[Marxism] The Koch brothers dump on Detroit

Louis Proyect lnp3 at panix.com
Sat May 18 07:21:28 MDT 2013

NY Times May 17, 2013
A Black Mound of Canadian Oil Waste Is Rising Over Detroit

WINDSOR, Ontario — Assumption Park gives residents of this city lovely 
views of the Ambassador Bridge and the Detroit skyline. Lately they’ve 
been treated to another sight: a three-story pile of petroleum coke 
covering an entire city block on the other side of the Detroit River.

Detroit’s ever-growing black mountain is the unloved, unwanted and long 
overlooked byproduct of Canada’s oil sands boom.

And no one knows quite what to do about it, except Koch Carbon, which 
owns it.

The company is controlled by Charles and David Koch, wealthy 
industrialists who back a number of conservative and libertarian causes 
including activist groups that challenge the science behind climate 
change. The company sells the high-sulfur, high-carbon waste, usually 
overseas, where it is burned as fuel.

The coke comes from a refinery alongside the river owned by Marathon 
Petroleum, which has been there since 1930. But it began refining 
exports from the Canadian oil sands — and producing the waste that is 
sold to Koch — only in November.

“What is really, really disturbing to me is how some companies treat the 
city of Detroit as a dumping ground,” said Rashida Tlaib, the Michigan 
state representative for that part of Detroit. “Nobody knew this was 
going to happen.” Almost 56 percent of Canada’s oil production is from 
the petroleum-soaked oil sands of northern Alberta, more than 2,000 
miles north.

An initial refining process known as coking, which releases the oil from 
the tarlike bitumen in the oil sands, also leaves the petroleum coke, of 
which Canada has 79.8 million tons stockpiled. Some is dumped in 
open-pit oil sands mines and tailing ponds in Alberta. Much is just 
piled up there.

Detroit’s pile will not be the only one. Canada’s efforts to sell more 
products derived from oil sands to the United States, which include 
transporting it through the proposed Keystone XL pipeline, have pulled 
more coking south to American refineries, creating more waste product here.

Marathon Petroleum’s plant in Detroit processes 28,000 barrels a day of 
the oil sands bitumen.

Residents on both sides of the Detroit River are concerned that the coke 
mountain is both an environmental threat and an eyesore.

“Here’s a little bit of Alberta,” said Brian Masse, one of Windsor’s 
Parliament members. “For those that thought they were immune from the 
oil sands and the consequences of them, we’re now seeing up front and 
center that we’re not.”

Mr. Masse wants the International Joint Commission, the bilateral agency 
that governs the Great Lakes, to investigate the pile. Michigan’s state 
environmental regulatory agency has submitted a formal request to 
Detroit Bulk Storage, the company holding the material for Koch Carbon, 
to change its storage methods. Michigan politicians and environmental 
groups have also joined cause with Windsor residents. Paul Baltzer, a 
spokesman for Koch’s parent company, Koch Companies Public Sector, did 
not respond to questions about its storage or the ultimate destination 
of the petroleum coke.

Coke, which is mainly carbon, is an essential ingredient in steelmaking 
as well as producing the electrical anodes used to make aluminum.

While there is high demand from both those industries, the small grains 
and high sulfur content of this petroleum coke make it largely unusable 
for those purposes, said Kerry Satterthwaite, a petroleum coke analyst 
at Roskill Information Services, a commodities analysis company based in 

“It is worse than a byproduct,” Ms. Satterthwaite said.“It’s a waste 
byproduct that is costly and inconvenient to store, but effectively 
costs nothing to produce.”

Murray Gray, the scientific director for the Center for Oil Sands 
Innovation at the University of Alberta, said that about two years ago, 
Alberta backed away from plans to use the petroleum coke as a fuel 
source, partly over concerns about greenhouse-gas emissions. Some of it 
is burned there, however, to power coking plants.

The Keystone XL pipeline will provide Gulf Coast refineries with a 
steady supply of diluted bitumen from the oil sands. The plants on the 
coast, like the coking refineries concentrated in California to deal 
with that state’s heavy crude oil, are positioned to ship the waste to 
China or Mexico, where it is burned as a fuel. California exports about 
128,000 barrels of petroleum coke a day, mainly to China.

Tony McCallum, a spokesman for the Canadian Association of Petroleum 
Producers, played down the impact of Keystone XL. “Most of the Canadian 
oil earmarked for the U.S. Gulf Coast is to replace declining heavy oil 
imports from Mexico and Venezuela that produces the same amount of 
petcoke, so it doesn’t create a new issue,” he wrote in an e-mail.

Much of the new coking investment has gone into refineries in the 
Midwest to allow them to take advantage of the oil sands. BP, the 
British energy company, is building what it describes as the 
second-largest coke refinery in Whiting, Ind. When completed, the unit 
will be able to process about 102,000 barrels of bitumen or other heavy 
oils a day.

And what about the leftover coke? The Environmental Protection Agency 
will no longer allow any new licenses permitting the burning of 
petroleum coke in the United States. But D. Mark Routt, a staff energy 
consultant at KBC Advanced Technologies in Houston, said that overseas 
companies saw it as a cheap alternative to low-grade coal. In China, it 
is used to generate electricity, adding to that country’s air-quality 
problems. There is also strong demand from India and Latin America for 
American petroleum coke, where it mainly fuels cement-making kilns.

“I’m not making a value statement, but it comes down to emission 
controls,” Mr. Routt said. “Other people don’t seem to have a problem, 
which is why it is going to Mexico, which is why it is going to China.”

“One man’s junk is another man’s treasure,” he said. One of the world’s 
largest dealers of petroleum coke is the Oxbow Corporation, which sells 
about 11 million tons of fuel-grade coke a year. It is owned by William 
I. Koch, a brother of David and Charles.

Lorne Stockman, who recently published a study on petroleum coke for the 
environmental group Oil Change International, says, “It’s really the 
dirtiest residue from the dirtiest oil on earth,” he said.

Rhonda Anderson, an organizing representative of the Sierra Club in 
Detroit, said that the mountain’s rise took her group by surprise, but 
it had one benefit.

“Those piles kind of hit us upside to the head,” she said. “But it also 
triggered a kind of relationship between Canada and the United States 
that’s allowed us to work together.”

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