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A Project of The Annenberg Public Policy Center

‘Big Oil’ Backing Romney?

A pro-Obama TV ad says that “big oil” pledged $200 million to help Mitt Romney, making him the industry’s “$200 million man.” But that’s a pretty slippery claim. The fact is that there is no evidence that truly big oil companies like BP, Exxon Mobil Corp. and Chevron Corp. are behind the money in question. Rather, it’s a funding goal of the Koch brothers, the libertarian billionaires whose diversified corporation has fingers in lumber, commodity trading, ranching, fertilizers, pollution control and coal, besides interests in pipelines and oil refining.

The ad’s claim is based on a news story that said the Koch brothers plan to direct $200 million or more to conservative groups this fall. But the oil interests of Koch Industries are tiny in comparison to those of the better known multinationals that dominate the industry, which also include Royal Dutch Shell, ConocoPhillips and the French-based Total.

This latest ad attempting to link Romney to the oil and gas industry is a joint collaboration between the League of Conservation Voters Victory Fund and Priorities USA Action, the super PAC supporting President Barack Obama. The groups are spending $1 million to air the ad in Colorado and Nevada.

The ad claims that “big oil’s pledged 200 million to help Mitt Romney,” and that, in return, Romney has “pledged to protect their profits and billions in special tax breaks.”

It’s true that Romney has said that he does not favor raising taxes on oil companies. At a town hall meeting in Wilmington, Del., on April 10, Romney said that “I don’t want to raise taxes on oil companies.” And Romney has also referred to the president’s proposals to eliminate oil and gas tax loopholes as “government by gimmick,” saying that those policies would not lower gasoline prices or increase domestic oil production.

But has “big oil” actually “pledged” to support Romney with $200 million?

What is true is that David and Charles Koch, the billionaire brothers behind Koch Industries, are planning to “steer more than $200 million — potentially much more — to conservative groups ahead of Election Day,” according to a Politico report from last November. But while Koch Industries does have considerable oil interests, it is hardly in the league of the truly “big oil” companies.

On its website, Koch says that some of its companies “engage in petroleum refining, chemicals and base oil production, crude oil supply, and wholesale marketing of fuels, base oils, petrochemicals, asphalt and other products.” Koch’s Flint Hills Resources LLC, for example, operates refineries in Alaska, Minnesota and Texas, which combined have a processing capacity of 800,000 barrels of crude oil daily, according to the company. And the Koch Pipeline Company LP owns or operates more than 4,000 miles of pipelines that transport crude oil and other refined petroleum products. Koch also has a 3 percent interest in the Trans Alaska Pipeline System through the Koch Pipeline Company LLC.

But Koch Industries, which is one of the country’s largest private companies, has a business reach that goes way beyond just refining oil and operating pipelines. Its portfolio includes businesses in several industries, including polymers and fibers, ranching, minerals, process and pollution control equipment, and fertilizers, as well as refining and chemicals and commodity trading and services. Based on revenues, Koch Industries doesn’t really compare to other “big oil” companies.

Forbes, which ranks the country’s largest public and private companies annually, estimates that Koch Industries took in about $100 billion in revenues in 2011. That is a large amount, no doubt. But it is still substantially lower than the amounts hauled in by some exclusively and truly “big oil” companies.

The American oil giants Exxon Mobil, Chevron and ConocoPhillips had sales of $434 billion, $236 billion and $231 billion, respectively. And that’s not even considering international oil titans like the Netherlands’ Royal Dutch Shell, which had sales of $470 billion in 2011, the United Kingdom’s BP, which had sales of nearly $376 billion, or France’s Total, which had sales of more than $216 billion last year. So even if all of Koch Industries’ revenues came from its refining business — which they do not — they would still be a fraction of the revenues of the companies that actually represent “big oil.”

The ad is an attempt to link Romney to the unpopular oil and gas industry, which has consistently ranked at the bottom of Gallup’s annual survey of public opinion on major U.S. business industries. (2002 and 2011 were the only years in which that industry was not the country’s least favored.)

And it’s not the first time that the super PAC has misleadingly compared the diversified Koch empire with “big oil.” Priorities USA Action released the ad “Romney’s Big Oil Trail,” back on March 30, also claiming that “big oil executives” had pledged $200 million to help Romney.

But repeating the claim doesn’t make it so. While the oil and gas industry has historically contributed more to Republicans than Democrats, it’s too slick of the ad’s sponsors to claim that “big oil” has “pledged” to give $200 million to Romney.

— D’Angelo Gore