In March, a Washington Post Web article and print article stated that Koch Industries was the largest leaseholder in Canada’s oil sands. That has since been questioned. However, further reporting has indicated that Koch Industries is the largest American and foreign holder of leases in Canada’s oil sands based on net acreage, but it might narrowly trail two Canadian companies overall.
Below is a list of individual companies’ net acreage lease holdings in oil sands based on data from the Alberta provincial energy department, corporations’ annual information forms, information from a mapping firm called GeoScout, data from a Calgary-based exploration services firm called Divestco Geomatics and interviews with industry analysts and executives:
●Cenovus Energy (Canada) 1.57 million* (includes rights to an air weapons range)
●Athabasca Oil Corp. (Canada) 1.56 million**
●Koch (U.S.) 1.12 million to 1.47 million***
●Canadian Natural Resources (Canada) 1 million*
●Suncor (Canada) 986,000****
(Sources:)
*company filings with
Canadian securities regulators;
e-mails from company spokesmen
**company Web site:
atha.com/operations/
thermal-oil/
***GeoScout, Alberta
energy department, Divestco
****Divestco
According to the Washington Post, an oil industry official with direct knowledge of Koch’s lease holdings has said that Koch’s leases in the oil-sands region are “closer to 2 million.” (The official spoke on the condition of anonymity to protect his relationship with the firm.)
This is possible because big companies frequently use brokers or private affiliates to quietly purchase rights without triggering a scramble for nearby acreage. If that is the case, Koch Industries ranks as the largest leaseholder in Alberta.
Koch itself did not reply to questions from the Post about its acreage holdings.
Even without counting possible acreage acquired through brokers or private affiliates, it is clear that Koch Industries through its wholly owned subsidiaries ranks as the largest leaseholder among U.S. or non-Canadian firms and no lower than the third-largest overall.
Figuring out net acreage positions and rankings in the oil-sands region is complex, and a measure of uncertainty is unavoidable.
“It’s so opaque,” said Andrew Leach, a professor at the University of Alberta in Edmonton. “There are so many different layers here.”
The province of Alberta keeps track of designated representatives on oil-sands leases, but the list doesn’t indicate whether those representatives have partners who share the cost of purchase and development. It is a list of gross, not net, lease holdings.
Net ownership could be higher (if a company holds a lot of minority positions in partnerships) or lower (if a designated representative brings in other partners to reduce development costs and spread risks).
Moreover, Canadian government and industry officials note that any company can establish a subsidiary identified only with a number, such as 12345Alberta, and the authoritative industry official says that Koch’s holdings far exceed the acreage listed by name with the Alberta provincial government.
Other oil companies might be doing the same thing, which adds more uncertainty.
The link between Koch and Keystone XL is, however, indirect at best. According to industry sources and provincial government publications, Koch’s oil production in northern Alberta is “negligible.”
Also, Koch has not reserved any space in the Keystone XL pipeline, a process that usually takes place before a pipeline is built.
The pipeline also does not run anywhere near Koch’s refining facilities, and TransCanada, owner of the Keystone routes, says Koch is not expected to be one of the pipeline’s customers.
Still, an activist group that is publicizing the figures about Koch holdings in the oil sands – the International Forum on Globalization (IFG) – is arguing that Koch will benefit indirectly.
The IFG contends that the Keystone XL pipeline will create competition among rail and other pipelines and lower transportation costs for all oil sands producers, bolstering profit margins and making additional reserves economically viable.
Sources:
http://www.washingtonpost.com/blogs/wonkblog/wp/2014/03/20/the-biggest-land-owner-in-canadas-oil-sands-isnt-exxon-mobil-or-conoco-phillips-its-the-koch-brothers/
http://www.washingtonpost.com/blogs/wonkblog/wp/2014/03/21/why-we-wrote-about-the-koch-industries-and-its-leases-in-canadas-oil-sands/
http://www.washingtonpost.com/news/volokh-conspiracy/wp/2014/03/22/are-the-koch-brothers-the-biggest-lease-holder-in-canadas-oil-sands/
http://www.washingtonpost.com/business/economy/does-koch-industries-hold-most-canadian-oil-sands-leases-its-complicated/2014/04/07/2470e5e4-be70-11e3-b574-f8748871856a_story.html
OK, Fine. 