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Koch Industries lobbying members of Congress against natural gas subsidy

June 22, 2011|By Tom Hamburger | Washington Bureau
(Los Angeles Times )

Reporting from Washington   — A top official of Koch Industries is sending letters to Capitol Hill on Wednesday urging opposition to energy legislation that would boost the use of natural gas, a proposal backed by energy billionaire T. Boone Pickens.

The amiable relationship that David and Charles Koch, who own Koch Industries, once had with Pickens has soured in recent months over legislation backed by Pickens that would provide a federal subsidy for the development of vehicles fueled by natural gas.

While Pickens and others in the natural gas industry favor the proposal as a way to reduce dependence on foreign oil and encourage use of cleaner burning gas, the Kochs are urging members to oppose the Pickens-backed legislation, saying they believe government subsidies distort the economy and create inefficiencies.

The letter this week is directed to members of Congress who opposed subsidies for ethanol,  which provided an economic benefit to Koch Industries but which the family and its top executives oppose as wasteful and distorting.

"We oppose ethanol subsidies and, indeed, all government mandates and subsidies because they artificially skew economic signals about price and demand, thereby creating inefficiencies that divert resources from productive activities to politically favored ones," wrote Phillip Ellender, who heads Koch's Washington and government affairs efforts.

"We do not believe government should be picking 'winners and losers' in the marketplace based on which industries or products it chooses to subsidize. Government has an abysmal record at doing so — both here and abroad.  History shows that the free market driven by consumer choice is a far better way to allocate resources accurately," Ellender wrote, echoing the outspoken free-market philosophy of the conservative brothers who control Koch Industries, one of the world's largest privately held corporations.

Related:

Koch brothers now at heart of GOP power

tom.hamburger@latimes.com

Hundreds march outside Koch brothers' retreat

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