02/09/15 – Greg Palast – The Scott Horton Show

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All right, you guys, welcome back to the show.
I'm Scott Horton.
On the line, I've got my old friend, Greg Pallast, gregpallast.com, author of many books and documentaries and all kinds of things.
Welcome back to the show.
How are you doing?
Glad to be with you, Scott.
Vultures Picnic.
Is that still the most recent there?
Well, there's Vultures Picnic, which is for those who like pulp nonfiction.
And then there is my book of cartoons and investigative reporting, which is Billionaires and Ballot Bandits.
Oh, yeah.
Got that one.
All right.
So here we are at vice.com.
This is from a couple of years ago, but it's new news still.
Hugo Chavez told me he won't sell oil to the Kochs by Greg Pallast.
The Kochs being, of course, the Koch brothers, the oligarchs.
They do finance many causes and writers and institutions that I support in a lot of ways, but themselves certainly in their business for really all along since the 70s.
They're conservative Republicans when it comes to the bottom line.
So no getting that confused.
I'm sorry.
Well, be careful, because I never think of the Kochs as Republicans.
David Koch was going to run for governor of Kansas as a Democrat is number one.
And he did run as the vice presidential candidate of the Libertarian Party against Ronald Reagan when he was more of a libertarian.
And of course, the Kochs, while they back a lot of Republican causes, you know, as you know, Bill Clinton and Al Gore are creations.
They were nothing except creatures of something called the Democratic Leadership Council, which was started by a hundred thousand dollar donation from the Brothers Koch.
So, you know, and they were they in fact, they started the DLC to push Clinton into the presidential nomination with the Democratic Party to the to the right for pro business.
I don't know if you call it to the right, but more pro business.
And they at the same time back Bob Dole for president.
So which shows you how they operate.
They don't believe in betting on a horse.
They believe in owning the racetrack.
Yeah, which makes sense, of course, from their point of view.
There's no reason for the rest of us to be ignorant about how they get it done, which which brings us to the Keystone Pipeline.
You know, I don't it's it's impossible for me to imagine anyone, regardless of even their interest in any sort of public policy thing at all, to conceive of a project like the Keystone Pipeline without immediately considering all the people in its way and whatever is going to become of them.
It just doesn't seem to come up in the in the coverage that much.
But you know, from my point of view, it's an especially important point because it is the Kochs that we're talking about, the guys who finance so many libertarian causes, of course, based on the sacred human right of private property ownership.
And they spend a pretty good deal sometimes about backing the ACLU against the Patriot Act and protecting people against eminent domain when it's somebody else's problem at the Institute for Justice and that kind of thing.
And yet in this case, I mean, do you have any kind of estimate at how many people stand to lose what they own at the hands of the state on behalf of Koch industries and getting this pipeline done?
And by the way, I ought to make you prove that the Kochs have anything to do with it anyway, too.
But go ahead.
Oh, good.
Well, that's I'd love to get to that.
But I mean, just think we're running a piece of metal.
With toxins flowing through it, that's going to go across the entire belly of the United States.
I don't know how many property owners will be will be, you know, kicked to the side.
I don't know.
But if your property is anywhere near that right away, and of course, don't forget, there's not just the single right away of the pipe.
You have to have all the control lines and and all the stuff that are going up and down and access roads, everything.
So there's a lot of property that is now going to become property of the pipeline care of the United States government.
I mean, you get in the way you get, you know, your property will be taken on a massive, massive scale.
And you know, that's that's one of the issues.
The other thing is that when you talk about, well, what is the connection of the Kochs to the pipeline?
And I'd like to, you know, vice when I used to write for Vice, and now I'm reporting for Al Jazeera, when their headline wasn't too accurate.
The real story, which you can get in Billionaires and Ballot Bandits, is that Chavez would not I've, you know, I just, for those who don't know, Greg Pallast, I knew Chavez quite well.
And I got together with him many times.
And you know, we discussed, obviously, the the the only topic worth discussing in Venezuela, which is oil.
And Chavez understood very well that the Koch brothers were stuck buying his oil.
Because what the Koch brothers did, they understand these are the richest oil men who've never discovered a barrel of oil in their life.
Think about it.
They're the richest oil men on the earth, but they haven't discovered a single barrel of oil.
So what do they do?
It's all political plays.
So for example, they purchased the Sun Oil refineries at Corpus Christi, Texas.
Those things were bleeding money.
They're money losers.
Now, why would the Kochs buy money losing refineries?
The answer is they had a political scheme, and that involves the XL pipeline.
Why was Sun Oil losing money on there and became Koch Oil losing money at the refineries there?
Hugo Chavez, the only type of oil that those refineries can handle is super heavy oil.
Now, here's the weird thing.
No one seems to be asking, why are we running a pipe of oil to Texas?
That's the definition of coals to Newcastle.
You know, there is a little bit of oil in Texas, I've heard.
In fact, right now, they don't know what to do with it.
It's coming out of their it's coming out of their ears here.
Yeah, you just drive down the road and look out the window and yeah, and they're drowning in it.
They're going broke in it.
There's so much oil.
And the Koch refineries are literally in the middle of an oil field, but they cannot use any of that oil because that's Texas Intermediate Light.
It's a light oil.
It's not very polluting.
It's you know, it can't use it in their refinery.
That refinery was designed solely and only to take Venezuelan oil.
It was created during this the oil embargoes of the 70s when we were trying to get oil in.
So the idea was to use all the old pipes that used to send oil out now would be oil that would take take the Venezuelan oil in and send it to the rest of the country.
The thing is, is that because Venezuela is the sole source of the oil for those refineries, they had to pay, Chavez figured out that they had to pay a premium.
It used to be that Venezuela would give a discount because who wants super heavy, highly polluting crappy oil that requires all kinds of extra steps to refine, requires this very specialized type of expensive refinery.
But Chavez said, hey, once they've built the, since they've already built the refineries and they own them, they don't have a choice.
They take our oil or they take nothing.
So Chavez not only took away the heavy oil discount, he added a premium they were buying until recently.
The Kochs are having to buy Venezuela's oil at $103 a barrel, which is way above the, they're paying like about a $10 a barrel premium above the West Texas price for crappy oil.
And so the Kochs are bleeding money when they bought this thing.
So why would they buy something that bleeds money?
The answer is they had a scheme.
One, scheme one is get rid of Chavez.
And by the way, I knew Chavez.
He wasn't bumped off.
He went on his own.
It was kind of suicide by coffee at 30 cups of coffee a day.
He didn't drink alcohol and that gave him stomach cancer.
So they get rid of Chavez.
The assassination attempts never worked.
The coup attempts never worked.
That didn't work.
So then what you do is say, okay, we can't use, Venezuela won't give us a break on the oil.
We'll get it from the Canucks.
We'll get it out of Canada.
And like, so they, so here you have a scheme to take oil from Canada all the way across the entire United States to the oil capital of America in Texas.
That's funny.
All right.
Now hold it right there.
Hold it, Greg.
We've got to take this break.
Sure.
But when we get back, I want to ask you about the until recently part.
I think you're saying they've quit buying Venezuelan oil altogether at this point, but hold that thought.
We'll be right back with Greg Pallast.
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All right, y'all.
Welcome back to the show.
I'm Scott Horton.
I'm talking with Greg Pallast, investigative reporter.
And this whole article at Vice is called Hugo Chavez told me he won't sell oil to the Kochs.
It's not quite right, the title, he said, but that's how you find the title and the article, I mean.
And he's writing for Al Jazeera now.
And we're talking about the Kochs and the XL pipeline.
And we got the means and the motive, political access by way of dollars.
And then that's the means, obviously.
And then the motive is that the Venezuelans are charging the Kochs an extraordinary amount of money over the global market price for their heavy crude.
And the Kochs own a refinery down in, they bought themselves a refinery down in Corpus Christi that's made for the heavy crude.
And they don't want to have to retool it, but they don't want to have to pay the premium to Venezuela.
So they want to get the heavy crude from Canada instead, which is why they need to build a giant pipeline all the way across the United States of America to deliver oil from Canada to Texas, as you were saying, Greg.
So I think everybody's caught up, mostly, unless I screwed something up.
But then my question is, I just want to clarify a point.
You said until recently they were buying this Venezuelan oil.
And so I wondered if that means they're that much more desperate.
The factory's just sitting there now?
Or they found another source of heavy crude?
No, no, no.
They're still taking Venezuelan oil because they don't have the XL pipeline to bring in the cheap Canadian crude.
Just so you know, what I'm saying is that they were paying a premium of about $35 because they were paying about $5 to $10 above Texas oil prices to get in the junk from Venezuela, this heavy crude from Venezuela.
But they could have gotten a $30 barrel discount for Canadian tar sands oil because the tar sands oil sells at a steep, steep discount.
You can no longer get $35 off a gallon, mainly off a barrel, because the barrel's only $50.
But you are talking about probably buying this crude at nearly a 50% discount to the Venezuelan stuff.
And I calculated out exactly that each of the two Koch brothers, because remember, they own that refinery outright.
It's not a corporation.
The Koch Industries is their private fiefdom.
The two brothers own it.
So they would each, they would be about $2 billion a year in savings on the crude that they would have to buy for that refinery.
So that each brother makes about a billion bucks a year.
And you figure that that pipeline will roll for 20 to 30 years.
So you're talking $40 to $60 billion in savings on average.
You know, the probable savings.
$40 to $60 billion for those two guys if they get the XL pipeline.
That's a lot of loot and worth buying up a Congress or two and a White House.
And, you know, keep in mind is that, you know, again, they, you know, while we associate them with the Republican Party or often libertarian issues, you know, it's as they see their need.
You know, they've been, like I say, they back Democrats.
They created Bill Clinton for us.
It's what, you know, they understand that this is, that basically politics is a profit center.
That's how you make your money.
All right.
Now, so what about the opportunity exactly?
Can you connect some dots and show where they really have been the driving force behind this political push for the pipeline?
Well, yes.
I mean, you know, when we had the Tea Party uprising, which I think really was a populist movement and kind of later transformed into the Patriot movement, it was basically there was a kind of corporate coup d'etat in which the group, which is the Council for a Sound Economy, which is the Koch Front, ended up transforming itself into Freedom Works, which became kind of the voice for the Tea Party when the media needed someone to say, well, what are these people in the funny hats, what are they asking for?
And the Kochs are ready to give the answer.
They didn't go out and ask the people in the funny hats what they were standing for.
Rather, they went to the Kochs organization to say, what do these people want?
And one of the main things that they had on their agenda was the XL Keystone Pipeline.
Now, I don't remember people calling, you know, real patriots running out there saying we're protesting.
We're not protesting against the Patriot Act.
We're not protesting against government intrusion.
We're not protesting against government surveillance and harassment of the average person.
We're out there because we want a pipeline.
I don't remember that, you know, but that's what basically the Kochs commandeered the voice of the Tea Party movement because they had the money and the connections to media, et cetera.
So we never heard from the real Tea Party people.
We just heard from, you know, the self-proclaimed well-paid spokesman who said, oh, what we really want is this pipeline and tax cuts for the rich.
I mean, where did that come in, you know?
So they're very good at commandeering these movements.
They did it before, by the way.
There was a movement back in the 90s in the Midwest and plain states called the Wise Use Movement, which is very much against the excessive use of eminent domain by government, et cetera.
And the Wise Use Movement was a true populist movement.
I didn't agree with all of it, but it doesn't matter.
It was very much people were concerned about government intrusion on their rights.
And once again, the Kochs moved in, seized it, and used it as a vehicle for a profit-making agenda to change American laws.
From that, they used that group, the Wise Use Movement, a populist movement, a libertarian-based movement of the 90s.
They grabbed a hold of it, and out of that they created what was called the Contract for America, which they gave to a guy named Newt Gingrich, who became Speaker of the House and moved their agenda.
And since the movement was about cutting government intrusion, they used it to basically decriminalize a lot of their activities involving coke oil and massive pollution.
Their trucks were literally dumping a crude sludge into rivers, 350 criminal counts of criminal pollution.
What they wanted to do was end all the laws which prevented the criminal poisoning of property.
And that's one of the things that they were relatively successful at.
They didn't eliminate the EPA, but that was one of the big pushes.
But again, so the Kochs used libertarian rhetoric, they used the libertarian movement, they used the Republican Party, they used the Democratic Party.
Whatever makes them a buck.
That's the big thing.
Absolutely.
All right, now a short amount of time left here, but I want to ask you about the current Saudi policy of whatever market forces are driving the price of oil down around the world, they're not doing their countermeasure that they usually do, which is cut production.
And Kerry has even said, Secretary of State Kerry has even said, you know, yeah, ha ha, wink, wink, we're really sticking it to the Russians and the Iranians, which of course a lot of people were accusing him of.
Patrick L. Smith had a great piece about that.
But it seems to me it's kind of strange because they're also screwing the Texans and screwing the Canadians too.
And how bad can the Saudis screw the Texans, Greg, before they use their influence over D.C. to use their influence over Riyadh to start cranking production back down again, or America's just Saudi's bitch, or exactly how does that work?
Well, I think one of, let's remember that the Texans that they care about, the influential ones, are on the Saudi payroll.
James Baker is the most influential Texan alive, who was our Secretary of State.
He's also counseled for the Kingdom of Saudi Arabia and for the House of Saud.
And of course, he's a personal counsel to the Bush family.
Another, you know, again, in the Bush family, money comes, you know, through connections, business connections with Saudi Arabia.
Bush had, you know, his adventures in the oil trade in the Gulf, which, you know, lost a ton of money for his partners, but not for him.
So that, you know, when you talk about Texans, it's not the, it's not guys at the rodeo, man.
We're talking about the elite.
And the elite of Texas has been done very well on the Saudi payroll.
And they don't mind a few of the upstarts.
Remember that there's all kinds of Texas oil.
There is, there's, you know, Richmond and the home of Exxon Mobil.
And then there's the, you know, there's the Wildcatters and the guys that are doing fracking in oil.
People think of gas fracking, but fracking in oil to get a few extra barrels out of those stripper wells.
Those are the guys they want to wipe out.
And I don't think that big oil has a problem with that at all.
Now, I wrote a book 10 years ago called Armed Madhouse, or nine years ago.
And I said, look, in 2004, in October 2004, the Saudis dropped the price of oil from $110 a barrel to $20 a barrel in one month.
Okay.
They did that to wipe out their competitors, like say in Canada, Texas, and punish Hugo Chavez, punish the Iranians who are Shia dogs as far as they're concerned.
And I said, they do it every 10 years.
Now, that was October of 2004.
So I was off by a month because it wasn't October 2014.
It was November 2014 at the Saudis.
So I was off by one month.
They do it every 10 years.
You set your watch right now.
Mark it on your calendar 10 years from now.
You know?
That's probably a safe bet.
2024.
Yep.
Yeah.
Sounds like a good one.
All right.
Thanks very much, Greg.
Thanks for coming back on the show.
Good to talk to you again.
You're the best.
Bye.
Thanks.
All right, y'all.
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