrels per day of dilbit, producing a whopping 1,720 tons per day of petcoke waste.

BP’s refinery in Whiting, Indiana, has been undergoing a huge expansion in order to take more tarsands crude. When the new unit opens in 2014, the BP refinery will be able to process 103,000 barrels per day of dilbit, raising its petcoke production to a gargantuan 6,000 tons per day – which it currently transports over to Chicago, Illinois, to avoid regulations.

A New Industry
While some petcoke is useful for steelmaking, the petcoke produced by refining tar sands crude is primarily a waste by-product. The New York Times (May 17, 2013) reported, “… the small grains and high sulfur content of this [tar sands-derived] petroleum coke make it largely unusable,” except as cheap and dirty fuel. Lorne Stockman of Oil Change International calls tar sands-derived petcoke “the dirtiest residue from the dirtiest oil on earth.”

The burning of petcoke emits huge volumes of soot and greenhouse gases, so its use is limited in the US. However, China, Mexico, India, Canada, and others use it as a feedstock because it is 25% cheaper than coal. Despite its smog-creating properties, in the past decade petcoke has become a $6 billion industry through annual sales of some 100 million metric tonnes of petcoke produced mostly in North America and sold to China, India, Japan, and Latin America  as fuel for cement kilns and power plants. By 2008, the price of petcoke had increased five-fold from the previous decade.

Refineries sell the petcoke primarily to Koch Carbon, a company owned and controlled by billionaires Charles and David Koch; KCBX, a subsidiary of Koch Carbon (which is a subsidiary of Koch Industries); and Oxbow Corporation, owned by William I. Koch (brother of David and Charles). As a result, many have ironically changed the spelling to “petKoch.” Koch Industries then sells it on to the world market.

Charles and David Koch have a combined net worth of $92 billion. Rolling Stone (April 20, 2012) calls them “the plutocrats from central casting – oil-and-gas billionaires ready to buy any congressman, fund any lie, fight any law, bust any union, despoil any landscape, or avoid any (tax) burden to push their free-market religion and pump up their profits.”

In December 2012, the Koch’s KCBX subsidiary bought up the Chicago Fuels Terminal (now called KCBX Terminals) on the Calumet River, where more than a mile of Chicago shoreline is now dedicated to uncovered “petKoch” piles. In November 2013, Illinois Attorney General Lisa Madigan announced a lawsuit against KCBX Terminals; the US Environmental Protection Agency ordered KCBX to install air-pollution monitors; and Chicago Mayor Rahm Emanuel ordered the Department of Public Health to adopt “strict regulations on the maintenance and storage” of petcoke.

Meanwhile, Nova Scotia Power has purchased that Detroit pile of petcoke from Koch Carbon and will burn it in two power plants in the province. According to the New York Times (June 6, 2013), a bulk carrier owned by Canada Steamship Lines of Montreal has been bringing the petcoke to a coal terminal in Sydney, Nova Scotia, in a move “something resembling a bottle return program,” with the tar sands-derived petcoke “making its way back to Canada.”
But the Detroit pile will, of course, be replaced. The Marathon refinery’s 1,700 tons of petcoke production per day has a way of piling up.

The Keystone Connection
According to UK-based Roskill Information Services Ltd., 12 refineries in the US Gulf Coast area produced petcoke in 2012 from heavy oil imported from Venezuela. But the decline of Venezuelan oil imports is having an effect on petcoke production/sales by Gulf Coast refiners.  As reported by Canadian Oilsands Navigator (September 11, 2013), “Roskill concludes that a go-ahead for the proposed Keystone XL Pipeline [KXL], which would carry about 850,000 barrels per day of heavy Canadian crude to the US Gulf Coast, is critical if refineries are going to continue to supply the [$6 billion] petcoke market.”

Of course, that petcoke market is only a fraction of  the profits that KXL could deliver to Koch Industries.

An October 2013 report by the San Francisco-based International Forum on Globalization (IFG), called Billionaires’ Carbon Bomb: The Koch Brothers and the Keystone XL Pipeline, claims that the KXL will provide the Kochs with another “$100 billion in potential profits” while “intensifying ecological crisis.”

Koch Industries (already with more than $110 billion in annual revenues) is a major refiner of tar sands crude at its Pine Bend refinery in Minnesota and its Corpus Christi refinery in Texas. Koch subsidiary Flint Hills Resources Canada operates a crude oil terminal in Hardisty, Alberta.

The report states: “The point on the [KXL] pipeline’s value chain at which we were able to identify a significant profit source for the Kochs is their production of crude oil from the two million acres they have in Alberta’s tar sands territory.”

Koch Exploration Canada (KEC) “buys and sells land for energy development, and is well positioned to become a major producer in coming years. Their current land holdings [in Alberta’s Athabasca region] appear to be significantly larger than those of Chevron, Exxon and ConocoPhillips combined.” KEC is one of Canada’s largest crude oil purchasers, shippers and exporters, with more than 130 crude oil customers.

The “Kochtopus”
The Koch brothers have also created the so-called “Kochtopus” – a vast network of right-wing think tanks, astroturf agents, media manipulators, congressional and courtroom collaborators, and “dark money” donors. The Kochtopus has been the primary funder of the Tea Party movement; the climate-change denial onslaught; and the original backer of the case behind Citizens United – the 2010 US Supreme Court decision that opened US campaign financing to unlimited and undisclosed corporate spending.

The IFG report states that KXL’s increased profits to the Koch brothers would mean “more support for the ideological extremists” and “more carbon pollution.”

In April 2012, the Vancouver Observer revealed that since 2008, the Koch brothers have donated “over half a million dollars to the … right-wing Fraser Institute,” PM Harper’s favourite charity. Harper’s dismantling of environmental regulations, his war on science, and his attacks on unions are lifted directly out of the Koch brothers’ ideological playbook.

Those “petKoch” windstorms –obscuring and fouling everything in their path – are an apt symbol of the Kochtopus. Yes, they’re “a little bit of Alberta,” but they’re Koch-created and Koch-owned and now they’re blowing across Canada too, befouling the body politic.

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Joyce Nelson is an award-winning freelance writer/researcher and the author of five books.

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