Insolvency doesn’t deter Detroit politicians’ War on Business

Posted by hpayne on June 18, 2013

Activists protest in front of mounds of of petroleum coke on the Detroit waterfront. Pet coke is a byproduct of the nearby Marathon oil refinery.

Amidst Detroit’s financial emergency, two multinational companies are expanding in Southwest Detroit, bringing good-paying jobs and desperately-needed city revenue. Marathon Oil’s $2.2 billion expansion of its refinery to process Canadian oil has added 80 jobs and an estimated $230 million to city coffers by 2030. Nearby, Koch Carbon is taking the coal-like byproduct of Marathon’s refining process and selling it right back to Canadian power pants — expanding America’s energy exports and bringing life to Detroit’s abandoned, industrial waterfront.

Yet the two companies have received nothing but venom from Detroit politicians and their activist allies.

This week, Emergency Manager Kevyn Orr announced a restructuring plan to get Motown’s fiscal house in order. But Detroit can’t just cut its way to prosperity. It also must grow. “The city cannot stabilize or pay creditors meaningful recoveries if it continues to shrink,” writes Orr in his restructuring plan.

Yet the experience of Marathon and Koch shows how treacherous Detroit’s business climate remains — even towards established manufacturing and commodities industries. Indeed, this hostility echoes a national problem as Democrats’ War on Carbon threatens growth in America’s struggling economic recovery.

Detroit is at the nexus of a North American oil revolution as Canada has tapped vast reserves from Alberta’s oil sands, reducing U.S. dependence on volatile regions like the Mideast and Venezuela. Much of that oil is processed at Marathon’s huge refinery off I-75. And in 2007 the Ohio-based company decided to expand to meet the demand — at great benefit to Detroit.

The expansion, completed last year, brought 5,000 contractor jobs and increased permanent refinery and subcontractor employment by 155 jobs —many of them well-paid, unionized, $30-an-hour maintenance positions, says Marathon Oil spokeswoman Angelia Graves.

An oil sands byproduct, petroleum coke, has brought more business to the city’s waterfront. An industrial center in the Motor City’s heyday, the Detroit River today is pocked with empty buildings and weed-choked loading platforms. In a neat twist, the coal-like, so-called “pet coke” is being sold back to Canada (among other countries) by energy giant Koch Carbon — where it is burned for electricity in a Nova Scotia power plant, adding millions to America’s trade balance sheet. That export operation has brought another 20 jobs — all paying over $45k a year — to Detroit Bulk Storage which loads the coke on Koch barges.

If you think this has brought smiles to Michigan politicians, think again.

Detroit Congressmen Gary Peters and John Conyers and state Rep. Rashida Tlaib have denounced Marathon and Koch for the mounds of pet coke storage. Congress needs to act against the material to protect “families and natural resources like the Great Lakes from the threat of contamination,” raged Peters from the House floor.

This is pure demagoguery. Pet coke has long been used in electricity and steel production. It is a non-toxic material that poses no threat under American clean air and water laws, says Brad Wurfel, a spokesman for Michigan’s Department of Environmental Quality (DEQ). Indeed, the DEQ says the companies have met every state and federal regulation.

But that’s not good enough for Peters and environmentalists who are waging war on oil, coal, and working-class jobs in pursuit of their green Utopia. This war has cost the livelihoods of thousands of coal miners across Appalachia — as well as up to 20,000 more jobs promised by the oil sands-pumping Keystone Pipeline.

Never mind if Detroit companies have played by the rules, Peters wants to draft even more regulations for them to meet. And he is determined to take this harassment nationwide. “One of my main concerns with the Keystone pipeline is that we will be seeing piles of pet coke in a lot of other places in the U.S.,” Peters told London’s Guardian newspaper.

From Detroit to South Dakota to New Orleans, energy production means exports, growth and jobs. But green politicians seem more alarmed about its alleged impact on polar bears than its promise for America’s working class.

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